Premium Bonds are a popular savings product backed by the UK government. Instead of earning interest, bondholders are entered into a monthly prize draw where they could win between £25 and £1 million tax-free.
However, NS&I has a strict limit: each person can only hold up to £50,000 in Premium Bonds.
Some people, who choose to reinvest their prize wins, have unknowingly gone over the limit. NS&I recently said when that happens, the extra money is automatically paid back to the saver’s bank account or sent as a cheque, depending on their settings.
So What? Insights
This is a gentle but serious reminder for over 24 million Premium Bond holders to check their balance, especially if they’ve chosen to reinvest prizes.
While NS&I allows reinvestment, it won’t hold more than £50,000 for any one person. Going over means lost reinvestment opportunities and possibly missed future prize entries.
Also, in April 2025’s prize draw, the prize pool shrank by nearly £19 million. Although there are still millions of £25 prizes, the number of bigger prizes is going down.
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Key Implications
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Check your Premium Bond balance, you might have gone over the £50,000 limit without realising.
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The chance of winning remains 1 in 22,000, but larger wins are becoming rarer.
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While Premium Bonds are tax-free and exciting, the average returns are lower than top savings accounts.
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NS&I is trying to balance savers’ interests with economic stability, expect more reviews and changes.
Practical Takeaways
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Log into your NS&I account and check your Premium Bond balance.
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If you reinvest prizes, make sure your total stays below £50,000.
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If you get a refund or surprise payment from NS&I, check if it’s due to over-holding.
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Compare your returns, you might get better, guaranteed interest elsewhere with a savings account.
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Final Thoughts
Premium Bonds are fun and backed by the government, but they’re not for everyone. If you love the thrill of a prize draw, great. But if you want steady returns, an easy-access savings account might be smarter.
Either way, knowing the £50,000 limit and how NS&I handles overpayments can help you make better financial choices.
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