Martin Lewis advice to anyone with £5,000 or less in Premium Bonds

Personal finance expert Martin Lewis has told anyone with Premium Bonds about the ‘£5,000 rule’ and warned about the chances of actually winning anything. The ITV and BBC star has said that unless people have at least £5,000 in there, the statistics suggest they might be wasting their time.

Premium Bonds are a government-backed UK savings product issued by NS&I (National Savings and Investments). Instead of earning regular interest, a person’s money buys unique £1 bond numbers that are entered into a monthly prize draw to win tax-free cash prizes ranging from £25 to £1 million.

Mr Lewis has spoken out about the bonds, and last week, in a new update , NS&I said that there will be an increase to the Premium Bonds prize fund rate and improved odds from the September 2026 draw. There will be an estimated £63 million of extra tax-free prizes in September, compared to August 2026, NS&I said. There is also an immediate interest rate increase for around 428,000 Direct Saver and 222,000 Income Bonds customers.

More than 22 million Premium Bonds holders will see a boost to the prize fund rate to 4.35%, up from 3.80%, for the September 2026 draw. At the same time, holders will have even more chances to win, with the odds shortening to 21,000 to 1 from 22,000 to 1. The Premium Bonds prize fund rate and odds were last improved in July 2026.

However, Mr Lewis has said that people would have a much better return with normal savings - if they don’t put enough money in - because of the odds. He explained that premium bonds are only worth getting if you have a certain amount of money. In particular, he advised that many grandparents would be better off giving grandchildren cash via normal savings accounts.

He said: “For years, many people, especially grandparents, have gifted their children premium bonds. And frankly, in my view, for many they would’ve done better sticking with normal savings. Premium bonds are government-backed savings, where the interest is based on a prize draw. The current prize fund rate is just 3.6 per cent, yet even that overestimates what most people will actually win with typical luck.”

Martin said that premium bonds are typically only worth buying if you have more than £5,000, to give you a chance of winning the prizes. He noted that premium bonds are “best for”: Those with larger savings, say over £5,000, as then you’ve a better chance of earning closer to the published prize fund rate. “With less, the odds are you will win little or nothing”, he said

Those who pay tax on their savings interest, who have used up their ISA allowances, as premium bond winnings are always tax-free

He added: “As most children have small amounts of savings and aren’t taxpayers, premium bonds are particularly unsuitable.