Premium Bonds: Britons told to ‘end love affair’ with the NS&I savings option

Martin Lewis gives updated advice on premium bonds

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Millions of British savers have their money tied up in Government-backed NS&I savings bonds which were first launched 65 years ago. In total, £114billion is invested in the savings scheme but experts say Britons’ money could be better invested elsewhere.

Britons should end their “love affair” with NS&I Premium Bonds according to financial planner and founder of Equilibrium Financial Planning, Colin Lawson.

He believes the appeal of the savings product is down to the short-lived dopamine hit each small win provides, and little to do with it being a good investment.

Mr Lawson points out that if savers who bought the maximum £50,000 in Premium Bonds 25 years ago had instead invested in a basket of global equities, they would now have a pot worth £418,938. With investing, it’s very important to remember that capital is at risk.

However, that’s a staggering increase of 738 percent, while at the same time Premium Bonds have struggled to keep up with inflation.

Premium Bonds could be a good option in the short-term, he pointed out, but the financial planner said this is rarely what they are used for.

Mr Lawson said: “Ask any financial planner if Premium Bonds are a good investment, and you would get a resounding ‘no’.

“Despite being closer to cash than an investment, there are many people holding large amounts of money in them, often for decades at a time.

“I believe if you’re holding some money in them for the short-term, perhaps to pay a looming tax bill for example, then they certainly have their place. Unfortunately, that is not how most people utilise them.”

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However, despite the poor returns, the expert said that his advice, and that of other financial planners’, often goes ignored.

“From my experience it can be incredibly tough to get people to part with their Premium Bonds, even in the face of overwhelming expert advice,” he explained.

“I have long standing clients who are still holding onto Premium Bonds that they had when I started my business in 1995.

“Crucially, nobody has ever been able to tell me what their return has been in that 25 year time period, but they are always all too keen to tell me about the last time they won £50.”

It’s not just Mr Lawson who claims that savers’ money could get better returns elsewhere.

Data Scientist Andrew Zelin has conducted research to show that with £1,000 in Premium Bonds, you would have to wait 200 years before having a 50/50 chance of winning £50.

And with inflation set to spike, the difference could soon become even more stark.

Mr Lawson added: “While I know that each Premium Bonds prize win gives a dopamine hit, it’s surely not as great a hit as having more funds to look after those you love.”

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Meanwhile, those who have already invested their savings in Premium Bonds should check to see whether they are owed money.

The latest figures show that more than two million Premium Bond prizes worth a combined total of £74,452,325 remain unclaimed.

Helen Saxon, banking editor at, said: “For some due larger prizes, these really are life-changing amounts of money.

“So check now and remember (with apologies to the lottery) it could be you!”

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