How Premium Bonds work: prizes, limits and the September 2026 rate change
Published · 3 min read · Figures checked . UK rules and rates change, so check the official sources below before you act.
Premium Bonds are a government-backed NS&I savings product that pays tax-free prizes instead of interest. This guide explains the limits, the current prize fund rate and odds, and what changed from the September 2026 draw.
What Premium Bonds are
Premium Bonds are sold by NS&I (National Savings and Investments), the government's savings bank. They do not pay interest. Instead, each £1 Bond has its own number, and the numbers are entered into a monthly prize draw. A random number generator called ERNIE picks the winners.
Prizes range from £25 up to £1 million. All prizes are free of UK Income Tax and Capital Gains Tax, according to NS&I. Because the result is a matter of chance, two people holding the same amount can win very different sums in the same month, and some months a holder may win nothing.
Key limits
- Anyone aged 16 or over with a UK bank account can buy Premium Bonds.
- The minimum purchase is £25 per transaction.
- The maximum holding is £50,000 per person.
- Bonds can also be held for a child under 16, with a parent or guardian managing them until the child turns 16.
- New Bonds must be held for a full month before they enter the draw. NS&I gives the example that Bonds bought in November become eligible for the January draw.
What changed in September 2026
NS&I announced that from the September 2026 draw the prize fund rate rose from 3.80% to 4.35%, and the odds improved from 22,000 to 1 to 21,000 to 1. NS&I estimated about 308,000 extra prizes, and a September prize pot of over £497 million compared with around £434 million in August.
The prize fund rate is not a rate paid to each holder. It sets the size of the total prize pot. How much any one person wins depends on luck. NS&I says the prize fund rate, prize values and odds can change at any time, so figures from one month may not apply later.
How safe is the money
NS&I says HM Treasury guarantees 100% of everything saved with NS&I, with no £120,000 cap. That is different from the Financial Services Compensation Scheme limit that applies to banks and building societies. A guarantee on the money you put in is not the same as a guaranteed return: you may win less than the amount that inflation takes off your money's buying power, or nothing at all.
Who this applies to
This guide applies to people in the UK aged 16 or over, and to parents or guardians holding Bonds for children. It does not cover other NS&I products such as Direct Saver or British Savings Bonds, which pay interest and have different rules. It is general information, not advice on whether Premium Bonds suit anyone's situation.
Checking prizes
NS&I offers an online prize checker where a holder enters their holder's number. NS&I also publishes monthly results showing how many prizes were won.
Check before you act
Rates, odds and prize numbers change, and this guide reflects what was published on the NS&I pages linked below on 7 October 2026. It can be worth confirming the current figures on those pages before making any decision.
Sources
For information only. See our disclaimer and editorial standards. Spotted an error? Tell us.
