A stark warning has been issued to the millions of Britons holding Premium Bonds from National Savings and Investments (NS&I) who have failed to secure a single prize over the past year.
Time for a Financial Review
With over 22 million people investing more than £132 billion in the product, Premium Bonds stand as the UK's most popular savings vehicle. However, personal finance expert Aaron Peake from the free credit score service CredAbility cautions that an extended dry spell should trigger a reassessment.
"If you’ve gone a year or more without any wins, it might be time to review your options," Mr Peake advised. He highlighted a critical factor many savers overlook: money held in Premium Bonds does not earn compound interest, unlike funds placed in many standard savings accounts or Cash ISAs.
Weighing Sentiment Against Guaranteed Growth
The expert acknowledged the emotional attachment many have to their Bonds, often holding onto them for sentimental reasons or the thrilling prospect of a life-changing win. Others simply forget they own them or hesitate to cash out, hoping their luck will turn.
"If you have not had any luck and could earn guaranteed interest elsewhere, it may be worth moving at least part of your balance to a regular savings account or cash ISA," he recommended.
Strategic Timing and Suitability
Mr Peake pointed out that the end of the calendar year presents an ideal moment for a financial health check, particularly before the new tax year begins in April. "Checking your savings portfolio now allows you to make the most of any ISA allowances and decide whether Premium Bonds still fit your goals," he said.
He clarified that Premium Bonds can still play a valuable role for certain individuals. "They can work well for people who already have a healthy emergency fund and want to keep some money in a risk-free place that still gives them a chance of winning more than they would in a standard savings account," he explained.
It is crucial to remember the fundamental mechanics of the product: each £1 Bond unit has an equal chance in the monthly prize draw. Therefore, while the odds are fixed per Bond, the more Bonds you hold, the greater your overall chance of winning becomes.
