Premium Bonds Warning: £100M in Unclaimed Prizes and Falling Payout Rates — Are You Sitting on a Forgotten Fortune?

A hidden fortune worth more than £100 million is sitting unclaimed in Premium Bond prizes across the UK, and you could be one of the winners without even knowing it. At the same time, payout rates on these popular savings products have been cut repeatedly this year, prompting questions over whether they are still worth holding.

Millions in Prizes Gathering Dust

According to BBC News, there are over 2.5 million unclaimed Premium Bond prizes totalling more than £100 million. Among these are 11 prizes worth £100,000, the second-largest amount available, and the oldest unclaimed prize dates all the way back to November 1957.

Many prizes go uncollected because bondholders move house without updating their details, or hold old paper certificates that have never been registered online. Others were given bonds as children and have forgotten about them entirely.

National Savings & Investments (NS&I) says it has made efforts to reunite winners with their money, including sending out around 600,000 cheques recently. Yet about 10% of payouts still arrive by cheque, which can be lost, ignored or never cashed.

Even with tracing services running hundreds of thousands of searches each year, outdated contact information and administrative hurdles mean many prizes remain in limbo. Experts are now calling for major improvements in the tracing process to help reduce the growing pile of unclaimed cash.

Payout Rates Cut to Two-Year Low

The annual prize fund rate for Premium Bonds has been reduced three times in 2025, from 4% in January to 3.6% tax-free in August, the lowest level since early 2023, according to SAGA.

Andrew Westhead, NS&I's Retail Director, said the reductions reflect 'changing savings landscapes' and the need to balance 'savers' interests, taxpayer cost and financial stability'.

But for many, the average returns are far lower than the headline rate because of the lottery-style format. A typical £100 holding yields an average of just £3.60 a year, and that average is skewed by a handful of big winners. Most bondholders receive little or nothing in any given year.

Are They Still Worth Holding?

With fixed odds of 22,000 to 1 per £1 bond per monthly draw, winning a large sum is extremely rare. Around 80% of all prizes are small amounts between £25 and £100, making substantial returns unlikely. Nearly two-thirds of holders, some 14.4 million people, have never won a prize.

While Premium Bonds offer tax-free winnings and government-backed capital security, their effective returns lag behind some standard savings accounts now paying more than 5% interest. Even at the maximum £50,000 holding, average returns are around 3.3%, which is well below the top easy-access rates.

Yet the bonds retain their appeal for those who value the safety net of guaranteed capital and the chance, however slim, of winning big without paying tax.

Still the Nation's Favourite

Despite the falling returns, Premium Bonds remain one of Britain's most trusted savings products. As of August 2025, around 24 million UK residents hold bonds worth over £127 billion. That is more than one in three people nationwide.

For many, Premium Bonds are a safe place to park money with the added thrill of prize draws. The government promises to redeem bonds at full face value at any time, providing reassurance not often found in riskier investments.

If you or a family member have ever owned Premium Bonds, especially older paper versions or childhood gifts, it is worth checking your details with NS&I and using their prize checker. With over £100 million in unclaimed winnings, you could be sitting on a life-changing sum without even realising it.