£1,000 Premium Bonds
- 1 Year
- 0% (~£0)
- 2 Years
- 2.50% (~£50)
- 5 Years
- 2.50% (~£125)
- 10 Years
- 2.75% (~£275)
- Equivalent Savings Rate (10yr)
- Basic (20%): 3.44% | Higher (40%): 4.58% | Additional (45%): 5.00%
Based on current NS&I prize fund rate of 4.00% and odds of 1 in 22,000 per £1 bond per month. Data source: NS&I December 2025.
What's the expected return on £50,000 in Premium Bonds?
* Median returns shown. Actual returns vary based on luck. Premium Bonds do not guarantee any return. Use the interactive calculator above for detailed probability distributions.
Tax Status: All Premium Bonds prizes are 100% tax-free, regardless of your income tax band. This makes them particularly attractive for higher and additional rate taxpayers.
How do Premium Bonds compare to a typical 4.5% savings account? Here's a side-by-side comparison for the maximum £50,000 investment.
| Factor | Premium Bonds | Savings (4.5%) |
|---|---|---|
| 1 Year Return | ~£1,550 (median) | £2,250 (guaranteed) |
| Tax (Basic 20%) | £0 | -£450 |
| Tax (Higher 40%) | £0 | -£900 |
| Tax (Additional 45%) | £0 | -£1,013 |
| 10 Year Return | ~£16,125 (median) | ~£27,648 (gross) |
| Return Guarantee | Variable (luck-based) | Guaranteed |
| Capital Security | 100% (Gov backed) | £85k FSCS limit |
| Best For | Higher/Additional rate taxpayers, lottery excitement | Guaranteed returns, basic rate taxpayers |
Note: Premium Bonds returns are probabilistic medians. Higher rate taxpayers may benefit more from tax-free Premium Bonds prizes. Savings account comparison assumes no Personal Savings Allowance remaining. Data based on NS&I December 2025.
With the maximum £50,000 investment in Premium Bonds, the median expected return is 3.23% per year over 10 years, totalling approximately £16,125 in tax-free winnings. For a single year, expect around £1,550 (median).
This is equivalent to a 5.38% gross savings account for a 40% taxpayer. Based on NS&I December 2025 odds of 1 in 22,000.
Over a 10-year period, Premium Bonds returns become more predictable due to the law of large numbers. For £50,000, expect a median return of 3.23% annually. For £25,000, the median is approximately 3.21%. Smaller investments like £1,000 have higher variance—you might win nothing or exceed expectations.
Our calculator uses Poisson distribution modelling to show the full probability range, not just optimistic averages.
With £10,000 in Premium Bonds over 5 years, expect median winnings of approximately £1,550 (3.10% annual return). Whether this is "worth it" depends on your tax situation:
If you can get a higher after-tax return elsewhere, savings accounts may be better. Premium Bonds add the excitement of potentially winning larger prizes.
Yes, Premium Bonds are particularly attractive for higher (40%) and additional (45%) rate taxpayers because all prizes are tax-free. For a 40% taxpayer with £50,000 invested, the 3.23% median return is equivalent to a 5.38% gross savings rate. For additional rate taxpayers, it's equivalent to 5.86%.
Compare this to taxable savings where you'd lose 40-45% of interest to tax (beyond your Personal Savings Allowance).
Our calculator uses statistical probability modelling based on official NS&I prize data. Unlike simple "expected value" calculators, we use:
This shows you median (50th percentile) returns—what half of investors would beat—rather than misleading averages skewed by rare jackpot wins.