What are the odds of winning a £1m Premium Bonds prize with a holding of £500 or less?

More than 22million savers hold National Savings and Investments (NS&I) Premium Bonds in the hope of winning a big prize in the monthly draw. 

Monthly prizes range from £25 to £1million, with the winning numbers chosen by ERNIE, NS&I’s electronic random number generator.

There are two £1million jackpot prizes, and in the October draw there were 88 £100,000 prizes and 177 £50,000 prizes. These are the two largest prizes in the draw after the top £1million prize. 

Currently, the odds of any £1 bond winning a prize are 21,000 to 1, with the Premium Bonds prize fund rate – or the average prize payout per year – standing at 4.4 per cent.

But the odds of winning a Premium Bonds prize will lengthen to 22,000 to 1 in the December draw as NS&I announced it would cut the Premium Bonds prize fund rate to 4.15 per cent. 

Each month, in addition to the coveted £1million jackpot prize winners, we keep an eye out for the luckiest Premium Bonds holders who manage to bag big prizes (the £50,000 and £100,000 prizes in addition to the £1million prize) with tiny holdings.

Of course, the more you hold, the better the odds of winning big. But, contrary to a common myth, you do not need to own the maximum holding of £50,000 to bag a big prize. 

Even someone with only a small savings pot who has just opened their account has a chance – albeit a very small one – of winning big.

Nothing quite embodies this as much as the 2004 £1million jackpot winner from Newham in London, who won with a mere £17 in Premium Bonds which they purchased in February 1959.

More recently, in the October draw, three Premium Bonds holders scooped £50,000 and £100,000 prizes with small holdings of £500 or less.

A Premium Bonds holder based in Gloucestershire bagged a £100,000 prize with a tiny holding of just £275, while two other winners, from North East Scotland and Lincolnshire, bagged £50,000 prizes with holdings £300 and £500 respectively.

It prompted us, and This is Money readers, to ask: What is the likelihood of bagging a big Premium Bonds prize with a tiny holding of £500 or less? 

We decided to seek the guidance of a statistics wizard to help us understand the odds of this, and how the amount someone holds in Premium Bonds changes those odds.

We asked Dr Michael Dunne-Willows, a statistician and ambassador for the Royal Statistical Society, to crunch the numbers.

The probability of winning a £1million jackpot prize with a £50 holding is 1 in 1.2billion. 

As the odds of winning a prize get better the more you hold in Premium Bonds, those who hold £100 have 620 million to 1 odds of winning the £1million jackpot.

These odds narrow to 250 million to 1 if you have £250 in Premium Bonds. If you hold £500 you have a 1 in 120 million chance of winning a £1million prize. 

The likelihood of winning at least £100,000 in the Premium Bonds prize draw with a £50 holding is 1 in 27 million. 

If you have a holding ten times that, at £500, the odds are 1 in 2.7 million. Those who have £100 in Premium Bonds have a 1 in 13 million chance of winning at least £100,000 and if you hold £250 your odds are 5.5 million to 1.

When it comes to £50,000 prizes, Premium Bonds savers who hold £50 have a 1 in 9.5 million chance of winning at least £50,000. 

If you have £100 in Premium bonds the odds of winning at least £50,000 are 4.7 million to 1, narrowing to 1.8 million to 1 if you hold £250.

Holding £500 in Premium Bonds would mean you have a 1 in 940,000 chance of winning at least £50,000. 

To bring these odds to life, This is Money also analysed NS&I data from the past 54 Premium Bonds draws, stretching back to May 2020 when the Pandemic Premium Bonds boom took hold, to see how many people have managed to scoop one of the big prizes with a tiny holding.

Out of 6,070 winners of the biggest Premium Bonds prizes in that time, 46 holders won £50,000 or £100,000 prizes with holdings of £500 or less – that’s 0.8 per cent. 

Twenty of the £100,000 prizes were won by NS&I customers with a holding of £500 or less and 26 of the £50,000 prizes were won by those who had a holding of under £500.

The most unlikely of these winners was a Norwich-based winner who bagged a £50,000 prize with a holding of just £5 in the December 2023 draw. They purchased their winning bond in April 2004.

No £1million jackpot winner won their prize with a holding of £500 or less since May 2020, but 12 people holding £1,000 and less have scooped the £1million jackpot prize since 1994, when the first £1million prize was launched.

James Blower, founder of website Savings Guru said: ‘There’s approximately 1.2million Premium Bond holders with the maximum £50,000 holding. Therefore, around £60billion of the almost £126billion saved in Premium Bonds is from those with the maximum holdings – just under 50 per cent.

‘Given there are 177 £50,000 prizes each month, it isn’t surprising that some have been won by those with smaller holdings. Similarly, there are 883 £10,000 prizes each month so the odds do favour that smaller holders have a chance of winning at least some of those.

‘There were 47,682 £10,000 prizes in that period so it isn’t a shock that 20 were won by lower value holdings.

‘However, there are only two £1million prizes a month so it is not at all surprising that the odds don’t favour smaller holders winning at all.’

Anna Bowes, co-founder of website Savings Champion said: ‘The very fact that some people have won with a tiny amount will keep many invested. 

‘The risk to £500 earning no interest is maybe £25 a year – at current best buy rates. There will be people prepared to risk that for the chance of winning big – or indeed winning something at all.’