Martin Lewis Warns Against Premium Bonds

Martin Lewis, the UK money-saving expert, advised that while premium bonds are popular—over 22 million Britons invest in them—they may not be suitable for everyone. He noted that the capital is safe, being backed by the government, and winnings are tax-free, creating an attractive low-risk option. However, for those investing small amounts, the chances of winning are slim; for instance, investing £1,000 gives a 56.5% probability of winning nothing. Lewis emphasized that the more you invest, the closer you get to the average prize fund rate, making it a better option for larger sums. He also debunked the myth that older bonds are less likely to win, explaining that all bonds have the same chance, with newer bonds simply representing a greater number. Ultimately, for those who do not pay tax on savings, he recommends considering other saving options instead.