Premium Bonds prices are 66 years old – but how much would they be worth now if they rise with inflation?

National Savings & Investments (NS&I) premium bonds remain the country’s most popular savings product.

The deals offer savers the chance to win prizes of up to £1 million every month and have attracted 21 million customers.

The lottery-style draw obviously appeals to the British, but anyone buying Premium Bonds knows they have to be lucky to get any return on their money, let alone one that can match inflation.

Inflation is now at 6.8 percent, after a gradual decline from its peak of 11.1 percent in October 2022.

A blast from the past: This version of NS&I’s computer ERNIE, the Electronic Random Number Indicator Equipment, chose winners of Premium Bonds from February 1973 to August 1988

Using This is Money’s historic inflation calculator, the value of the £1 million jackpot prize, first launched in April 1994, would be £2.4 million today if the increases were linked to inflation .

So what would the other prizes be worth now if adjusted for inflation since they launched?

Premium Bonds ‘interest’ is 4.65 per cent as of August 2023, but is not paid in the same way as most savings accounts.

Instead, each month enters into a prize draw, with ERNIE (the Electronic Random Number Indicator Equipment) selecting the winners. It means you can win up to £1 million, but then again your savings might not pay off at all.

The very first drawing of NS&I Premium Bonds, started by Postmaster General Ernest Marples, took place on June 1, 1957. The inflation rate that year was 3.7 percent.

The largest prize to be won at the time was £1,000, with the other prizes on offer being worth £500, £100, £50 and £25.

Prices launched in 1957 would have made the biggest jump today if they had risen in line with inflation: a whopping 2,874.95%.

The price of £1,000 would be £29,749.47 if inflation was taken into account, while the price of £500 would be £14,874.73 today.

The current price of £100 would have risen to £2,974.95, while £50 would be worth £1,487.47 and the smallest prize of all – £25 – would be worth £743.74 today.

The £5,000 Premium Bonds price was introduced in August 1960 and today would be £138,431.60, another big jump of 2,668.63%.

In February 1966, NS&I introduced a price of £25,000 and would be £575,462.80 today if linked to inflation. The £10,000 prize was added to the draw in 1980 and would be worth £60,273.16 today.

The biggest prizes after the £1 million jackpot – the £100,000 and £50,000 prizes – were launched in 1976 and 1971 respectively.

What the prices of Premium Bonds would be worth today with inflation
Prize amount Launch date Value adjusted for inflation % increase
£1 million April 1, 1994 £2,423,152.00 142.32%
£100,000 November 1, 1976 £998,619.20 898.62%
£50,000 August 1, 1971 £920,404.90 1,740.81%
£25,000 February 1, 1966 £575,462.80 2,201.85%
£10,000 January 1, 1980 £60,273.16 502.73%
£5,000 August 1, 1960 £138,431.60 2,668.63%
£1,000 June 1, 1957* £29,749.47 2,874.95%
£500 June 1, 1957 £14,874.73 2,874.95%
£100 June 1, 1957 £2,974.95 2,874.95%
£50 June 1, 1957 £1,487.47 2,874.95%
£25 June 1, 1957** £743.74 2,874.95%
*First Prize Draw for Premium Bonds** From 1 January 1980, the £25 prize was dropped, with £50 being the lowest value Premium Bonds prize on offer. The £25 price was reintroduced in 2009. Source: NS&I

The prize of £100,000 would be worth almost ten times that amount, or £998,619.20, while the £50,000 would become £920,404.90 – again, if it were linked to inflation.

This week, This is Money editor Lee Boyce asked if it’s time for NS&I to ramp up the £1m prize pool.

But NS&I says it has no plans for that.

Jill Waters, retail director NS&I, said: ‘We welcome all the feedback, but currently have no plans to change the number of millionaires or introduce a bigger prize.

“The current prize draw structure allows us to offer a range of prizes. It also balances the opportunity to win life-changing sums of money with helping people receive regular returns on their hard-earned savings.”

How likely are you to win a £1 million prize?

During the prize draw in August, the odds of winning improved from 24,000 to 1 to 22,000 to 1, meaning each £1 bond now has the best chance of winning a prize in nearly 15 years.

NS&I added a further £30 million in prize money, but only two £1 million prizes are still being paid out each month – so the odds don’t look great when it comes to hitting the jackpot.

In any given year, someone with the maximum holdings of £50,000 has a 1 in 100,460 chance of winning the £1 million jackpot at least once.

This adds up to one in 502,280 for someone with £10,000 in Premium Bonds.

The odds of someone holding £1,000 in Premium Bonds winning the £1 million prize within a year are more than 1 in 5 million.

To put that into perspective, the odds of being eaten by a shark or struck by lightning in your lifetime are greater than the odds of winning the highest Premium Bonds prize in a year.

Some links in this article may be affiliate links. If you click on it, we may earn a small commission. That helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow a commercial relationship to compromise our editorial independence.