Answers · UK 2025/26
What is the effective annual return on Premium Bonds in 2026?
The Premium Bonds prize fund rate is approximately 4.40% per year, equivalent to roughly 3.8-4.0% tax-free interest depending on holding size.
Full answer
National Savings & Investments sets the Premium Bonds prize fund rate -- approximately 4.40% in mid-2026 -- but this is not a guaranteed return. Individual holders receive prizes randomly (odds 1 in 21,000 per £1 bond per month). The median holder with the full £50,000 maximum holding might expect around £1,800 in prizes per year (~3.6%). The main benefit is that prizes are completely tax-free, making them especially valuable for additional rate taxpayers. Returns are not guaranteed and NS&I can change the rate at short notice.
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.