December's premium bond winners revealed – do bonds make good Christmas gifts?

Two lucky premium bond holders have become millionaires after winning the jackpot in the National Savings & Investments (NS&I) December draw.

The £1m winners are from Kent and Cumbria. Meanwhile, 84 other winners bagged the next-best prize of £100,000.

Here, Which? reveals the winning premium bond numbers and looks at whether the popular product is worth giving as a Christmas present.

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December 2024 premium bond winners

We at Which? are sent the details of the premium bond jackpot winners and prize draw data the day before full results are made available to all premium bond holders via the app and online.

This means we can reveal that the first winning bond (405PY086681) was bought by a lucky winner living in Kent, and is part of a total holding of £50,000. The winning bond was bought in July 2020.

The second winner, from Cumbria, bought their bond (538KR930303) in April 2023. They have a total holding of £33,275.

• Find out more: should I get premium bonds?

How many winners were drawn in December?

There were 5,806,049 prizes given out in the December prize draw, worth a total of £441,743,525. Of these, 5,732,249 were worth £100 or less.

Prize fund rate slashed again

The premium bond prize fund rate will fall from 4.15% to 4% from January's draw. It will be the second month in a row that the rate has been cut, after it was slashed by 0.25 percentage points for this month's draw.

The odds of winning will remain the same at 22,000 to 1 and there will still be two jackpot winners, but the estimated number prizes worth between £50 and £100,000 will drop by 201,328. 

The number of £25 prizes will see a boost of 285,401 in the new year, however.

NS&I claims the cut is in response to tumbling rates across the savings market.

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Are premium bonds a good Christmas gift?

If you're stumped for something to buy a young family member for Christmas, premium bonds are a great alternative to cold hard cash.

Anyone aged 16 or over can buy premium bonds on behalf of a child and they have the same chance of winning £1m as adult holders. The minimum investment is £25, with a maximum holding of £50,000. Plus, any winnings are entirely tax-free.

To make it more personal, you can ask NS&I for a free gift card and write your own message.

However, if you are buying for someone else's child, then check with their parent or guardian first. They will need to look after the investment until the child turns 16 and is allowed to manage the account themselves. 

NS&I is also likely to contact the parents to confirm identity and address, so make sure they are comfortable providing that information.

• Find out more: premium bonds – are they worth it?

How do other financial products compare?

The chance to win a prize can be just as exciting for a child, as it is for an adult. The downside is that the chances of winning anything are tiny – just 22,000 to 1 – and the odds of becoming a millionaire are even slimmer. 

If you're looking for a financial gift that offers guaranteed returns, consider giving one of the following products instead:

1. Junior Isas

Children are liable to pay tax on savings, and have the same income tax allowance as adults. There's also the '£100' rule to prevent parents using their own tax-free allowances.

To help your child avoid a bill from HMRC, you could open a junior Isa (Jisa) for them. Parents can deposit up to £9,000 a year into either a cash or stocks and shares product. Any interest earned on that investment is tax-free.

The money is locked away until a child turns 18 – at which point it converts to an adult Isa and the young person has full control over the money.

Jisa rates tend to be more competitive than traditional children's savings accounts, but our analysis in the summer found choice of cash product is more limited and there are often restrictions on opening the account and access.

• Find out more: best Junior Isas 2024 

2. Children's savings account

If you've used up your child's tax-free allowance or you want to access the money before they turn 18, banks and building societies also offer instant access, fixed-term, and regular saver accounts for children. 

Most of these accounts can be opened by children themselves from age seven, so it's great to get them involved. Just watch out for catches such as introductory bonuses, limits on withdrawals, maximum or minimum account balances, and investment charges (if you opt for a stocks and shares account).

Providers often offer free gifts such as a piggy bank, but don't be distracted. Focus more on getting the best return and check on the progress at least twice a year.

Savings rates hit record highs in 2023, but interest is now falling. It's therefore more important than ever that you shop around for the best deal. Take a look at our guide on the best children's savings accounts for the latest rates.

3. Children's pensions

It's never too early to start saving for retirement. You can help a young person build their savings by opening a pension fund that they can access when they retire. 

Pensions can be opened for a child anytime from birth until they turn 18 and, although only a parent or legal guardian can start one, anyone can contribute once it's up and running.

Unlike adult self-invested personal pensions (Sipps), which let you pay in up to 100% of your earnings every year and qualify for tax relief on contributions up to a maximum £60,000, the junior Sipp allowance for the 2024-25 tax year is just £3,600. 

You have until 5 April 2025 to use the current annual allowance. But you don’t have to pay in this much: most providers let you contribute £25 a month at the lower end.

• Find out more: how to save for your children's future