Matthew is an award-winning journalist, specialising in savings, tax and insurance.
Two lucky premium bond holders have become millionaires after winning the jackpot in May's National Savings & Investments (NS&I) prize draw.
The £1m winners are from Hampshire and Outer London. Meanwhile, 87 other winners were picked for the next-best prize of £100,000.
Buying premium bonds for children can be a fun way to teach the next generation about saving – but are there better ways to invest in their future?
Here, Which? reveals the winning premium bond numbers and crunches the numbers on the chances of your child winning the jackpot.
The first winning bond (514CV247038) was bought by a lucky winner living in Hampshire and is part of a total holding of £45,000. The winning bond was bought in September 2022.
The second winner, from Outer London, bought their bond (401XE212038) in July 2020. They have a total holding of £10,575.
There were 5,888,574 premium bond prizes paid out in the May draw. Of these, 5,812,817 were worth £100 or less.
In total, this month's prizes were worth £453,420,125.
| Value of prize | Number of prizes |
|---|---|
| £1,000,000 | 2 |
| £100,000 | 87 |
| £50,000 | 173 |
| £25,000 | 346 |
| £10,000 | 867 |
| £5,000 | 1,734 |
| £1,000 | 18,137 |
| £500 | 54,411 |
| £100 | 2,174,172 |
| £50 | 2,174,172 |
| £25 | 1,464,473 |
Source: NS&I
Children currently hold 830,911 bonds worth £2,326,734,607. And these young savers have exactly the same chance of winning as anyone else.
In fact, NS&I data shows there were 99,627 winners under the age of 16 in April's draw. While most of these lucky kids won between £25 and £100, four bagged a whopping £50,000 each.
This month's jackpot winners may be grown-ups, but a total of 13 child premium bond holders have become millionaires since 2005.
Children can't invest in premium bonds themselves, however. They'll need to find someone over the age of 16 to buy for them. An adult will also need to be chosen to manage the account on their behalf.
If a child wins a prize, it's up to the nominated adult to decide what happens to that money. While smaller prizes can be reinvested, up to the maximum £50,000, jackpot winners will have to move most of their winnings elsewhere.
Once the child turns 16, they can manage the premium bonds themselves. To do this, they will have to register online, using their NS&I number or account holder's number. You can find these details on correspondence sent you by NS&I. After that, there will be an identity check and possibly a registration form to fill out – sometimes, these will need to be signed by a witness.
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Family life can be hectic, so it's easy to forget about your child's premium bonds and find the monthly prize draw has slipped your mind. But if you don't check your numbers, you may not realise you've won a prize.
According to the latest NS&I data, there are 55,973 unclaimed prizes belonging to people who were under the age of 16 when they won.
A prize is recorded as unclaimed if you haven't come forward to claim it after 18 months. The best way to avoid this happening is to opt to automatically receive your prizes via bank transfer or reinvestment.
To see if you have a prize waiting for you or your child, use NS&I's prize checker tool – or use its tracing service if you've lost your details.
The chances of winning any prize is the same for any premium bond holder, regardless of age. Sadly, whether you are an adult or a child, the odds are not in your favour.
The probability of each £1 premium bond number winning a prize is very slim at 21,000 to 1. It means in an average month a typical bond holder is likely to win nothing at all.
If you are looking for more reliable returns, you may want to consider opening a Junior Isa instead. While these children's accounts only allow you to save up to £9,000 tax-free a year – as opposed to the premium bond limit of £50,000 – they offer guaranteed monthly interest.
Many accounts also now offer deals that beat the current inflation rate of 3.2%.
Despite the 4.4% prize fund rate, premium bonds don't pay interest. If your child doesn't win any prizes, their nest egg will lose value in real terms over time due to inflation.
The table shows the top rates for Junior cash Isas with online access:
| Junior Cash Isa | AER | Terms |
|---|---|---|
| Coventry Building Society | 4.95% | £1 minimum deposit |
| Skipton Building Society | 4.75% | £1 minimum deposit |
| National Savings & Investments | 4% | £1 minimum deposit |
| Tesco Bank | 4% | £1 minimum deposit |
| Halifax | 3.65% | £1 minimum deposit |
Source: Moneyfacts. Correct as of 1 May, but rates are subject to change.
All the top-rate accounts can beat inflation and your child can start saving with just £1. NS&I's own Junior Isa product is ranked fourth in the table, with a competitive rate of 4% AER.
The Junior Isa market is dominated by building societies, many of which have accounts with higher rates than those listed in the table. Beverley Building Society, for example, offers 5.5% AER for its Junior Isa. The catch is that these top rates are often only available to savers living in the local area and you may only be allowed to open an account in branch or by post.
When your child reaches the age of 18, the account will convert into an adult Isa, which they can take control of.
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