Premium Bonds have long been a popular savings choice across the UK, especially for those who prefer the excitement of potentially winning tax-free prizes over earning regular interest. Whether bought as a gift for a grandchild, a place to tuck away savings, or simply as a safer alternative to riskier investments, Premium Bonds hold a special place in the British financial landscape.
But there comes a time for many savers when they begin to ask: Should I cash in my Premium Bonds? And if so, how do I do it?
In this comprehensive guide, we’ll explain how to cash in Premium Bonds step-by-step, discuss why thousands of people each year decide to cash theirs in, and share real stories from UK savers who made that decision. Whether you’re looking to reinvest, fund a big life event, or simply bring dormant savings back to life, here’s everything you need to know.
Why UK Savers Decide to Cash In Premium Bonds?
Although Premium Bonds remain a favourite savings option for millions, not everyone holds onto them forever. Based on recent conversations and surveys, here are some of the most common reasons people across the UK choose to cash in their Premium Bonds:
1. Disappointment with Prize Winnings
One of the biggest draws of Premium Bonds is the chance to win monthly tax-free prizes, ranging from £25 to £1 million. However, for many, the odds can feel frustratingly slim.
Take the story of Dave from Leeds. He had £10,000 in Premium Bonds for eight years and during that time, he won just two £25 prizes. Eventually, Dave concluded that while the dream of a big win was nice, the reality of earning less than a typical savings account prompted him to cash in his bonds and explore other investment opportunities.
2. Life Priorities Shift
Sometimes, the decision to cash in isn’t about disappointment — it’s about necessity.
Claire from Bristol, for example, had held her Premium Bonds for over a decade. When her daughter was ready to purchase her first home, Claire saw an opportunity to put her money to immediate good use by helping with the deposit. For Claire, the value of seeing her daughter get onto the property ladder far outweighed the distant possibility of a jackpot.
3. Better Interest Rates Elsewhere
Premium Bonds don’t pay interest. They rely entirely on the chance of winning prizes. As savings rates have improved in recent years, some savers are now finding that traditional savings accounts or fixed-rate ISAs offer better financial growth.
Simon from Liverpool, who had £5,000 tied up in Premium Bonds for five years, realised he could earn a predictable return with a simple savings account. “After five years and only winning £75 in total, I felt I’d be better off elsewhere,” Simon explained.
Step-By-Step: How to Cash In Premium Bonds?
If you’ve decided to cash in your Premium Bonds, the process is remarkably straightforward. Here’s a detailed breakdown of how to do it efficiently.
Step 1: Gather Your NS&I Details
You’ll need your Premium Bond holder’s number to start the process. This can be found:
- On your NS&I account statements
- In your NS&I online account
- On your original Premium Bond purchase documents
If you’ve misplaced these details, you can request a reminder from NS&I directly.
Step 2: Choose How You Want to Cash In
There are three primary methods available for cashing in your Premium Bonds:
Cashing In Online
The fastest and most convenient method is via the NS&I online portal. If you already have an NS&I account, simply log in, select your Premium Bonds, and follow the on-screen instructions to cash them in.
Cashing In by Phone
You can also call NS&I directly on 08085 007 007 to request a cash-in over the phone. For security, they will ask you to verify your identity.
Cashing In by Post
For those who prefer traditional methods, you can complete a Premium Bonds cash-in form and send it by post to:
NS&I, Sunderland, SR43 2SB
Postal applications typically take longer to process, especially if additional verification is needed.
Step 3: Provide Your Bank Account Details
NS&I no longer sends out cheques for cashed-in bonds. All payments are made via direct bank transfer. Ensure the account you provide is in your name.
Many savers have found this to be a quick and secure method. Janet from Manchester, for example, cashed in £3,000 worth of bonds online and had the funds in her account within three working days — far quicker than she expected.
Step 4: Wait for the Funds
Typically, NS&I processes repayments within eight working days from receiving your request. However, some savers have reported receiving their funds sooner, particularly when applying online.
It is always a good idea to check your account regularly during this period to ensure everything has been processed correctly.
Step 5: Check for Unclaimed Prizes
One important point often overlooked is that you remain eligible for prizes won in draws before the day you cashed in.
Mark from Edinburgh cashed out his bonds in May but was surprised when he received a £50 prize payout the following month. It turned out he had won in the April draw, and NS&I automatically deposited the prize into his bank account even though he had already cashed out.
You can check for any unclaimed prizes via the NS&I website or by contacting their customer service team directly.
What Important Factors Should You Consider Before Cashing In?
Before making your final decision, consider the following:
Are You Missing Out on Future Prizes?
Premium Bonds operate as a prize draw, and each £1 bond you hold is entered monthly. While some people accept the low odds, others prefer the certainty of earning guaranteed interest elsewhere.
Have You Reviewed Current Savings Rates?
Banks and building societies across the UK are currently offering competitive savings and ISA rates. If you’re looking for growth over security, your money might work harder elsewhere.
Do You Need Immediate Access to Funds?
Online and phone cash-ins are the fastest ways to access your money. Postal applications, while still effective, can take a bit longer.
Have You Checked for Unclaimed Prizes?
It’s worth double-checking whether you’ve won any past prizes that you might have missed. NS&I can help you track this.
Real Voices: Why UK Savers Chose to Cash In
Linda from Surrey: “It Was Time to Help My Grandson”
Linda held Premium Bonds since the 1980s and had grown attached to the idea of winning big. However, when her grandson needed support for university tuition, she decided that using her savings for his education would bring her more joy than the chance of a prize ever could. Linda applied online and was able to support her grandson’s first term within the same week.
Peter from Newcastle: “I Wanted My Money to Work Harder”
Peter realised after five years of holding £8,000 in Premium Bonds that the return was minimal. After doing some research, he discovered he could earn over 4% interest in a fixed-rate ISA. For him, the decision was about moving from possibility to predictability.
Final Thoughts: Should You Cash In Your Premium Bonds?
Cashing in Premium Bonds is a personal decision, but it’s important to ensure your money is working in a way that aligns with your financial goals.
If you value security and the thrill of possible wins, you may wish to hold onto your Premium Bonds. If you’re looking for certainty, growth, or you need the funds for something meaningful, cashing in may be the right step.
Either way, the process is simple, safe, and customer-friendly — just make sure you understand the options and double-check for any unclaimed prizes before you proceed.
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