Premium Bonds and National Savings

What is NS&I?

National Savings and Investments, usually shortened to NS&I, is a savings organisation backed by HM Treasury. It has existed in one form or another for more than 150 years, and millions of people in the UK still hold money with it.

The main difference between NS&I and a bank or building society is how your money is protected. Bank savings are covered by the Financial Services Compensation Scheme up to a set limit per eligible person, per authorised institution. Some banking brands share a single authorisation, which means they also share one limit. You can check the current limit on the FSCS website. Money held with NS&I is guaranteed by the government in full, with no upper limit on that protection. Individual products still have limits on how much you can hold.

For many years, National Savings products were a normal part of family finances. Deposits and withdrawals were handled at the post office, and savings books and certificates were often kept with other household papers. Older holdings can be overlooked when paperwork is lost, addresses change or an account holder dies.

NS&I's product range has changed over time. Some older products, such as certain Savings Certificates, are closed to new investment but are still held by existing customers. Most accounts are now managed online, by phone or by post.

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How Premium Bonds work

Premium Bonds are the best known NS&I product. They pay no interest; any return comes from prizes. Each £1 bond you hold is entered into a monthly prize draw, and winning bonds are picked at random by a machine known as ERNIE.

Prizes start at £25 and go up to a £1 million jackpot. All prizes are free of UK Income Tax and Capital Gains Tax. Your invested capital is backed by HM Treasury. You can request repayment at any time, although withdrawals are not immediate.

The odds of winning, the size of the prize fund and the minimum and maximum holdings are set by NS&I and can change. Check the Premium Bonds page on the NS&I website for current figures. You may also see an annual prize fund rate quoted. This describes the overall prize fund. It is not an interest rate or a guaranteed return on your own holding.

Keep these points in mind:

• Prizes are not guaranteed, so people with smaller holdings may win little or nothing for long periods.
• Over time, rising prices can reduce the real value of money that is not earning a return.
• Bonds for children under 16 are managed by a nominated parent or guardian. The child normally takes control at 16.
• Newly purchased bonds must normally be held for a full calendar month before becoming eligible for a draw. Bonds bought through automatic prize reinvestment are eligible for the next draw.

If you want a predictable return, a standard savings account or ISA may suit you better. MoneyHelper, the free guidance service backed by the government, has information on comparing savings options.

Your situation may be slightly different. ask a question below ↓ and our editorial team will reply with our advice.

Finding lost bonds and unclaimed prizes

Some Premium Bond prizes remain unclaimed, often because the holder moved without updating their address or lost track of bonds bought years ago. Finding a holding and claiming a prize are separate tasks. Tracing identifies savings you hold. The prize checker shows whether a holding has won. Finding a prize in the checker does not complete a claim, and you may need to contact NS&I and verify your identity before it is paid.

Unclaimed prizes do not expire, however long ago they were won. You can check using the prize checker on NS&I's website or its Premium Bonds prize checker app. For the prize checker, you need your Premium Bonds holder's number. This is different from your NS&I number and can be found on Premium Bonds records or in your online account.

If you do not have your holder's number, or think you have other forgotten NS&I savings, use the NS&I tracing service, which is free. My Lost Account is another free service that searches NS&I, banks and building societies at the same time. Use it if you do not know which organisation held the savings. You do not need to pay a claims company to trace NS&I savings or claim Premium Bond prizes.

Provide as much identifying information as possible, including:

• full name, including any previous names
• date of birth
• current and past addresses
• any old certificates, statements or reference numbers

Once you have found your bonds, update your contact details. You can also register for NS&I's online service and choose to have future prizes paid into your bank account by providing your bank details. Eligible customers can instead choose to reinvest prizes, subject to the holding limit.

Premium Bonds and NS&I savings after someone dies

When someone dies, their NS&I savings form part of their estate. Although Premium Bond prizes are tax free, the bonds themselves can still count towards the estate for Inheritance Tax purposes.

Premium Bonds cannot be transferred to another person. They can remain eligible for prize draws for up to 12 months from the holder's date of death, unless they are repaid earlier. Prizes won during that period belong to the estate. Draw eligibility ends after the 12 months, and the person administering the estate should contact NS&I about repayment.

You must notify NS&I separately. Tell Us Once does not notify NS&I, although it can notify several other government organisations. NS&I will explain what evidence and documents it needs, so follow its current bereavement guidance. Depending on the circumstances and the amount held, these may include evidence of the death and a grant of probate, letters of administration or confirmation in Scotland.

If you suspect a relative had NS&I savings but cannot find the paperwork, the NS&I tracing service can also search for people who have died. NS&I will need to establish that you have authority to deal with the estate before it discloses information or releases funds. Being a relative does not automatically give you that authority. Check for unclaimed prizes at the same time, as older holdings may have won prizes that were never collected.

The Next Step

Now that you have read through the advice above, you might want to put it into practice. Our Unclaimed Money Tracer lets you tell us what might be out there and we will map out the exact UK services to search, in the right order, to track down unclaimed money. Try it now →