As the graph shows, growth was relatively strong post-pandemic, when the prize fund rate increased to reflect higher interest rates. It peaked at 4.65% in late 2023. However, your pot failed to keep up with inflation, meaning you lost money in real terms. What cost £5,000 in 2016 would cost £6,952 by early 2026, according to the Bank of England.2
Of course, you might have been luckier and banked far more – like the saver who won £1m last year from a £100 holding. On the flip side, you could have ended up with less, or nothing at all. That is part of the difficulty and thrill of holding Premium Bonds.
A global tracker fund
The trade-off becomes clearer when you consider other places you could have put your money in the past decade.
Five years or more is generally considered a suitable timeframe for investing in the stock market. While equities are volatile assets – and there is always a risk they will lose value – they have higher growth potential than cash, and a long-time horizon increases your chance of success.