Premium Bonds are a type of savings product offered by National Savings and Investments (NS&I) in the UK. Instead of earning interest, each £1 Premium Bond is entered into a monthly prize draw where it could win between £25 and £1 million tax-free. Premium Bonds are popular as a way to save with the chance to win, rather than just earning interest.
One question that often comes up is how many Premium Bonds a married couple can hold. There are limits in place on the maximum amount of Premium Bonds an individual or household can own. Let’s take a look at what these limits are and the reasons behind them.
What are the limits for individuals?
Each person can hold Premium Bonds up to a value of £50,000. This means an individual can have up to 50,000 separate £1 Premium Bond numbers registered in their name.
So if you are not married or in a civil partnership, the maximum amount of Premium Bonds you can hold in your name alone is £50,000.
This limit of £50,000 applies to each person individually. It does not matter what other savings you may have elsewhere – you can still hold up to the maximum allowed Premium Bonds.
The purpose of this £50,000 limit is to prevent any one person having an unfair advantage in the prize draws by owning a disproportionate number of Bonds compared to other savers. With nearly 100 billion Premium Bonds in circulation, the odds of any one Bond winning are already extremely long.
By restricting the amount each person can own, it helps ensure the prize funds are shared fairly across NS&I’s 21 million Bond holders.
What are the combined limits for married couples and civil partners?
For those who are married or in a civil partnership, the limits on Premium Bonds are higher.
A married couple or civil partners can hold up to £100,000 in Premium Bonds between them. This means that together, they can own up to 100,000 individual Bond numbers worth £100,000.
The £100,000 applies to the combined, total holdings in both of their names. Each person could hold up to £50,000 worth in their sole name, giving the couple a joint total of up to £100,000.
So if a married couple wanted to maximise their Premium Bonds holdings, they could do the following:
– Person A holds £50,000 of Premium Bonds in their name only
– Person B holds £50,000 of Premium Bonds in their name only
– Together they hold a combined total of £100,000 worth of Bonds
This higher limit for married couples and civil partners exists because NS&I understands that many people in long-term relationships pool their finances. The £100,000 limit allows them to jointly benefit from Premium Bonds winnings.
However, it is still important that an individual person cannot own more than £50,000. Otherwise, if say person A held £80,000 and person B held £50,000, together they would exceed the £100,000 combined limit.
Why are there limits in place?
The limits help ensure the Premium Bonds prize funds are shared evenly and someone does not gain an unfair advantage by owning a disproportionate value of Bonds.
With the odds of a £1 Bond winning being 24,500 to 1 each month, owning more Bonds means more chances to win. So the limits prevent anyone having an excessive number of entries in the prize draws.
The approximate chances of winning with different Premium Bonds holdings are:
| Premium Bonds held | Approx. odds of winning |
|---|---|
| £1,000 (£1,000 Bonds) | 1 in 2,450 |
| £10,000 (£10,000 Bonds) | 1 in 245 |
| £20,000 (£20,000 Bonds) | 1 in 122.5 |
| £30,000 (£30,000 Bonds) | 1 in 81 |
| £50,000 (max held by 1 person) | 1 in 49 |
| £100,000 (max held by a couple) | 1 in 24.5 |
As we can see, the more Premium Bonds owned, the greater the chances of winning a prize each month.
The odds are still long, but holding the maximum of £50,000 or £100,000 provides about a 50 and 25 times higher chance of winning compared to owning just £1,000 worth.
This demonstrates why limits are required, as otherwise someone owning millions of Bonds could dominate the prize draws.
Who do the limits apply to?
The Premium Bonds limits apply on a per person basis. Each named account holder can own up to £50,000 worth of Bonds.
So the rules are:
– Each individual can hold up to £50,000 worth of Premium Bonds
– A married couple or civil partners can combine their holdings up to £100,000
– Parents can buy Bonds for their children – each child can have up to £50,000 worth
– The limits apply no matter how many accounts you split your Bonds across
You cannot get around the limits by opening multiple NS&I accounts. The total value registered in your name counts towards your personal £50,000 allowance.
However, you can own Premium Bonds in joint names with someone else. For example, a parent could own £50,000 of Bonds themselves and jointly hold a further £50,000 with each of their two children. This would total £200,000 in Premium Bonds between the three family members.
The limits also apply per person, not per household. So an unmarried couple living together could each own up to £50,000 worth of Bonds, giving them £100,000 combined.
In summary, it is the total value registered in each named person’s details that matter, no matter how many accounts or joint holdings they are split across. Joint holdings with other eligible adults can help maximise the amount held.
Can you request an increase to the limits?
Unfortunately, the Premium Bonds limits cannot be increased above the standard thresholds.
The maximum that any one person can hold remains fixed at £50,000. For a married couple or civil partners it is £100,000. There is no way to request a higher limit.
Even if you wanted to purchase Premium Bonds as a gift for a spouse or partner, this would still count towards their personal £50,000 allowance once transferred into their name.
NS&I have to apply the limits consistently across all customers. Higher limits cannot be granted to any individual.
However, there are a few ways a couple could theoretically maximize their holdings up to the £100,000 threshold:
– Jointly purchasing Bonds using an NS&I investment account held in both their names
– Having one partner initially purchase £100,000 worth of Bonds, then transferring ownership of £50,000 worth into the other partner’s name
– One partner buying the full £100,000, then gifting £50,000 to the other partner to redeem and repurchase in their own name
But in all cases, the end result would still need to comply with the £50,000 individual and £100,000 combined limits. There is no way to extend these thresholds.
Ownership and eligibility rules
To hold Premium Bonds, there are a few ownership and eligibility rules to be aware of:
– You must be aged 16 or over to hold Bonds in your own name
– Bonds can be bought for children under 16, but they will be held by a parent or guardian until the child turns 16
– To jointly purchase Bonds, you must both be aged 16+ and UK residents
– You must be a UK resident to buy Premium Bonds for yourself
– Overseas residents can own existing Bonds but cannot buy more
– You cannot jointly hold Bonds with someone who lives overseas
– Companies, businesses, trusts and charities cannot hold Premium Bonds
So in summary, to maximise holdings as a couple you need to be married or in a civil partnership, both aged 16+, both living in the UK and purchasing the Bonds in your personal names rather than any business entity.
This ensures the limits are applied fairly to individual savers who are eligible to play the prize draws.
Tax implications
Any Premium Bonds winnings are completely tax-free. This applies regardless of how much you hold in Bonds or the frequency of your prizes.
This tax-free status comes from the fact Premium Bonds do not pay interest. Instead, you receive tax-free prizes that are eligible for all UK residents.
So even if you hold the maximum limit as an individual or married couple, all your prize money will remain tax-free. This includes the jackpot £1 million prize should you be lucky enough to win it!
The prize draws are not considered gambling from a tax perspective, so there is no liability to pay any tax on your Premium Bonds winnings no matter how much you hold.
Do joint account holders have separate limits?
Any Premium Bonds held jointly will count towards the personal limit of each named account holder.
For example, say a married couple set up a joint account and purchase £80,000 worth of Bonds, held in both their names. These Bonds would count as follows:
– £40,000 owned by person A (towards their £50,000 allowance)
– £40,000 owned by person B (towards their £50,000 allowance)
– Together they have reached their £100,000 combined limit
So joint holdings still count towards each person’s individual limit, even though they jointly own them. This prevents a couple building up excessive holdings by purely using joint accounts.
It is the total Bonds registered to each named person that matter, no matter how many sole or joint accounts they are held across.
The only exception is a parent-child registered account for a child under 16. A parent can hold an additional £50,000 in the child’s name without affecting the parent’s own £50,000 allowance. But once the child turns 16 these bonds would then start counting towards the child’s own limit.
Can you transfer bonds between holders?
It is possible to transfer Premium Bonds from one person to another. This may be done to maximize holdings for a married couple up to their joint £100,000 threshold.
Bonds can be transferred between any two eligible adults. To do this, the current holder completes a Premium Bonds Gift Form to authorize the transfer to the recipient.
The value transferred will start counting towards the new owner’s personal limit. So transfers need to be done carefully between couples to ensure both stay within their £50,000 allowance.
For example, person A could purchase the full £100,000 worth of Bonds jointly held with person B, then transfer £50,000 into person B’s sole name so they each hold £50,000.
The transfer process can take up to 4 weeks to complete. Bonds can continue earning prizes right up until the transfer date when winnings are redirected to the new owner.
So couples can utilize Bond transfers between each other as a way of maximizing their combined holdings up to the £100,000 joint limit.
How are winnings paid out on joint holdings?
For any Bonds held jointly, prize winnings will be split evenly between the account holders.
Each person will receive their share of the winnings directly into their nominated bank account. So if you held £50,000 jointly and won a £25 prize, you would each receive £12.50 paid into your respective accounts.
The exception is parent-child accounts where the parent’s bank details will receive any winnings until the child turns 16. At this point they can provide their own account details.
Joint holders do not have to share the same bank details. Any prizes earned will be split based on the account details NS&I hold for each person.
So couples can still receive their equal share of the winnings separately, even if the Bonds are jointly owned. This avoids disputes over prize money and makes it easy to split any earnings.
Is there a limit on the number of transactions?
There are no limits on the number of Premium Bonds transactions you can perform, such as:
– Buying new Bonds
– Selling existing Bonds
– Cashing in your Bonds
– Transferring Bonds to another holder
You can carry out as many of these transactions as you wish. The only restriction is on the total amount of Bonds held at any one time, based on the £50,000 individual and £100,000 joint limits.
So you could cash in your entire Bonds balance one month, then buy new Bonds the next month up to your limit. Or sell some Bonds to remain under your allowance if you have received a transfer from your spouse.
This flexibility makes it easy for couples to adjust their Premium Bonds holdings as required while remaining within the overall limits.
The only exception may be if you wanted to immediately buy back a large amount of Bonds you just sold. In this case, NS&I may restrict additional purchases briefly to prevent activity like money laundering. But generally, you can transact freely within your limits.
Are wins taxable if you go over the limit?
If your Premium Bonds balance exceeded the limit due to wins or interest accruing, this would not make any subsequent prizes taxable.
Your winnings would remain completely tax-free, even if you temporarily went over the personal or joint limits. The same tax exemptions would still apply.
NS&I allows customers a reasonable grace period to cash in any excess Bonds if the limits are exceeded. This ensures you do not lose your tax-free prize status or have to take any urgent action.
For example, say you held the maximum £50,000 Premium Bonds and then won a £25,000 jackpot prize. This would temporarily take you £25,000 over your limit. But NS&I would allow you time to cash in the excess amount while still treating any further wins as tax-free.
Exceeding your limit only becomes an issue if you deliberately keep purchasing more Bonds above the threshold over the long term. NS&I may then contact you and eventually restrict your account until action is taken to comply with the limits again.
How many times can you win?
There is no limit on the number of times your Premium Bonds can win prizes. Your Bonds will remain eligible to be entered into each monthly prize draw.
Statistically, the more Bonds you hold, the greater your chances of winning. But each Bond still only has a 24,500 to 1 chance of winning a prize in any single draw.
So over the long run, your win frequency will be in proportion to the total Bonds you own – for example twice as many wins if you hold the joint £100,000 limit compared to the individual £50,000 max.
In practice, big winners are extremely rare, and you may go many months without any wins at all. Holding more Bonds helps smooth out these fluctuations in your win rate.
You certainly won’t be excluded from the draws if you’ve been lucky enough to win recently or frequently. Each draw is completely independent, so past prizes never affect your future chances.
Over a typical 20 year investment horizon, you can expect an average return of around 1.4% from Premium Bonds prizes based on the current prize fund interest rate. So most prizes will just help counterbalance periods of no wins.
Are joint accounts allowed?
Married couples and civil partners can purchase Premium Bonds jointly in both their names. This allows them to combine their total holdings up to the joint £100,000 limit.
To set up a joint account, you need to specify both holders’ personal details when buying new Bonds or transferring existing Bonds from your sole name.
Joint accounts can be managed online or by post by either account holder. Both will be able to access details of the Bonds and manage the account. Instructions from one holder are taken as authority to act on behalf of you both.
Any co-owned Premium Bonds will then count equally towards both holders’ individual £50,000 allowance. The total value registered jointly and individually in each person’s name cannot exceed £50,000.
So joint accounts provide a convenient way for couples to maximise their holdings and manage their Bonds together in one place if they wish.
Joint holders will receive an equal share of any prize money won based on their account details NS&I hold for each individual. This allows joint ownership while keeping finances separate if needed.
Can you buy Premium Bonds as a gift?
You can purchase Premium Bonds as a gift for another person such as your spouse or partner. This can be a good way of transferring Bonds between you to maximize your joint holdings.
To gift Bonds, you simply buy them as normal in your own name via nsandi.com, then complete a Premium Bonds Gift Form to authorize the transfer to another person.
You need to specify the recipient’s name, date of birth and NS&I number if they already have Bonds registered.
Once completed, the Bonds will be transferred into the new owner’s name and begin counting towards their personal limit instead. Gifting takes around 4 weeks to fully process.
One thing to note is that any unclaimed prize money on the Bonds you are gifting will remain in your name. So it is best to check for any wins due to be paid out before initiating a gift transfer.
As long as both people are aged 16+ UK residents, you can gift Premium Bonds between eligible adults. This provides a handy way for couples to rearrange their holdings while maximizing the amount held jointly.
Would joint Premium Bonds affect means-tested benefits?
If you or your partner claim means-tested benefits such as Universal Credit, holding Premium Bonds jointly could affect your entitlement.
This is because means-tested benefits take into account your joint savings and investments when calculating eligibility. So while Bonds would be treated separately if held singly, in a joint account they become jointly owned capital.
The current capital cut-off threshold is £16,000 for Universal Credit. If jointly held savings exceed this amount, your benefits would be reduced. So holding the maximum £100,000 in joint Premium Bonds is highly likely to affect any means-tested benefits claimed.
However, Premium Bond winnings themselves do not count as income for means-tested benefits. Only the actual capital value of the Bonds held can impact eligibility.
So if receiving means-tested benefits, holding more than £16,000 jointly in Premium Bonds is inadvisable. Keeping accounts separate in each person’s name up to £16,000 each would be a better option. But obtaining specific benefit advice on your situation is always recommended.
Conclusion
In summary, the key points to keep in mind for married couples or civil partners are:
– Each person has an individual limit of £50,000 they can hold in Premium Bonds
– Jointly, a couple can own up to £100,000 between them
– Bonds can be purchased jointly or transferred into joint names
– Joint winnings are split equally between the holders
– There are no limits on buying, selling or transferring Bonds
– All prize money remains completely tax-free
So by purchasing Bonds both individually and jointly in their names, a married couple can maximize their Premium Bonds holdings up to £100,000 in total. This allows them to get the most from these popular savings while still ensuring the prize funds are shared fairly.
