Premium Bonds for Children: The Complete Guide for Parents & Grandparents
Over 77,000 new Premium Bonds accounts were opened for under-16s in 2025 alone, with young holders winning nearly £92 million in tax-free prizes — including 22 children who won between £100,000 and £1 million. Here's everything you need to know about buying Premium Bonds for children.
Who Can Buy Premium Bonds for a Child?
Anyone aged 16 or over can buy Premium Bonds for a child under 16. This includes parents, grandparents, aunts, uncles, and even family friends. This wasn't always the case — until 2019, only parents and grandparents could purchase them. NS&I expanded the rules following a 2018 Budget announcement, making Premium Bonds a much more accessible gift option.
There's one important requirement: a parent or legal guardian must be nominated as the "responsible person" who manages the bonds until the child turns 16. Even if a grandparent or family friend buys the bonds, the nominated parent or guardian is the one who receives prize notifications and manages the account.
How to Buy Premium Bonds for a Child
Parents and Legal Guardians
Parents can buy bonds for their own children through three channels: online at nsandi.com, by phone, or by post. Online is the fastest method. You'll need to register with NS&I first if you haven't already — registration can take 2–3 days for first-time customers while identity checks are completed.
Grandparents and Other Family Members
Grandparents and other relatives can buy online or by post. When buying for someone else's child, you'll need to nominate a parent or guardian as the responsible person and provide their details. The nominated person will need to verify their identity and the child's identity, which can take up to four weeks if documents need to be posted.
You can request an electronic or paper gift card to present to the child — a nice touch for birthdays and Christmas. The minimum purchase is £25, making Premium Bonds one of the most affordable financial gifts available.
💡 Gift Card Tip
When buying Premium Bonds as a gift online, you can request a gift card to print or email. This makes for a more tangible present, especially for younger children who might not appreciate a financial gift without something to unwrap.
How Children's Premium Bonds Work
Children's Premium Bonds work exactly the same as adult bonds. Each £1 bond is entered into the monthly ERNIE draw with odds of 22,000 to 1 of winning a prize. Prizes range from £25 to £1 million, and all prizes are completely tax-free.
The key differences are in management:
- Until age 16: The nominated parent or guardian manages the bonds, receives prize notifications, and can cash bonds in or buy more.
- At age 16: Ownership transfers to the child. NS&I contacts them to register for their own online access. They can then manage, buy, and cash in their own bonds.
- Multiple responsible persons: A child can have more than one nominated parent or guardian managing separate batches of bonds. Each responsible person has their own holder's number for the child.
Prize Options for Children's Bonds
When a child's bonds win a prize, the parent or guardian can choose how prizes are handled:
- Reinvest prizes: Prizes are automatically used to buy more bonds for the child — the most common choice and a great way to compound their holding over time (up to the £50,000 maximum).
- Pay to bank account: Prizes are paid into the parent or guardian's nominated bank account.
- Prize warrant (cheque): A cheque is sent to the registered address. This is the riskiest option as unclaimed cheques are a major reason prizes go unclaimed.
⚠️ Don't Let Children's Prizes Go Unclaimed
Many of the 2.7 million unclaimed Premium Bonds prizes (worth nearly £115 million) belong to bonds bought for children years ago. If you've moved house, changed banks, or simply forgotten about bonds bought for a child, use our Prize Checker to see if any prizes are waiting. Prizes never expire — some unclaimed prizes date back to 1957.
Are Premium Bonds Worth It for Children?
This is the question every parent and grandparent asks. The honest answer is: it depends on what you're trying to achieve.
The Case For
- 100% capital security: Backed by HM Treasury, the money is as safe as it gets. Unlike investments, children can't lose their principal.
- Tax-free prizes: All prizes are exempt from UK Income Tax and Capital Gains Tax, regardless of the child's or parent's tax position.
- Excitement factor: The monthly draw gives children a tangible connection to saving. Checking for prizes together can help build financial awareness.
- Flexible access: Unlike a Junior ISA, money in Premium Bonds can be withdrawn at any time. This means the parent retains control and can access the funds if needed.
- Easy gifting: The £25 minimum and gift card option make Premium Bonds one of the simplest financial gifts to give.
The Case Against
- No guaranteed return: Unlike a savings account, Premium Bonds pay no interest. Returns come solely from the prize draw, meaning a child could go months or even years without winning anything — especially with smaller holdings.
- Inflation risk: With the current prize fund rate at 3.60%, the effective return averages out near this level for large holdings but can be significantly lower for small amounts. With inflation around 2.5–3%, small holdings may effectively lose purchasing power over time.
- Better alternatives exist for guaranteed growth: Junior ISAs (cash or stocks and shares) and NS&I's own Junior ISA at 3.55% AER offer guaranteed returns that compound over time.
Premium Bonds vs Junior ISA for Children
| Feature | Premium Bonds | Junior Cash ISA | Junior Stocks & Shares ISA |
|---|---|---|---|
| Maximum per year | £50,000 total | £9,000/year | £9,000/year |
| Returns | Prize draw (3.60% rate) | Guaranteed interest | Investment returns (variable) |
| Tax treatment | Tax-free | Tax-free | Tax-free |
| Access before 18 | Anytime (parent controls) | Locked until 18 | Locked until 18 |
| Capital at risk? | No (HM Treasury backed) | No (FSCS protected) | Yes (investments can fall) |
| Who can contribute? | Anyone 16+ | Anyone | Anyone |
💡 The Best of Both Worlds
Many families use Premium Bonds alongside a Junior ISA. The ISA provides steady, guaranteed growth that's locked away until 18, while Premium Bonds offer accessible savings with the excitement of the monthly draw. For example, you might put birthday money into Premium Bonds (accessible and exciting) while regularly contributing to a Junior ISA for long-term growth.
What's the Best Amount for a Child?
The amount matters more for children's bonds than you might think. With odds of 22,000 to 1 per £1 bond, smaller holdings have a much lower chance of regular wins:
- £100–£500: Unlikely to win more than once or twice a year, if at all. Fine as a gift, but don't expect regular prizes.
- £500–£2,000: Occasional wins — enough to make prize-checking worthwhile but returns will be very variable.
- £2,000–£10,000: More consistent wins throughout the year. A reasonable holding for children being regularly topped up by grandparents.
- £10,000+: Regular monthly wins become likely. Use our Returns Calculator to see expected prizes at any amount.
Practical Tips for Parents and Grandparents
✅ Do
- Set prizes to reinvest automatically — this compounds the holding without any effort
- Keep the child's address and contact details updated with NS&I
- Check for unclaimed prizes regularly, especially if you've moved house
- Use electronic gift cards for birthdays to make the gift more tangible
- Consider Premium Bonds alongside (not instead of) a Junior ISA
❌ Don't
- Choose cheque payments — they're the main reason prizes go unclaimed
- Forget to tell the child about their bonds as they approach 16
- Expect regular wins with holdings under £1,000
- Put all of a child's savings into Premium Bonds if you want guaranteed growth
Frequently Asked Questions
Can I buy Premium Bonds for a child who lives abroad?
Yes, parents or legal guardians can buy Premium Bonds for a child living abroad, but the child must have a UK bank or building society account for prizes to be paid into. The initial application must be made by post.
What happens if a child wins the £1 million jackpot?
The same process applies as for adults — an Agent Million from NS&I will contact the nominated parent or guardian. The prize money is held for the child, with the parent or guardian managing it until the child turns 16. In 2025, 22 children won prizes of £100,000 or more, so it does happen.
Can I cash in a child's Premium Bonds?
Yes, the nominated parent or guardian can cash in some or all of a child's bonds at any time. The money is paid into the parent or guardian's nominated bank account. You can do this online (even without a registered account) using the child's holder's number.
Is there a minimum age to hold Premium Bonds?
No — Premium Bonds can be bought for a child from birth. Many parents and grandparents buy them as newborn gifts or christening presents.
Do children's bonds have the same odds as adult bonds?
Absolutely. Every £1 bond has identical odds of 22,000 to 1 in each monthly draw, regardless of the holder's age or when the bond was purchased.
Calculate Your Child's Expected Returns
See how much a child's Premium Bonds holding could realistically win over time.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Premium Bonds returns are variable and past performance doesn't guarantee future results. Consider your family's financial circumstances and consult a financial advisor for personalized guidance. Information accurate as of February 2026.