Premium Bond paper prize cheques to be scrapped

At the moment, some Premium Bond prizes are paid out in the form of a paper 'warrant', like a cheque – though customers can also choose to have their prizes paid straight into their bank account, or reinvested to buy more Premium Bonds.

Not all warrants end up being cashed in, and there are currently over 1.8 million unclaimed Premium Bond prizes worth over £67 million. NS&I, which runs Premium Bonds, says that paying customers by bank transfer instead will help stop future prizes going unclaimed, as well as being cheaper and more environmentally friendly than sending warrants by post.

NS&I will start moving affected customers over to bank transfer prize payments from December 2020, and paper warrants are set to be phased out completely by March 2021. 

So if you currently receive Premium Bond prizes in warrant form, you'll need to make sure NS&I has correct details for you so you can carry on getting your prizes seamlessly. 

For more on how Premium Bonds work – and whether they're worth it – see our Premium Bonds guide.

I currently get paper prizes – what do I need to do?

NS&I says that almost three quarters of prizes paid out in September 2020 were paid directly into bank accounts or reinvested in Premium Bonds.

But if you still receive paper warrants when you win a prize, you'll need to act now to make sure the process is as easy as possible once they're phased out. Here's what to do:

• Make sure you're registered for NS&I's online and phone services. You can do this online, or those without internet access can also phone 08085 007 007 to register or provide NS&I with their bank details.

• Choose how you want your prizes to be paid. You can log in to your account and choose to have your prizes paid directly to your bank account or reinvested (up to the max of £50,000) by going to 'Your profile' and selecting 'Your prize options'. You'll need to input your up-to-date UK bank details as well as an email address or UK mobile number so you can be notified about any prizes.

If you don't provide NS&I with your details and later win a Premium Bond prize, instead of a prize warrant you'll be sent a letter with details about how to arrange the payment of your prize.

Remember, NS&I will NEVER phone you and ask for your bank details, so if this happens to you it may be a scam.

What are Premium Bonds?

Premium Bonds are effectively a savings account you can put money into, where instead of being paid interest, tax-free prizes are awarded in a monthly prize draw – meaning there's no guarantee you'll get any return on your money. Prizes range from £25 to a whopping £1 million.

The nearest thing Premium Bonds have to an interest rate is their annual prize rate, which is currently 1.4% (it was set to be reduced to 1.3% earlier this year, but NS&I cancelled the cut to support savers during the coronavirus pandemic). That's a benchmark of the 'average' return you'll get for your money – though in reality, there's no guarantee you'll win anything at all.

What it really means is that for every £100 invested in Premium Bonds across the market, £1.40 is paid out every year in prizes. Yet the prizes include two £1 million payouts, and many prizes for £100s or £1,000s – meaning lots of people have to win far less than this prize rate.

See our Premium Bonds guide for full info on how it works.

How do I check if I've an unclaimed prize?

While NS&I is hoping its switch to bank transfers will stop prizes going unclaimed, there are already £1,000,000s in unclaimed prizes waiting to be cashed in.

And there's no time limit to claims, so you can go back as far as you like.

If you think you might have an unclaimed prize, for example because you have an old or lost warrant, the best way to check depends on what info you have about your Premium Bond account – confusingly, you'll have been given both a Premium Bond holder's number AND an NS&I number:

• If you know your Premium Bond holder's number... you can go to the NS&I website or download its prize checker app. Enter your holder's number and it'll tell you if you've any unclaimed prizes.

• If you don't know your holder's number, but have your NS&I number... you can use that number – which you'll find on any letters from NS&I – as well as your surname and password to log in to NS&I online and find your holder's number on the 'account details' page. NS&I's prize checker app also accepts your NS&I number.

• If you don't know your holder's number or account number... you can phone NS&I on 08085 007 007 or write to it and ask for a replacement bond record to be sent to you. You should give as much detail as you can, for example your full name, address details, when and where you bought your Premium Bonds and how much they're worth.

  Alternatively, you can use NS&I's tracing service or the My Lost Account website, both of which can track down your Premium Bond details. They ask you to fill out info about yourself, including your name, address, an estimate of how many Premium Bonds you hold and how long you've held them.

How to claim your prize if you've won

If you find you do have an unclaimed prize, you can ring up NS&I if you're registered for online and phone services. Alternatively, you'll need to write to NS&I to tell it at: NS&I, Glasgow, G58 1SB. Give as much information as you can, including:

• Holder's number.

• Current name.

• Any previous names.

• Current address.

• Any previous addresses where bonds may have been registered.

• Signature.

Currently, prizes will be sent to your home address as a warrant. But NS&I has confirmed that once warrants are phased out, you'll be able to have historic prizes paid into your bank account when you claim them – though you'll need to contact NS&I to provide your bank details if it doesn't have them already.