Prize-Linked Savings Explained

Prize-linked savings is a concept that combines saving with the possibility of receiving a prize.

Instead of earning only a conventional rate of interest or return, participants may have the opportunity to receive prizes linked to the saving structure.

The attraction is straightforward:

You save, while also having the possibility of winning something significant.

Traditional saving can sometimes feel slow.

You put money away.

You check the balance.

You wait.

For some people, the possibility of a prize can make the habit feel more engaging.

It adds an element of anticipation without requiring saving to become purely about the prize.

This isn't a hypothetical idea — prize-linked savings has a long track record in the UK. NS&I's Premium Bonds are the best-known example, launched all the way back in 1956: instead of interest, every £1 bond goes into a monthly prize draw run by ERNIE, NS&I's random number generator, with prizes from £25 up to a £1 million jackpot. Over 24 million people hold them today.

It's not just a government-scale idea, either. PrizeSaver is a real, still-running example built by a network of UK credit unions: every £1 in your account at month-end earns one entry into the following month's prize draw. It began as a government-backed pilot in 2019 and now runs independently. Both examples show the same underlying pattern: save first, keep what's yours, and get entered into a prize draw instead of relying purely on a fixed interest rate.

The important distinction is the treatment of the saving component.

A prize-linked model can be designed so that participants retain their underlying savings while having an additional opportunity to win.

That is very different from simply staking money on an outcome.

The exact structure varies between products and providers, which is why it's important to understand the specific terms of any scheme before participating.

The Twenty takes inspiration from the broader idea of combining saving and opportunity.

Under the current model, members contribute £20 each month, minimum, with £15 of that allocated to their personal Vault and £5 unlocking your weekly Skill Tests, helping cover the cost of running your Vault account and supporting the weekly prize pool. Contribute more than £20, and the extra goes entirely into your Vault — the split only applies to the first £20.

The Twenty then adds a skill-based element to its competition.

Rather than presenting the experience simply as a random draw, The Twenty is designed around qualification and skill.

For the full mechanics of the £20 minimum, the Vault and the weekly Skill Test, see how The Twenty works, or read our in-depth prize-linked savings UK guide.

Traditional savings generally focus on building a balance and potentially receiving interest or another return.

Prize-linked savings introduce the possibility of prizes into the experience.

The Twenty aims to combine elements of both ideas:

A saving component that remains part of your financial journey, alongside the opportunity to compete for a significant prize.

It's worth weighing both sides honestly rather than only the appeal.

• Advantage: with Premium Bonds your whole stake is always there to withdraw, and with The Twenty your £15 Vault portion is too — not winning never touches your savings balance.
• Advantage: it can make consistent saving feel more engaging than watching a low interest rate accrue, which is part of why the model has lasted in the UK for decades.
• Limitation: you give up a guaranteed rate of return. Most savers, in most periods, won't win a prize — though the underlying balance for Premium Bonds and The Twenty's £15 Vault portion is never lost as a result.
• Limitation: with The Twenty, the £5 monthly allocation is a genuine cost. It's spent on your weekly Skill Test access whether or not you qualify or win, and isn't refunded — so The Twenty is a hybrid of saving and a skill competition, not a pure prize-linked savings account like Premium Bonds.
• Limitation: prize-linked products are only as good as the protection behind them — always check how a specific provider protects your money, including The Twenty's own current, pending regulatory position.

Not necessarily.

The distinction depends on how a particular product is structured and the applicable legal and regulatory framework.

That's why The Twenty should always be understood according to its actual terms rather than simply being described using a label.

The Twenty is designed around a saving component and a skill-based competition.

The objective is to create an experience where members can build savings while also having an opportunity to compete.

Whenever money and prizes are involved, people deserve clear information.

That means understanding:

• How much you contribute
• Where your money goes
• What remains yours
• How prizes are funded
• How qualification works
• What happens if you don't win
• How withdrawals work
• What fees may apply
• Who operates the relevant services
• What rules and terms apply

The Twenty's aim is to make these points straightforward rather than hiding them behind complicated financial language.

Saving should be understandable.

And so should the opportunity that comes with it.

• Is prize-linked saving the same as gambling? A pure prize-linked savings product like Premium Bonds keeps your entire stake safe — only the interest you might have earned is exchanged for a chance at a prize. The Twenty is a hybrid: your £15 Vault portion works like savings, but the £5 monthly allocation is spent on Skill Test access and the cost of running your Vault account, and isn't refunded whether or not you qualify or win. Whether any specific product counts as gambling depends on its precise structure and how the legal requirements are met, not on how it's labelled — see our Regulation page for our current position.
• Do I lose money if I never win? Not from your savings: your £15 monthly Vault contribution is always yours to withdraw, whether or not you ever qualify for or win a weekly prize. But the £5 monthly allocation is a genuine cost — it unlocks one Skill Test opportunity in each weekly cycle that month and helps cover the cost of running your Vault account, and isn't refunded if you don't qualify or win.
• How is The Twenty different from Premium Bonds? Premium Bonds select winners entirely at random. The Twenty's weekly prize pool is only open to members who've earned qualification through a skill test — performance decides who gets a shot, not a random draw.
• Are prizes from prize-linked savings taxed? Premium Bonds prizes are tax-free, by NS&I's own published terms. The Twenty's own tax treatment will be confirmed and published as part of our final terms ahead of public launch.

Join The Twenty waitlist to be notified when sign-ups open.

• NS&I — Premium Bonds (nsandi.com/premium-bonds)
• PrizeSaver — UK credit union prize-linked savings (prizesaver.co.uk)