Martin Lewis says an age group that often has Premium Bonds aren't well suited to them, suggesting alternative forms of saving. Premium Bonds are a savings account offered by National Savings & Investments (NS&I), a treasury-backed savings institution. Instead of interest, Premium Bond holders have the chance to win a range of tax free prizes ranging from £25 up to £1million.

Each bond gets put into a monthly, randomly generated prize draw, with NS&I's Electronic Random Number Indicator Equipment (known as ERNIE) generating the winning numbers. According to the NS&I, there are odds of 21,000 to 1 for every £1 Bond in the monthly prize draw, variable. Premium Bonds have an annual prize fund rate of 4.35%, variable, representing the mean average return across all bond holders. Martin Lewis discussed the savings account in a clip on X promoting a longer discussion on The Martin Lewis Podcast, and suggested they may not always be the best option, especially if you're getting them for children.

"They're the UK's single most popular form of savings, with over £136billion in them," the MoneySavingExpert.com founder said. "Yet the irony of these bonds for me is we tend to give them to the people they're least suited for.

Mr Lewis argues that while the current prize fund rate of 4.35% "sounds good", "actually, most people with typical luck will win less than that".

"And you can earn more just in a standard top bog standard easy access savings." You can currently find deals ranging from around 4.5% AER up to as much as 5% LemFi's Instant Access Savings Account (including a short term bonuses offer).

"Who are premium bonds good for? Well, mainly people are going to have nearly maximum, so the closer to winning that prize fund rate," He added.

"And those who are already going to pay tax on other savings, they've used up their cash ISAs, they've used up their savings allowances, where the tax-free nature of the bonds comes into play."

However the personal finance expert said they're not particularly good for people "you're giving small amounts to, who don't pay tax, like children", despite the fact that children are often given them.

"Now I know somepeople think, 'yeah, but they're safe because it's NSNI (National Savings as was), it's government backed,'" he continued.

"But the maximum you can put in Premium Bonds is £50,000, and these days all UK regulated savings are protected up to £120,000 per person, per financial institution."