Almost every British client who walks through our door owns Premium Bonds. And almost every one of them asks the same nervous question: “Can I still keep them now I live in Portugal?”

It is a fair worry. Premium Bonds are about as British as a queue and a cup of tea, and the rules around holding them from abroad are genuinely confusing. In my experience working with expats across the Algarve, the bigger surprise is usually not whether you can keep them, but how Portugal treats the prizes once you are tax resident here. Let us clear all of that up.

What Premium Bonds Actually Are (And Why So Many Expats Hold Them)

Premium Bonds are a savings product run by National Savings & Investments (NS&I), which is backed by HM Treasury. That government backing is the headline attraction: your capital is as safe as it gets, with no upper limit on protection in the way the usual £85,000 bank guarantee works.

Instead of paying interest, every £1 bond is entered into a monthly prize draw. Prizes range from £25 up to £1 million, and crucially they are completely tax-free in the UK. You can hold between £25 and £50,000 in total.

For a generation of British savers, they have been the comfortable, no-risk corner of the portfolio. So it is no shock that people are reluctant to cash them in just because they have swapped Surrey for the Silver Coast. The instinct to keep them is sound, but it needs a few important caveats once you cross the border.

Can You Keep Premium Bonds If You Live in Portugal?

The short answer is yes. NS&I does not force you to cash in your existing Premium Bonds simply because you have moved overseas. You can hold on to them, stay in every monthly draw, and keep winning prizes exactly as before.

There are, however, three things you genuinely need to do or be aware of:

1. Tell NS&I you have moved. You are required to keep your contact and address details up to date. Letting them know you now live in Portugal is part of holding the product correctly.
2. You usually cannot buy more. Buying new Premium Bonds typically requires you to be a UK resident. Once you are resident in Portugal, the door to topping up is generally closed, even though you can keep what you already hold.
3. A handful of countries cause problems. Local financial rules in some jurisdictions make it difficult for NS&I to deal with overseas holders. Portugal is not generally one of the problem countries, but it is always worth confirming your specific situation directly with NS&I.

So the bonds you already own can stay. What you lose is the ability to keep feeding the pot. That alone is a good reason to think about whether they still deserve their place in your plan, which we will come to shortly.

How NS&I Pays Prizes When You Live Abroad

This is where a lot of expats get unnecessarily anxious. You do not need a UK address or even a UK bank account to keep winning. NS&I can pay prizes in a couple of ways that work perfectly well from Portugal.

The simplest option is to have prizes automatically reinvested into more bonds, up to your £50,000 limit. This sidesteps the “no new purchases” issue because reinvested prizes are treated differently from fresh purchases. The alternative is to have prizes paid directly into a nominated bank account.

The practical headache is usually currency. If prizes land in a UK account in sterling, you still have to get that money to Portugal and convert it to euros at some point. For small, occasional £25 wins this barely matters. If you are lucky enough to land a larger prize, using a specialist currency service rather than a high-street bank can save a surprising amount on the exchange.

The Tax Question: Why “Tax-Free” Stops at the UK Border

This is the single most important part of the article, and the bit most people get wrong. The tax-free status of Premium Bond prizes is a UK rule. It is a feature of the UK tax system, and it does not automatically travel with you when you become tax resident somewhere else.

Portugal taxes its residents on their worldwide income and gains. That means a prize which HMRC happily ignores may still need to be considered under Portuguese rules, because Portugal does not have an equivalent “Premium Bond prizes are exempt” provision built into its system.

I want to be honest about the limits of a blog post here: the precise Portuguese treatment of a Premium Bond prize is a genuinely technical area, it can depend on how the prize is characterised, and it is exactly the sort of thing you should confirm with a qualified Portuguese accountant or adviser for your own circumstances. What I can say clearly is this: do not assume the UK tax-free badge protects you in Portugal. The safe planning assumption is that prizes are reportable here, and you should get your specific position checked rather than guessed.

If you are on the Non-Habitual Residence regime or its successor, the picture can be different again, but NHR was never a blanket “everything foreign is tax-free” arrangement, and people are often caught out by assuming it covers more than it does. Treat your Premium Bonds as part of your overall Portuguese tax position, not as a special exempt pot.

Are Premium Bonds Still Worth Holding as an Expat?

Once you strip away the emotional attachment, it is worth looking at them coldly. The “prize fund rate” is NS&I’s way of expressing the average return across all bonds, but averages hide a lot. With a modest holding, it is entirely possible to go months winning nothing at all, because the eye-catching big prizes pull the average up while most holders get very little.

Compare that to what is available elsewhere. A UK savings account, a money market fund, short-dated gilts, or a properly structured portfolio can all offer a more predictable return. We looked at the case for fixed income in our guide to building a resilient expat portfolio, and the same logic applies here: certainty of return matters more as you move into the drawdown phase of life.

None of this means you must cash them in. There are good reasons to keep some: the capital is rock solid, access is quick, and there is a small but real chance of a life-changing prize. The point is to hold them deliberately, as a considered slice of your cash reserve, rather than out of habit or because moving them feels like effort.

How Premium Bonds Fit Into Your Wider Plan

Here is the framing I use with clients. Premium Bonds are a cash-equivalent holding. They should be measured against your other cash and low-risk options, not against your growth investments. If you are holding the full £50,000 in bonds while also keeping large cash balances, you may simply have too much money doing very little.

For most expats, the right question is not “Premium Bonds: yes or no?” but “how much of my wealth should sit in safe, accessible cash, and is this the best home for that slice?” That answer changes depending on your age, your income needs, your currency exposure, and your tax residency. It is rarely a one-size-fits-all call.

Frequently Asked Questions

Do I have to cash in my Premium Bonds when I move to Portugal?

No. You can keep your existing Premium Bonds and stay in every monthly prize draw. You generally just cannot buy new ones once you are no longer a UK resident, and you should update NS&I with your overseas address.

Are Premium Bond prizes still tax-free if I live in Portugal?

They are tax-free under UK rules, but that exemption is a UK feature and does not automatically apply in Portugal. As a Portuguese tax resident you are taxed on worldwide income, so you should assume prizes may be reportable here and confirm the exact treatment with a Portuguese tax professional.

Can I still win and receive prizes from abroad?

Yes. NS&I can either reinvest your prizes into more bonds up to the £50,000 limit or pay them to a nominated bank account. You do not need to keep a UK address to keep winning.

Should I keep my Premium Bonds or invest the money elsewhere?

That depends on your wider plan. Premium Bonds are best viewed as a cash-equivalent holding, so compare them with your other cash and low-risk options. For larger balances, a structured approach often gives a more predictable return, but the capital security and instant access of bonds still suit some people.

What to Do Next

Premium Bonds can absolutely stay in your life after the move to Portugal. The key takeaways: you can keep them, you usually cannot add to them, and the UK tax-free status should not be assumed to carry over here. The real work is deciding how much of your wealth should sit in safe cash at all.

If you would like to discuss how your Premium Bonds and wider savings fit into your Portuguese tax and retirement picture, get in touch with our team. We specialise in helping UK expats in Portugal make the most of their pensions and investments. You can read more about how we work on our main site, and you can always check the official rules directly with NS&I and gov.uk.

Matthew Renier is a Chartered Financial Adviser at Arthur Browns Wealth Management, based in the Algarve, Portugal. He has many years of experience helping British expats manage their pensions and financial planning across borders. This article is general information, not personal advice; please seek advice tailored to your own circumstances.

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