HMRC could sting UK households who have Premium Bonds with unwanted tax bills. NS&I Premium Bonds are tax-free - and this is a key perk of the financial offering, which is administered by the Treasury-backed financial provider.

But Aaron Peake, personal finance expert at free credit score service CredAbility, warned: "The prize itself is always tax free, but how you use it afterwards could create a tax bill down the line."

Mr Peake said: "If you stick your winnings into a savings account, then the interest you earn could become taxable once you’ve used up your allowance. For example, if you’ve already maxed out your personal savings allowance for the year, any extra interest from banking your Premium Bonds prize would be taxable."

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