Andy...no reputable Financial Adviser would recommend Premium Bonds, unless you had used up all the other tax-efficient methods of saving and investing first. The golden rule when assessing risk is never to gamble more than you can afford to lose.
If £40,000 was the ONLY cash you had, then to put it all in Premium Bonds, when NS+I have other products to offer would be reckless.
On the other hand, if you were a millionaire, or a lottery winner, then it would be daft NOT to put the maximum into Premium Bonds !