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History of Premium Bonds

• Facts and figures
• ERNIE FAQs

Premium Savings Bonds were officially launched by Harold MacMillan, Chancellor of the Exchequer, in his 1956 budget. Savers were offered a chance to participate in a lottery for dividends (monthly prize draw). The maximum holding was £500.

There was much opposition to the introduction of Premium Bonds from all parties in the House of Commons and from many sections of society.

In a House of Commons debate on 18 June 1956, Harold Wilson MP, said: "Now Britain's strength, freedom and solvency apparently depends on the proceeds of a squalid raffle."

He also said: "I still believe that the decision of the Chancellor to have recourse to the proposals in this day and age is repugnant and degrading. That is why, in our view, the Clause [proposal for introducing Premium Bonds] represents not so much a personal, as a national, demoralisation." Premium Bonds were first launched on 1 November 1956.

The first Premium Bond was bought by the then Lord Mayor of London, Sir Cuthbert Ackroyd, from Lord Mackintosh, chairman of the National Savings Committee, at a brief ceremony in front of the Royal Exchange. Dignitaries from the UK's major cities also held similar ceremonies. Some protested, including the Lord Provost of Glasgow who refused to take part, as did two Post Office employees who refused to handle them for religious reasons.

The first draw took place on 2 June 1957 and was started by the then Postmaster General, Ernest Marples.  Pictures from the first prize draw can be found in the photo library.

In 1957, ERNIE (Electronic Random Number Indicator Equipment), the machine which picks the winning numbers, took 10 days to carry out the first draw. It now takes a mere two and-a-half. New models were required in 1973 and again in 1988 to cope with the increasing amount of Premium Bond numbers. The latest ERNIE was built in 2004, although the winning numbers are still generated in exactly the same way.

The £1 million jackpot was introduced in April 1994. Since then, a second £1 million jackpot was introduced in August 2005.  In addition sales by phone, online and standing order have been introduced and in May 2003 the maximum investment was increased to £30,000.  This has meant that sales of Premium Bonds have been greater in the last five years than the previous 45 put together, demonstrating that Premium Bonds are more popular and relevant than ever.

To mark the 50th anniversary of Premium Bonds NS&I held two celebratory prize draws in December 2006 and June 2007, with five chances to win the £1 million jackpot.  For a more detailed history or further information contact the media team.