50th anniversary of first draw

Premium Bonds celebrated the 50th anniversary of the first prize draw in June 2007.
Premium Bonds first went on sale in November 1956.

1957 - 2007

1st June 1957

1st June 2007

Top Prize

£1,000

£1 million

Total Value of Prizes

£969,750

£118,058,850

Number of Prizes

23,142

1,494,415

Number of Bonds in the draw
49 million

35.4 billion

Number of Bond Holders

6 million

23.7 million

Odds of winning a prize

2,095 -1

24,000-1

Prize Fund Rate

4.0% tax-free

3.95% tax-free (3.80% in July)

Maximum Investment

£500

£30,000

Minimum Investment

£1

£100

Machine

ERNIE 1

ERNIE 4

Machine Size/Speed

1.5 tonnes,

2,000 numbers per hour

10kg

1 million numbers per hour

Time Taken for Draw if ERNIE 1 still running today

29 hours (first draw)

77 days

Places to Buy

Post Office®, Post

On-line, telephone, Post Office®, Post

Time Before Entered Into Draw

Six months

One month

Location

Lytham St. Annes

Blackpool

Average Male Weekly Wage

£12.58

£526.00

Average Female Weekly Wage

£6.49

£320.00

Pint of Beer

£0.07

£2.65

Average house

£2,021

£176,000

Austin Healey Sprite (1957),/ Ford KA (2007)

£669

£7,095

Key Facts

23.7 million people hold Premium Bonds, worth over £36 billion.
c36 billion eligible Premium Bonds go into each monthly draw.
172 million prizes worth over £11 billion have been awarded since the first draw.
The prizes are picked by ERNIE 4, the Electronic Random Number Indicator Equipment based in Blackpool. ERNIE regularly receives birthday, Valentines and Christmas cards.
Sales of £9 billion were achieved between May 2006 and April 2007, a record.
In May 2008, 1.6 million prizes were awarded worth over £102 million.
If all the monthly prizes were placed end to end, they would stretch from London to Sheffield.
The average age of a Premium Bond holder is 45.
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History

The Four Premium Bonds Era’s

Premium Bonds have effectively gone through four phases:-

Phase 1 : Initial Launch Period (1956-1961)

The initial launch in the 1950s received a huge wave of coverage and attention which continued into the early 60s. Celebrities posed with ERNIE and draws were televised. By 1961, 13 million people had invested £309 million.

Phase 2 : Gradual Growth (1961-1993)

Interest in Premium Bonds grew more gradually during this period. By the end of 1993, 23 million people held £3 billion.

Phase 3 : Jackpot era (1994-2001)

National Savings and Investments (NS&I) launched a £1 million top prize in April 1994 and the spotlight turned again to Premium Bonds. In addition, more emphasis was placed on the ‘savings’ element rather than being seen as a lottery. This can be seen by the rise in the average holding from £38 in 1966 to £736 in 2001. By 2001, the number of Premium Bond holders fell to 22.9 million but the amount invested had reached £17 billion.

Phase 4 : Renaissance (2002 onwards)

NS&I took Premium Bonds into the 21st Century and developed it into one of the most popular savings schemes today by making Premium Bonds easier to buy (telephone, internet, standing order), increasing the amount that could be invested (£30,000) and introducing an extra jackpot prize. In addition, because of stock market fluctuations and the relatively low rate of interest available on mainstream savings accounts, investors have been looking for a safe home for some of their money. By May 2008, the number of Premium Bonds holders had increased to 23 million, roughly one third of the population, with £36 billion invested.

Launch (1st November 1956)

Premium Savings Bonds were launched officially by Rt. Hon. Macmillan, Chancellor of the Exchequer, on 1 November 1956, following the announcement he made on the scheme in his budget statement on 17 April 1956. The then Lord Mayor of London, Alderman Sir Cuthbert Ackroyd, bought the first Premium Bond from Postmaster-General, Dr. Charles Hill, at a brief ceremony in front of the Royal Exchange, Threadneedle Street, the City of London.

Rt. Hon. Harold Macmillan said “This is an encouragement to the practice of saving and thrift by those members of the community who are not attracted by the reward of interest, but do respond to the incentive of fortune. My object is to invite people to save for the chance of a prize.”

The Shadow Chancellor, Harold Wilson, said in response “Now Britain’s strength, freedom and solvency apparently depends on the proceeds of a squalid raffle.”

First Draw (1st June 1957)

The first draw started at 9.15 a.m. on Saturday 1 June 1957 in the Bond Headquarters at Moorland Road in Lytham St Annes. It finished at 4pm on Monday 3 June 1957, longer than the 30 hours needed, because ERNIE 1 was stopped during the draw to accommodate the needs of the media and to allow the engineers to get some sleep.
Since the late seventies, the draw has taken place at Marton, Blackpool
The draw was started by Ernest Marples, the Postmaster-General, who pressed an ivory switch to set ERNIE to work. Sixteen minutes later, ERNIE produced the first winning number.
The draw was televised live on TV and radio and Lord Mackintosh, Chairman of the National Savings Committee, announced the winning number.
The first winning number was IFK341150. The draw ended on 4pm on Monday 3 June after 60,000 numbers were produced to arrive at 23,142 winners. Five of the £1,000 winners were people who had bought just one single £1 Premium Bond. The draw was checked by Post Office mathematicians and statisticians and they were satisfied that the draw was random. There were 49 million Bonds eligible for the first draw.
Total prize money on 1 June 1957 was £969,750. This was made up of 23,142 prizes and the split was: 96 x £1,000; 192 x £500; 384 x £250; 960 x £100; 1,920 x £50; 19,590 x £25

Year	Investment	Customers	Prizes	Prize Value
	£ million	million	‘000 per month	£ million per month
1957	70	6	23	0.97
1962	350	13	35	1.2
1967	590	16	59	2.1
1972	930	20	86	3.5
1977	1,220	22	109	5.5
1982	1,510	26	101	8.5
1987	1,950	24.3	171	12.1
1992	2,470	23.4	215	12.8
1997	8,600	23.1	434	32.7
2002	17,670	22.8	598	34.1
2007	36,210	23.7	1,494	118.0

Figures for June of each year

Prizes

Currently there are 2 x £1 million pound jackpots prizes each month. In December 2006 and June 2007, to celebrate the 50th anniversary of Premium Bonds, three extra £1 million prizes were awarded.
210 people have become Premium Bond millionaires (including May 2008).
The winners of the monthly jackpot are told in person by Agent Millions – M1 and M2.
The Premium Bond prize fund rate is 3.40% p.a. tax-free
The odds of each £1 Bond winning a prize are fixed - currently at 22,000-1.
With average luck, a Premium Bond holder with £30,000 invested could expect to win 16 prizes per year.
Every eligible Bond has a separate and equal chance of winning a prize, irrespective or when or where it was bought. For instance, a £3 Premium Bond bought in 1959 scooped the £1 million jackpot in July 2004.
All Premium Bonds prizes are tax-free.
There are currently over 500,000 unclaimed Premium Bond prizes worth £30 million.
There is no time limit to claim a prize.
You can check any unclaimed prizes and prizes won in the last six months by using the “Have you won?” facility on www.nsandi.com.
The largest unclaimed prize is for £25,000. We believe the winner migrated to Canada, but all efforts to trace them have failed.

How to buy

The maximum investment is £30,000 and the minimum is now £100. (Those buying by standing order can make investments of a minimum of £50 once they have made an initial purchase of £100).
Premium Bonds can be bought online at www.nsandi.com, by telephone on 0500 007 007, by post, by monthly standing order and over the counter at Post Office® branches.

ERNIE

The present ERNIE is the fourth version and was unveiled in August 2004 at the Science Museum.
The ERNIE machines (ERNIE stands for Electronic Random Number Indicator Equipment) are central to the whole concept of Premium Bonds as ‘he’ randomly produces all the winning numbers.
The general process completed by each ERNIE has been the same across all generations but due to the continuous advances in technology, each ERNIE has been replaced by faster and smaller models. If ERNIE 1 was still being used today, he would take 75 days to complete a draw, compared to the three hours taken by ERNIE 4. Each ERNIE has lasted for approximately 16 years.
ERNIE 1 was built by WWII code breakers and was the first such machine of its type in the world and was one of the first examples of an explicit commercial use of this type of technology. It cost £25,000 to build.
The randomness of the draw is independently verified by the Government Actuary’s Department (GAD).

	ERNIE 1	ERNIE 2	ERNIE 3	ERNIE 4
Built	PO Research Dept	Plessey	LogicaCMG	LogicaCMG
Year	1957	1973	1988	2004
Prizes*	23,142	90,338	191,639	788,548
Prize Value*	£969,750	£3.7 million	£11.5 million	£47.3 million
Investment in Premium Bonds*	£49 million	£969 million	£2.2 billion	£25 billion
Weight	1,500kg	760kg	15kg	10kg
Time taken to run draw (at end of machine’s life)	10 days (1973)	5.5 hours (1988)	5.5 hours (2004)	3.5hrs**
Processing speed (per hour)	2,000	65,000	330,000	1 million

*At time of introduction
** current speed

Premium Bonds - record of main changes

1916	Chancellor Reginald McKenna MP vetoes the introduction of Premium Bonds.
17 April 1956	Chancellor of the Exchequer, Rt. Hon. Harold Macmillan MP announces his intention to introduce Premium Bonds.
25th July 1956	Demonstration model of ERNIE 1 was unveiled by Dr Charles Hill, the Postmaster General
1 November 1956	Premium Bonds launched at Trafalgar Square. Bonds become eligible after held for six months. Top prize £1,000.
1 June 1957	First Prize Draw - ERNIE started by Postmaster General, Ernest Marples in Blackpool.
1969	National Savings splits from the Post Office to become a department in its right.
1 August 1971	Introduction of a single monthly top prize of £50,000.
5 February 1972	£1 Premium Bond withdrawn from sale. Minimum purchase £2
February 1973	ERNIE II introduced
2 June 1976	Introduction of Premium Bond holders Numbers.
1 November 1976	Top monthly prize raised to £100,000. Minimum purchase £5.
1978	National Savings moves to Marton
21 April 1980	Maximum Holding now £10,000.
1 July 1980	New monthly prize of £250,000.
October 1988	ERNIE III introduced.
1 July 1989	Minimum purchase level for savers over 16 raised to £100. Multiple purchases to be in amounts of £10.
1 February 1993	Minimum purchase £100 for all savers introduced
13 April 1993	Maximum holding increased to £20,000
1 April 1994	New monthly jackpot prize of £1 million
1 May 1995	Introduction of facility for all automatic reinvestment of prizes
2 August 1998	Premium Bond prize-checker introduced on website to help Bond holders trace unclaimed prizes. Premium Bonds forms can now be downloaded
9 September 2002	Website (www.nsandi.com) allows Bond holders to check for prizes won in last six months
March 2003	100 millionth prize awarded
12 May 2003	Maximum investment raised to £30,000. Then record sales of £1.1 bn in May 2003 achieved
April 2004	ERNIE 4 used for the first time. Launched to the public at Science Museum on 17 August 2004, alongside three previous ERNIE’s
July 2004	Premium Bonds available by telephone on 0500 007 007
October 2004	Premium Bonds can be bought by Standing Order for existing customers. Minimum purchase is £50 after initial purchase of £100
January 2005	Premium Bonds can be bought on NS&I website All monthly prizes on website
August 2005	Additional jackpot prize of £1 million introduced
September 2006	PB50th celebrations launched at BBC Proms in the Park (NS&I sponsors)
October 2006	Record sales of £2.2 billion achieved
1st November 2006	50th year since launch
1st December 2006	Special 5 x £1 million draw
1st June 2007	50th year since first draw, second special 5 x £1 million draw

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