HAPPY 50TH ANNIVERSARY PREMIUM BONDS!

A major milestone in Britain’s financial and social history will be reached on Wednesday 1 November this year when the nation will celebrate 50 years since Premium Bonds first went on sale. Arguably Britain’s most successful financial product, 23 million people hold a record £33 billion in Premium Bonds.

The beginning

On a chilly day in November 1956 a grand launch ceremony was held in Trafalgar Square at which the then Chancellor of the Exchequer, Harold Macmillan, declared Premium Bonds as: “An encouragement to the practice of saving and thrift by those members of the community who are not attracted to 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.”

Launched under the tagline “Saving with a thrill”, Premium Bonds immediately caught the public’s imagination and £5 million was invested in the first day alone. The first Bond was bought on 1 November 1956 by Alderman Sir Cuthbert Ackroyd, who later became Lord Mayor of London.

Back in 1957 – when the first draw took place – the minimum investment was £1 and the top prize was £1,000.

Today

Fifty years on, Macmillan’s decree remains true and the success of Premium Bonds is reflected by the fact that almost 40% of the population currently hold them and more Bonds have been sold in the last five years than the previous 45 put together.  These days the minimum investment is £100, and two £1 million jackpots are given away every month, together with more than one million other prizes.

John Prout, NS&I’s sales director, commented: “At National Savings and Investments, we feel Premium Bonds are one of Britain’s financial success stories. Encouraging people to save for their future is not a new challenge, 50 years ago Premium Bonds were launched to combat this very problem and tackle the perception that saving is complicated, onerous and boring.

“Premium Bonds have become so successful because they offer a simple proposition which combines security with the sense of fun that comes from winning tax-free* prizes. They offer a way of saving that is unique and appeals to a wide range of savers, from investors looking to balance a portfolio to those looking for a safe place for rainy day money.”

Two special draws

In celebration of the two anniversaries – the launch in 1956 and the first draw in 1957 – National Savings and Investments, which runs Premium Bonds, is running two special draws in December 2006 and June 2007.  In each of these draws, investors stand a chance of winning one of five £1 million jackpots. Customers need to have bought their Premium Bonds by 31 October 2006 to be in the December draw and by 30 April 2007 to be included in June’s.

Premium Bond Facts

1. The Premium Bond prize fund rate is currently 3.15% tax-free*, equivalent to 5.25% for a higher rate taxpayer and 3.93% for a basic rate taxpayer. 

2. The odds of winning are 24,000 to 1 and, with average luck, an investor with £30,000 in Premium Bonds could win 15 tax-free* prizes a year – more than one a month.

3. Since the first Premium Bonds prize draw in 1957, over 142 million tax-free* prizes worth £9 billion have been given away.  Prizes range from £50 to £1 million. By 1 November Ernie will have created 168 millionaires since the £1 million jackpot was introduced in 1994.

4. Someone buys Premium bonds every 10 seconds.

5. Approximately 1.7 million people have £5,000 or more invested and over 315,000 customers have the maximum £30,000 invested

6. There is currently £30 million in unclaimed prizes.  There is no time limit on claiming prizes.  Premium Bond investors can check to see if they have won by logging on to www.nsandi.com and using the Premium Bond prize checker.

7. Premium Bonds can be bought online at www.nsandi.com, by telephone on 0500 007 007, by post, and over the counter at Post Office® branches.

A brief history

ENDS

Materials available on request include:

1. Pictures of ERNIE (including the new ERNIE 4 machine) and Agent Million as well as archive shots from 1956 and 1957 are available in high-resolution jpeg format

2. Historic and current  broadcast footage of Premium Bonds, ERNIE over the years, people buying Premium Bonds plus soundbites with Premium Bond winners

3. Case studies including original investors, high value winners and regular winners

4. Interviews with Agent Million, number expert Johnny Ball, Professor Richard Wiseman, expert of luck, NS&I employees from 1956, responsible for checking the winning numbers, checking eligibility of winners and designing the original ERNIE.

5. A full history and fact sheets on Premium Bonds, ERNIE, sales information, odds and prize information.

Notes to Editors

* All Premium Bond prizes are free of UK income Tax and Capital Gains tax.