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Press releaseMORE TAX-FREE PRIZES AS PREMIUM BONDS MAXIMUM INVESTMENT INCREASED TO £30,000 BY NATIONAL SAVINGS AND INVESTMENTS10 May 2003* * CASE STUDIES AND NEW ERNIE PHOTOGRAPHS AVAILABLE * * From 12 May 2003 the amount that an individual customer can invest in Premium Bonds from National Savings and Investments (NS&I) will increase to £30,000, up from the current maximum of £20,000. As customers increase their investment above £20,000, it will mean even more tax-free prizes for Premium Bond holders. The threshold has been increased following high customer demand, particularly among those with the current £20,000 maximum who say they would invest more in Premium Bonds if the limit was raised. The last time it went up was in April 1993 from £10,000 to £20,000, and the number of customers who hold £20,000 has increased from 75,000 five years ago to over 350,0001. Currently, 23 million people hold Premium Bonds and over the last ten years there has been resurgence in their popularity. The total amount invested has increased from £2.7 billion to £19.8 billion2 since April 1993 - an increase of 700% - and sales in the first four months of 2003 alone exceeded £1 billion3. Premium Bonds are one of Britain's financial services success stories. Gill Cattanach, National Savings and Investments Commercial Director, said: "Raising the maximum amount that can be invested is excellent news for customers who hold Premium Bonds because the more they invest, the greater their chance of winning prizes. "Many of the 350,000 customers who currently have the maximum holding of £20,000 have asked us to increase the limit on the amount they can invest and say they would invest more if the maximum was higher, and I am delighted that customers will now be able to do so. "The more Premium Bonds held, the more chances a Bond holder has of winning a tax-free prize, so those who increase their investment will increase their chance of winning, whether they have a small or large investment. "The combination of 100% security that National Savings and Investments offers and the chance to win some of the hundreds of thousands of tax-free prizes we give away every month, including the prospect of winning the £1 million monthly jackpot, means Premium Bonds have captured the imagination of British savers and investors and are extremely popular and in great demand." How to buy Premium Bonds Premium Bonds can be bought by:
How customers could increase their chances by investing more Each and every Premium Bond entered into the draw has an equal chance of winning a monthly tax-free prize. From 1 June, the odds of winning will be 30,000 to 1. An investor who increases their holding to £30,000, with average luck, can expect to win 12 tax-free prizes a year - one a month - while someone who has the previous maximum holding of £20,000 could expect to win eight tax-free prizes a year. The prize fund rate is currently 2.25% per annum tax free - equivalent to 2.81% for a basic rate taxpayer and 3.75% for a higher rate taxpayer - and a Bond holder has a greater chance of winning a tax-free prize if they increase their total investment. How Premium Bonds work Premium Bonds go into a monthly draw and if ERNIE, the Blackpool-based random number generator, produces numbers that match Premium Bonds held by customers, a prize - ranging from £50 up to the £1 million jackpot - is awarded. In May 2003, 680,000 prizes worth nearly £39 million were awarded. The overall value of prizes paid out each month is based on the prize fund rate and the number of Bonds in the draw. This means the more money invested in Premium Bonds, the higher the overall value of prizes awarded. Like all National Savings and Investments products, Premium Bonds offer investors 100% capital security because they are backed by HM Treasury. Investors can cash in their Premium Bonds at any time. ENDS Notes to Editors1, 2, 3: Figures as at end April 2003. 4. Premium Bonds customers will only be able to increase their holding above £20,000 from 12 May 2003 and not before. 5. Premium Bonds were introduced in November 1956 and the first draw took place on 2 June 1957. Blackpool is the home of Premium Bonds. 6. National Savings and Investments is one of the largest savings organisations in the UK, offering a range of savings and investments products (to 30 million customers). All products offer 100% security, because they are backed by HM Treasury. 7. Further information, interviews with Gill Cattanach and digital images, contact the NS&I Media Team. An ISDN line is available for interviews: 020 7602 4522. 8. For details of case studies and brand new photographs of ERNIE in hi-res jpeg format, contact the NS&I Media Team. NS&I Media Team
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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