Our savings and investments - The history of ERNIE and Premium Bonds
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The history of ERNIE and Premium Bonds
Budget day, 17 April 1956, and Harold Macmillan announced the launch of Premium Bonds. The intention was to reduce inflation and to encourage those who might find prize-winning more appealing than interest to save their money.
The first Premium Bond was bought on 1 November 1956 by Alderman Sir Cuthbert Ackroyd - he later became Lord Mayor of London. By the end of that first day, £5 million worth of Premium Bonds had been sold.
With £82 million invested, the first draw happened the following year on Saturday 1 June 1957 at Bond headquarters in Lytham St. Anne’s, Lancashire and by the end of August that year, £100 million had been invested. There were 23,000 prizes in that first draw with a top prize of £1,000.
Back then celebrities would announce the top prizes - amongst them Bruce Forsyth, Bob Hope and Dame Judi Dench - and in addition to being a great way of saving, the Bonds made popular presents too.
Since the 1990s, Premium Bonds have undergone something of a renaissance, with the amount invested rising from £4 billion in 1994 to a staggering £40 billion in 2008.
New online and phone service
On 29 December 2010, NS&I introduced two new ways for customers to manage their Premium Bonds: online and by phone. The new service offers customers a quick, easy and secure way to buy more Bonds, check their prizes, choose to go paperless and more.
New Premium Bond prize checker app
On 16 December 2011, NS&I launched the Premium Bond prize checker app so customers can now check their prizes on the move.
Who is ERNIE?
No one’s really sure whose idea it was to use ‘ERNIE’ to represent ‘Electronic Random Number Indicator Equipment’, but he’s central to the concept of Premium Bonds because he produces all the winning numbers.
Since 1957, four generations of ERNIE have produced the numbers for over a hundred million tax-free prizes worth over £9 billion.
The basic function of each ERNIE machine has not changed but, with continuous advances in technology, each ERNIE has been replaced by a faster and smaller model to keep pace with Premium Bond demand.
ERNIE 1 to ERNIE 4
ERNIE 1 used to take 52 days to complete a draw, today ERNIE 4 takes a mere two and a half hours. Introduced in April 2004 because Premium Bonds were becoming so popular, ERNIE 4 was also going to need to produce 11-digit Bond numbers.
He was tested and received full accreditation for generating all Bond numbers at random, no matter how long. So every Bond number, no matter whether it has eight, nine, 10 or 11 digits - or when it was purchased - has a separate and equal chance of winning a prize.
If you’d like to see if you’ve won any prizes, we list all unclaimed prizes at our prize checker. And please remember, NS&I does not endorse companies which charge customers a fee to search for lost or forgotten money on their behalf.
ERNIE is so famous that he receives Christmas and Valentine cards every year. And, as is the case with many a celebrity figure, over the years some myths have grown up around ERNIE and Premium Bonds. Here are a few of them exploded!