Our savings and investments - The history of ERNIE and Premium Bonds
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ERNIE stands for Electronic Random Number Indicator Equipment and he was invented in 1956 by one of the original Bletchley Park code breakers.
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 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 - who 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.
November 1956: Customers sign up for Premium Savings Bonds
Postmaster-General Ernest Marples
starting the first draw.
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 290 million tax-free prizes worth approximately £15 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The basic function of each ERNIE machine has not changed but, with continuous advances in technology, each ERNIE has been replaced by a faster and smaller model to keep pace with Premium Bonds demand.
Engineers working on ERNIE 1's
Lord Mackintosh holding up the first ever jackpot winning number
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.
After testing, Ernie 4 received full accreditation for generating all Bond numbers at random, no matter how long. So every Bond number, whether it has eight, nine, 10 or 11 digits has a separate and equal chance of winning a prize.
Buying Premium Bonds
via the Internet
Launch of ERNIE 4 at the
Premium Bonds in the 21st Century
Since 2010 we’ve given customers more ways to manage and check their Premium Bonds.
When you register for our online and phone service you can arrange to have your prizes paid directly into your bank account instead of waiting for a warrant (like a cheque) to arrive in the post. And of course, you can buy more Bonds whenever you like, 24 hours a day.
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 debunked!
Each month, the Government Actuary's Department (GAD) does an independent check to ensure ERNIE's output is random. GAD then issues a certificate to confirm that it has no reason to believe the draw isn't random. We can only publish numbers and pay out prizes when that certificate has been issued.
Jackpot winners have a varied amount invested – one winner of the £1 million jackpot only had £17 in Premium Bonds! It is true though, that the more Bonds you hold, the better your chances of winning.
Each £1 Bond has an equal chance of winning, regardless of when or where it was bought. Over 89% of eligible Bonds have been bought since the year 2000. So even though Premium Bonds have been on sale for over 50 years, this is why newer Bonds seem to win more frequently.
Winning numbers are generated randomly and then matched against eligible Bond numbers afterwards – numbers aren't entered into or stored in ERNIE so there's no way that any Bonds can be left out of the draw.
If it seems that more prizes are won by holders in the South East, that's because there are more Bonds held there compared with the rest of the UK.
Not at all. The prize fund for each draw is a month's interest on all eligible Bonds in the draw, so the more Bonds we sell, the bigger the prize fund.
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