THE DAILY TELEGRAPH: Premium Bonds are enormously popular, but do they offer decent returns?
Britain's 250th Premium Bond millionaire was created this month. The lucky winner is from the East Riding of Yorkshire – one of 132,118 Premium Bonds held in the East Riding district alone.
There are 23 million Premium Bond holders in the UK, making it the most popular savings product in Britain. More than a third of us hold at least one of the nation's first examples of government-sponsored gambling.
The Premium Bond scheme – often known as Ernie – is run by the Government's savings arm, National Savings & Investments (NS&I), and were launched by Harold Macmillan in his Budget in 1956 as a way of reducing inflation and to encourage saving after the end of the Second World War.
The idea was aimed at those who were more interested in winning a prize than getting regular interest payments. The Opposition called it a "squalid raffle", but the country disagreed.
On the first day, £5m of Premium Bonds were sold, and by the time the first draw took place on June 1 1957, £82m had been invested, with a top prize of £1,000 paid. In all, 23,000 prizes were awarded.
A single £1m prize is awarded each month, although to celebrate the bonds' 50th anniversary, NS & I paid out five £1m jackpots in December 2006 and June 2007. In 1994, there was £4bn invested in Premium Bonds, but that has risen to £41bn today.
Sally Swait, Premium Bonds manager at NS&I, said: "We wanted to recognise these landmark dates by holding our biggest ever prize draws."
Each Premium Bond costs £1 and the most you can invest is £30,000. While there is no interest paid, you are entered into a draw with the chance to win £1m every month. The chances of winning ''the big one'' are slim at 24,000 to one, but the chances of winning the National Lottery are about 14m to one, so the odds could be a lot worse. Read on and comment >>> Alison Steed | Tuesday, November 09, 2010
