In 1956, a code breaker at Bletchley Park invented the first ERNIE. Following this, on Budget Day, April 17, 1956, Harold Macmillan announced the launch of Premium Bonds, providing everyone with a new avenue to save. Since then, there have been five generations of ERNIE, each of which has become quicker and more powerful as technology has advanced.
Are 1 Premium Bonds from the past still valid?
Is it still possible to use my old Premium Bonds? Yes. Your Bonds are still valid and will be included into our monthly prize draws as long as you haven’t cashed them in.
When did the first Premium Bonds go on the market?
On November 1, 1965, the then-Lord Mayor of London, Alderman Sir Cuthbert Ackroyd, went to a Post Office and bought the first Premium Bond. He had no idea he was kicking off a savings revolution. More than £5 million in Bonds had been acquired by the end of the first day, and the nation’s hearts and minds had been captured.
The nation waited with bated breath seven months later, on June 1, 1957, for the first ever Premium Bonds reward draw. A total of 49 million Bonds were purchased prior to June 1, 1957, resulting in more than 23,142 prizes being paid out in the inaugural draw, with a top reward of £1,000.
At the time, the numbers surrounding the initial draw were mind-boggling – the country had never seen anything quite like it. However, with Premium Bonds becoming more popular than ever, the numbers pale in comparison to the most recent prize draw. Since the inception of Premium Bonds:
- The jackpot has grown by 99,900 percent to £1,000,000, up from $1,000 when Premium Bonds were first introduced.
- The number of Bonds eligible has climbed by almost 230,000 percent from the initial draw, when roughly 49 million Bonds were eligible. This number is currently 113,081,411,333. Since ERNIE’s 60th birthday, when the number of qualifying Bonds was 64,057,711,818, the total has nearly doubled. When Premium Bonds turned 50 in November 2006, there were 32,329,928,097 qualifying Bonds.
- There are now 141 times as many prizes as there were in the first draw, which saw 23,142 rewards distributed. NS&I handed out 3,277,723 prizes in the most recent draw. Customers’ behavior has also altered, with nearly 9 out of 10 awards either being deposited straight into customers’ bank accounts or automatically reinvested into additional Premium Bonds each month.
- The prize pool is more than 97 times larger than the first draw, which had a prize pool of £969,750. NS&I gave out £94,234,500 in tax-free prize money in the most recent draw.
- Premium Bonds are currently held by nearly four times as many people as they were before the first draw – there were 6 million Premium Bond holders before the first draw, compared to 21.1 million now.
- Customers could deposit a maximum of £500 in Premium Bonds in November 1956, which was 100 times more than they could in November 1956. The maximum investment limit has continuously increased over time and is presently £50,000.
- 394,007 Bonds purchased prior to the first draw are still eligible – 394,007 Bonds out of almost 64 million purchased prior to the first draw were still active in October 2021. These Bonds had won a total of 103 prizes worth £2,600 in 2021 up until the October 2021 Premium Bonds draw.
- Bond number 200VB673507 is one of the luckiest on record, having won four £25 rewards between July 2017 and March 2019. It was acquired in January 2013 and belonged to a Premium Bonds holder from the West Midlands.
ERNIE, the machine that generates numbers for the monthly prize draws, has been incredibly busy throughout the years. It is now in its fifth generation. Except for Rutland, the UK’s smallest county, the random number generator selected jackpot winners from every county in England. ERNIE has done the following since the initial draw in June 1957:
- ERNIE has completed 774 drawings, with the November 2021 Premium Bonds prize draw being the 774th Premium Bonds prize draw for the company.
- ERNIE has drawn over 538 million winning Bond numbers – with only 23,142 rewards in the initial draw – and has had to significantly increase his productivity in succeeding years, with several versions of the machine built to keep up with demand. In comparison to the more than two days it took to conduct the first ever draw, it now takes an average of 13 minutes to complete a draw.
- ERNIE has been responsible for the distribution of more than £22.1 billion in prize money to Premium Bonds winners in 773 draws.
- ERNIE has ensured that Agent Million has been kept busy travelling the length and breadth of the county, as well as internationally, since the £1 million jackpot award was announced in April 1994. ERNIE’s 469th and 470th millionaires will be announced in November.
Premium Bonds have grown in size and scope over the previous 65 years, with the number of eligible Bonds reaching an all-time high. Premium Bonds were dubbed a “squalid raffle” by Harold Wilson, the Shadow Chancellor at the time of their introduction. However, the way they’ve captivated the imaginations of several generations demonstrates that they’ve become a British icon beloved not just in the United Kingdom, but around the world.
NS&I Retail Director Jill Waters said: “Premium Bonds are still one of the nation’s favorite savings products 65 years after they initially went on sale, which is a monument to their popularity and enduring appeal.
Premium Bonds are about more than just the £1 million jackpot wins; each month, over 3.2 million other tax-free prizes are distributed, providing joy to people all throughout the country.
“Premium Bonds are a fun way to save and are more popular than ever, with millions of people receiving billions of pounds in payments over the years. Premium Bonds have the power to surprise and excite each month, regardless of whether you have £25 or £50,000 invested, while also embracing technology and providing peace of mind that any money deposited is 100 percent secure.”
Premium Bonds are not just the UK’s most popular savings product, but they are also one of the most accessible. The minimum investment is £25 and youngsters can hold them. Parents, grandparents, aunts, uncles, and family friends can buy them for a child under the age of 16 and offer them the gift of saving.
People who believe they need to put in the most money to win need only look at a winner from the London Borough of Newham from July 2004. With a Bond purchased in February 1959 and a total holding value of just £17, the woman won the £1 million jackpot, demonstrating that the seemingly impossible is feasible when it comes to the magic of Premium Bonds.
- NS&I is one of the largest savings institutions in the UK, with 25 million customers and a variety of savings and investing options. Because NS&I is backed by HM Treasury, all products provide 100 percent capital security.
- The current yearly Premium Bonds prize fund rate is 1.00 percent, and the odds of each Bond number winning any prize are 34,500 to 1. The prize fund rate and the chances of winning are both variable and can vary at any time.
- The NS&I media team has photos of ERNIE 5, prior ERNIEs, and Premium Bonds, including the Premium Bonds app, in high-resolution jpeg format.
How far back can Premium Bonds be checked?
Claims have no time limit, so you can go back as far as you like. Here’s how to get your hands on any prizes that haven’t been claimed yet: To begin your claim, call 08085 007 007 if you are a registered user of NS&I’s online and phone services.
When someone dies, what happens to their bonds?
They can, however, stay in the monthly Premium Bonds draws for up to a year after the client has passed away.
After the 12-month term has passed, the face value of the Premium Bonds, as well as any prizes won during that time, will be reimbursed to the dead customer’s estate.
To retain the Bonds in the draw, the person in charge of the deceased customer’s money should indicate this on the death claims form.
Any Premium Bonds awards won will be paid via prize cheque to the person entitled to the money – the estate’s executor – after the prize draw.
Any unclaimed awards will be held until the death claim is processed, after which they will be distributed.
Following the completion of the death claim, we will send any future prizes earned by check to the individual who is entitled to the money.
We are unable to award these prizes online or to consolidate and pay them at the end of the year.
Is it possible to cash in my parents’ savings bonds?
If you are now the owner of the savings bonds or if your parent listed you as the survivor beneficiary on the bonds, take them to a bank or other financial institution. In the presence of a bank official, fill out the redemption form on the back of the bonds and sign it. A driver’s license or other form of identification is required. You must also provide proof of death if you are mentioned as a survivor. This is usually done by a verified copy of the death certificate. The bank will redeem the bonds and pay you the proceeds.
Is there any value in premium savings bonds?
- Have a large sum of money to set aside (the more bonds you have, the bigger your chance of winning a prize)
- Interest on savings is taxed (and have already used up your annual cash ISA allowance)
- The concept of a prize draw appeals to me (you could win big, but you also may not win anything)
It all boils down to your personality. Do you get a nice feeling from the element of surprise? What if you didn’t win anything? How would you feel?
What was the value of the first Premium bond prize?
On June 1, 1957, the first Premium Bond draw was held at Lytham St. Anne’s, near Blackpool, Lancashire. The jackpot was worth £1,000.
Is buying Premium Bonds in bulk better?
Q I have £27,000 in premium bonds that were issued in blocks of £2,000 and £1,000, and my winnings have been poor (£600 in the last three years).
Could you kindly tell me whether there is any evidence that holding one entire block rather than having them divided up as they are now would be better? I realize that if this is asked, it can be done, but I will forfeit one month of participation in the drawing.
A There are numerous theories. There is no evidence, however, that owning premium bonds in a single block increases your chances of winning. Otherwise, it would have become well known very quickly.
The R in ERNIE denotes a ‘random’ (Electronic Random Number Indicator Equipment) selection of the winning numbers, which has been the case since the inaugural draw in 1997. Each month, ERNIE is designed to select 2.5 million numbers, which are subsequently matched to 1 million eligible bonds (many of the numbers include bonds not yet sold or those which have been cashed in).
Since the introduction of the national lottery, premium bonds have grown in popularity to the point that total holdings are now about £25 billion, making the odds of winning the single £1 million top prize astronomical. The average payout is set at 3.2 percent net, but this covers all of the rewards given out, implying that the government is borrowing money at a low rate.
The fact that the earnings are tax-free on an investment where you can always get your money back is a major selling point. Unlike the lottery, which is a zero-sum game. You could sell your bonds and then buy them back to cover consecutive numbers. However, as you point out, this will cost you a month in the draw and will not increase your chances of winning. Don’t get too down on yourself. It appears that investors frequently receive nothing or very little for long periods of time before experiencing a run of excellent fortune.
Is there anyone who has ever won a million dollars playing Premium Bonds?
Hannah won the £1 million jackpot for the first time in August 2004. Her winning Bond, 50HXH949682, was purchased with a £3,000 investment in February 2003.
“On a Sunday afternoon, Agent Million arrived. It had a significant impact on my life. When I found out what I’d earned, I almost passed out. I was completely taken aback.
“I was living on a £108 pension a week before I won, so you can imagine how much that altered my life.” I acquired a house and immediately invested the maximum amount (in Premium Bonds). I still earn £50 a month, and to be honest, those victories give me almost as much pleasure.
“I’ve only informed a few people, just those who could share the secret while remaining normal.” I do occasionally tell others that I’m having a great time thanks to ERNIE.”
Are there any disadvantages to Premium Bonds?
Since 1957, National Savings and Investments (NS&I) has marketed Premium Bonds. They are a risk-free option to save because NS&I is supported by HM Treasury and is part of the government.
Premium Bonds do not pay interest, but they do have a monthly prize draw with prizes ranging from £25 to £1 million.
Each bond costs £1 and includes a unique reference number that is used to enter the draw. That implies that for every pound you invest, you may be eligible to win a prize once a month (though it is highly unlikely).
Limitations
Premium Bonds are only available to those who are 16 years old or older. They can, however, be purchased on behalf of children, grandchildren, and great grandchildren and kept by an adult until the child reaches the age of sixteen.
Popularity
In 2008, premium bonds were a big issue. People were looking for a safer way to save during the financial crunch, and Premium Bonds, which are backed by the government, cannot lose their value. People were also drawn to the product because of the increased chance of winning more money.
There are presently 74 billion Premium Bonds in circulation, with approximately three million winning a prize each month.
Potential returns
Prizes range from £25 to £1 million, with lower-value awards being granted more frequently than higher-value prizes.
It’s vital to keep in mind that there’s no assurance that you’ll win anything. The monthly prize pool determines the “average rate of return,” which is now 1.4 percent.
It’s not as simple as assuming that if you buy Premium Bonds, you’ll get a 1.4 percent return. There are several factors that go into determining your exact chances of receiving prize money in that amount, but we estimate that you’ll need to invest roughly £20,000 in bonds to get close to the average return.
This calculator can be used to determine your chances of winning and potential profits.
Advantages and Disadvantages
Is it worthwhile to invest in Premium Bonds? It is entirely up to you to make that decision. Before making any decisions, it’s a good idea to consider all of the possibilities:
You will not see any rewards on your investments if your Bonds are not picked in the monthly prize draw.
Everyone enjoys the prospect of winning a large sum of money! The thrill of the prospect of winning £25 to £1 million for each Bond held is enough to entice some investors.
While the mathematics required to determine your chances of winning are complex, it is currently believed that the possibility of winning any prize is 1 in 24,500 for each individual Bond held.
Premium Bonds are backed by the government, hence there are no risks involved. In the worst-case situation, the bonds purchased are never selected as a reward, and the account balance remains unchanged.
Though the numerical value of your savings cannot be reduced unless you remove money, the real-term value can. Because the cost of living is rising, a stable investment value that does not rise will lose purchasing power over time.
Savings are always tax-free, which is one of the key benefits of bonds: higher-rate and even basic-rate taxpayers can invest substantial sums with no tax consequences.
Since the Personal Savings Allowance was introduced in 2016, most savers have seen no tax liability on their returns. That means savers can invest in vehicles that provide higher returns, and the lack of tax is no longer a distinguishing or compelling feature.
Premium Bonds are backed by the government’s promise to buy them back at the same price you paid for them. That means you can take your money out whenever you want and not worry about being penalized.
After the bonds have been held for a full prize cycle, they are entered into their first reward draw. This implies that Bonds purchased in March will be retained until the prize draw in May. Borrowing from your Premium Bonds could result in you missing out on a successful month.