Premium Bonds celebrate their 65th Birthday!
As Premium Bonds celebrate their 65th Birthday, we take a look at the nation's favourite savings product
Introduced to encourage people to save again following the second world war, Premium Bonds went on sale on 1st November 1956 and sold £5m on their first day (around £121m in today's money!). On 1st June 1957, ERNIE (Electronic Random Number Indicator Equipment), which was built by the team behind WWII code breaker Colossus, made the first premium bond prize draw with a top payout of £1,000. Ernest Marples, the Paymaster General, started the first draw with Lord Mackintosh of Halifax holding the first prize winning number aloft in Lytham St Anne's.
Today, the 781st prize draw was made with two savers winning £1m each and the prize pool increased to 1.40% (from 1% previously) generating an additional 1.4m prizes this month and improving the odds of each bond winning to 1:24,500 from 1:34,500.
💷 Over £118bn is saved in Premium Bonds
🎁 £22.9bn has been paid out in prizes
2️⃣ millionaires are made every month - the first £1m prize was introduced in April 1994 and the second £1m prize was added in August 2005
🔢 23,142 prizes were awarded in the first ever draw and 4,823,067 prizes in today's
Premium Bonds still hold huge appeal to savers who love the hope that they will scoop that big prize. Are they still worth it though? The answer is it depends on what you want to achieve from your savings and how much savings you hold. If you want a guaranteed return then Chase (1.50%) and Yorkshire Building Society (up to 1.38%) are a better bet as savers will earn interest each month whereas the prize pool rate of 1.40% is across all Premium Bonds. To pay for the big prizes, those with average luck will get less than the 1.40% on average because lots of people have to get nothing to pay for the two £1m prizes. A £10,000 holding will give savers with average luck around 1% and even those with £30,000 are only looking at around a 1.30% return.
It's the hope of a £1m win that keeps savers interested, the 100% safety of them and the fact that, unlike the lottery, savers don't lose their stake. With 10 x £100,000 prizes (previously 6) and 19 x £50,000 (previously 11) there's still plenty of savers who will sacrifice their interest for a hope of a big prize and Premium Bonds popularity is unlikely to wane soon. Given they account for around 55% of NS&I's entire savings book, they aren't going anywhere anytime soon either. The nation's love affair with Premium Bonds has a way to go yet.