www.InvestmentGuide.co.uk
www.InvestmentGuide.co.ukNATIONAL SAVINGS
ERNIE (Electronic Random Number Indicator Equipment)
selects £1 bond numbers at random to win nearly 1.5 million prizes each
month. In June 2008 there are two £1 million prizes each month, 8 of
£100,000, 15 of £50,000, 33 of £25,000, 83 of £10,000
and 167 £5,000 prizes. The number of big prozes apart from the two for
£1 million is now less than half it was a year ago. There are also
£1,000, £500, £100 and nearly 1.5 million £50 prizes.
In May 2007 80% of the prizes by number were £50 or £100. Winning
numbers of the big prizes are published in the newspapers but you will also be
notified individually if you win.
In May 2007 there was around
£28 million in
unclaimed prizes. Since November 2001 over £12 million
has been traced from 33,000 successful searches. The names of the winners are
never published.
The chances of 1 bond winning any prize are 22,000 to
1; in 1991 the odds were 11,000 to 1 reflecting the much higher interest rates
which used to apply to determine the prize money. The interest is 3.4%. Someone
with £30,000 invested can expect to win about 15 prizes a year.
Who can invest Anyone. Joint holdings not allowed. Parents, guardians and grandparents can buy bonds for children.
How worthwhile If you are lucky and enjoy a gamble you may win a prize, but you may not. Worth considering only if you are a higher rate taxpayer. On average you can expect to win a prize once a year with £2,400 invested. With £30,000 you can expect 15 prizes a year though most will be £50 and you may win fewer or none at all. Sixty one of the 100 £1 million winners had holdings up to July 2002 had £9,000 or more invested in Premium Bonds of which 28 had holdings of £19,000 or more. However £50 remains the most common prize - in May 2007 1,191,520 prizes were won.
Minimum £100; then in multiples of £10. Each unit is still £1, so £100 gives 100 chances of winning. Bonds become eligible to win one clear calendar month after the month of purchase. You can invest monthly, minimum £50 a month; no maximum but you must not exceed the individual maximum holding of £30,000 per person.
Maximum £30,000 per person.
Suitable Lump sums.
Money back About 2 weeks. Ask for a repayment form and post-paid envelope at a post office or on-line. A partial withdrawal of a multiple bond is allowed. By cheque or in cash at a post office.
Interest None. The amount of money used to determine the total amount of prizes is equivalent to 3.8% a year interest (June 2007).
Tax Prizes are free of income tax and capital gains tax. They need not be declared on a tax return.
Fees to pay None.
Passbook None. You are issued with a bond which is individually numbered for each £1 unit and a holder's number card - this number should be quoted if you withdraw or buy more bonds.
Children Under age 16: bonds must be bought by a parent, guardian or grandparent. Any prize money will normally be paid to the parent or guardian. After age 16 the child takes over the bond.
Risk None. Full value of original investment returned on withdrawal.
How to investOn-line. At post offices. By phone. By post.
Where from You can apply on-line or phone 0845 964 5000 or from post offices.
Last updated 22
June 2008.