Remember Ernie?

I guess that many of us who are 50 plus will know more about Premium Bonds than the younger generation who, whilst not fully understanding the workings of the system, may also hold them as a result of gifts from parents or grandparents. ( for more information on Premium Bonds, please visit: nsandi.com/savings-premium-bonds)

Anyway, here are some facts:

• Introduced in 1956 by Chancellor of the Exchequer Harold Macmillan.
• First bond bought by the Lord Mayor of London, Sir Cuthbert Ackroyd in November 1956
• Grandma buys me my first Premium Bonds in December 1959
• Currently £43.5bn outstanding in bonds, owned by 23m people.
• Average holding: about £2,000
• Maximum holding: £30,000
• Minimum new investment: £100
• Prize fund: 1.5% of bonds outstanding, currently equal to £54.4m per month
• Odds on winning (per £1 bond): 24,000 to 1
• All prizes are tax free
• Buy directly from NSandI.com or 0500 500 000

Certainly at the summer of 2009 our client base here had significant holdings up to the maximum holding of £30,000. Many of those clients would get concerned if they did not receive their monthly prize, and many would then go onto the website to see if there had been a mistake! I would have to say though, when in October 2009 the rate of return was dropped to 1.5%, then there was a flight out of Premium Bonds. That said with a bank base rate of 0.5%for the last three years, and a grossed up return of 1.875% for basic rate tax payers, it is probably quite an attractive investment at the present time.

I have set out below what Ernie paid out in January last:

I think that many of you will find these figures staggering… 1,814,674 prizes! And please bear in mind that these prizes are tax free!

Why the name Ernie? It is the name for the computer that generates the winning numbers.

Do you know where your Premium Bond details are? If you don’t, go have a search… You never know if you have an unclaimed prize!