Welcome Guest
Log In | Register )
You last visited December 9, 2016, 4:13 pm
All times shown are
Eastern Time (GMT-5:00)

A 'risk-free' lottery

Topic closed. 3 replies. Last post 11 years ago by goldrush.

Page 1 of 1
PrintE-mailLink

Australia
Member #17096
June 11, 2005
225 Posts
Offline
Posted: December 9, 2005, 11:51 pm - IP Logged

Premium Bonds were introduced in 1956, when the UK government tried to encourage ordinary wage earners to save by running a 'risk-free' lottery. Now 23 million people in the UK own at least one premium bond.

Investors buy bonds worth £1 from the Post Office or by post from National Savings & Investments (NS&I). The minimum stake is £100, and the maximum £30,000. Over the past few years sales have rocketed, as people look for a safe home for their investments in the face of turbulent stock markets and paltry interest rates.

The main attraction of National Savings is that they are a relatively safe investment and backed by the Treasury. Anyone aged 16 years or over can buy Premium Bonds for themselves. Premium Bonds can be bought for children under 16 by their parents, grandparents, great grandparents or guardians.


Every month Ernie (Electronic Random Number Indicator Equipment) - the computer which selects the winners - gives away around 600,000 prizes, including a £1 million jackpot - introduced in 1994 - and more than 550,000 other prizes ranging from £50 to £100,000.


The same bond can in theory win time and time again. Premium Bonds can be cashed in at any time, with the only loss being the potential interest that could have been earned in a building society or other type of investment - and winnings are tax-free.

While you can't guarantee you can win, part of the fun of investing in Premium Bonds is waiting for that letter to land on the doormat saying you have won.


    Australia
    Member #17096
    June 11, 2005
    225 Posts
    Offline
    Posted: December 9, 2005, 11:54 pm - IP Logged

    The US Government should introduce a similar type of Bond, they would help with the deficit, so the whole country would win.


      Australia
      Member #17096
      June 11, 2005
      225 Posts
      Offline
      Posted: December 9, 2005, 11:58 pm - IP Logged

      What would you call them? "Premium Bonds", is fine, but a more American name might be in order. I suggest "Liberty Bond", it sounds good.


        Australia
        Member #17096
        June 11, 2005
        225 Posts
        Offline
        Posted: December 11, 2005, 12:35 am - IP Logged

        The odds of winning a Premium Bond prize are 24,000 – 1, meaning someone who invested £30,000 should win approximately 15 tax-free prizes per year. In December's draw Ernie gave away a million prizes worth £72m, with six £100,000 winners, 12 people winning £50,000 and 25 people winning £25,000. There were 1,135,656 £50 prizes dished out. There is currently more than £25m worth of unclaimed prizes sitting dormant with NS&I and there is no time limit on claiming them. Investors can check to see if they have won by logging on to nsandi.com and using the Premium Bond prize checker.