Premium Bonds
From WIN-ipedia - information and strategies about winning
Introduction
Premium Bonds should be seen as an investment rather than a form of Lottery. When you invest in Premium Bonds you are automatically allocated a series of numbers, one for each £1 invested. The minimum purchase is £100 (£50 when you buy by monthly standing order). £100 provides 100 individual Bond numbers which gives you 100 chances of winning a prize.
There 23 million bondholders holding £26 billion worth of Premium Bonds nationwide. Premium Bonds are one of Britain’s financial success stories; they are seen as being a fun, yet purposeful way of saving. There is the entertaining element of winning a good prize, combined with the peace of mind that comes from knowing your capital is 100% secure.
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Prizes
As well as the two £1 million jackpots, there are many other smaller prizes; the prizes fall into the following bands: Prize band Prize value Higher value:
- £1 million
- £100,000
- £50,000
- £25,000
- £10,000
- £5,000
Medium value:
- £1,000
- £500
Lower value:
- £100
- £50
Odds
A prize draw is held each month. There are always two £1 million jackpots and (usually) over a million other cash prizes. The winning Bond numbers are selected at random by a machine called ERNIE (electronic random number indicator equipment). After ERNIE has generated the numbers, they are compared in the order they were generated against all eligible Bond numbers – those that match win a prize. Because ERNIE produces the numbers entirely at random, each individual Bond has an equal chance of winning a prize, regardless of when, where and how it was bought.
Any prize you receive is free of UK Income Tax and Capital Gains Tax and you do not need to declare it on your tax return.
Who can invest?
Anyone aged 16 or over can buy Premium Bonds. Bonds can also be bought for a child under 16 by the child's parent, guardian, grandparent or great grandparent. The parent or guardian will be responsible for the Bonds and will receive notification of the purchase. The Bond certificates will be sent to the purchaser to confirm their purchase. Any prizes will be sent to the parent or guardian.
Premium Bonds cannot be held jointly and are not transferable to another person.
Investment limits
The minimum for each purchase is £100. Purchases above the minimum are in multiples of £10, and you can hold up to £30,000 in total. Clearly, the more you invest the better your chances of winning, so it pays to invest as much as you can.
Security
The element that make Premium Bonds so atttactive is the fact that any money invested is 100% secure. Only National Savings and Investments can make this promise because the investments are backed by HM Treasury. It is also possible to cash in all or part of the Bonds at any time.
Regular Investments
The easiest way to build up your investment and increase your chances of winning is to buy Premium Bonds monthly by standing order. Once you’ve made your first purchase (on the internet, by telephone, by post or at a Post Office® branch) you will be able to invest regularly.
Winners and 'Losers'
If you're a winner, National Savings and Investments will write to you, unless you win one of the £1 million jackpots when their representative will visit you personally with the good news.
Unlike the National Lottery, there is no expiry date on Premium Bonds. There are currently 500,000 unclaimed Premium Bond prizes worth £30 million. The largest unclaimed prize is for £25,000. National Savings believes that the bondholder may have migrated to Canada, but (so far) all efforts to trace them have failed.
How not to lose...
Premium Bonds are fairly easy to access. The money is always yours and you can withdraw it at any time. If you win - great. If you don't - you can always get your money back. The only potential loss is any interest you could have earned if the money had been locked away elsewhere... as it stands, for most people, a reasonably safe bet.
