‘I’ve had Premium Bonds for 62 years – but still haven’t won a penny’
Derek Kilkenny-Blake was given his bond by his grandfather as a present 62 years ago, but it is yet to return a prize – John Lawrence
Derek Kilkenny-Blake has kept his Premium Bond in a filing cabinet at his home in Gloucestershire for more than half a century. Originally bought for him as a christening present by his grandfather in 1961, Mr Kilkenny-Blake’s National Savings and Investments (NS&I) certificate has been dutifully preserved for 62 years.
Sadly for Mr Kilkenny-Blake, now 63, the bond has yet to return a prize.
“I have always kept my name up to date on the register, but I haven’t won anything,” he says. “It’s a lottery I suppose, and I have friends who win regularly, but I suppose I am just unlucky.”
Premium bonds function atypically to standard savings accounts or cash Isas. Rather than earning interest, every month NS&I uses its Electronic Random Number Indicator Equipment (affectionately called ERNIE), to award random bond-holders prizes between £25 and £1 million.
Mr Kilkenny-Blake’s National Savings and Investments certificate has been dutifully preserved for 62 years – John Lawrence
The odds are adjusted every year to account for the ballooning number of bondholders. NS&I says a typical £25 investment (the minimum buy-in) has a 1 in 840 chance of winning the minimum prize every month. The chances of winning one of the two £1m prizes with a £25 investment are roughly one in two-and-a-half billion.
Each £1 Premium Bond, no matter when it was bought, has an equal chance of winning. It means the fewer bonds you hold, the lower your chances of winning the jackpot.
Last week, NS&I figures obtained by the Telegraph following a Freedom of Information request showed that more than 460,000 savers invested in government-backed accounts 20 years ago. Of the accounts still open, 44,900 have yet to win even £25.
NS&I’s data only stretches back until May 2004, leaving the exact number of Premium Bonds that have never won a prize unknown. However, scores of Telegraph readers who have held Premium Bonds since the 50s and 60s wrote in to complain that they had never won a prize.
‘I’m not holding out much hope’
Carole Murphy, from Bedford, was also gifted Premium Bonds for her christening when she was 13. But in 50 years she has yet to receive a text from NS&I. Ms Murphy, also 63, was surprised to learn that her number was still in the draw at all.
“Going back 50 years ago, £3 was quite a bit of money,” she says. “My friends win regularly and they reinvest their winnings. I have bought another £200 just to see, but I’m not holding out much hope – I don’t have much luck on the lottery either.”
Despite Carol’s friends claiming prizes, she’s still waiting for her number to be called – David Rose, for the Telegraph
First introduced in 1956, Premium Bonds were a popular gift for children’s birthdays and christenings. They remain Britain’s most popular savings product, but Laura Suter, of stockbroker AJ Bell, says the custom of buying them for children is dying out with the rise of digital banking.
She says: “Back when money was much more of a physical thing and when online banking hadn’t become commonplace, giving Premium Bonds was a great way of gifting money without having to put cold hard cash in the post.
“Premium Bonds were a big part of people’s savings and a great way to gift children money. You couldn’t just get parents to open a bank account online and then transfer cash to that savings account and lots of people didn’t want to put cash in the post – so Premium Bonds were an ideal option. It also came with the added excitement of potentially making the child a millionaire.”
Premium Bonds: the chances of winning prizes
Paul Davis, from Edinburgh, was gifted £8 worth of Premium Bonds by his father in 1963. He contacted NS&I, hoping that he might have won a prize in the 60 years his name had been in the draw, but it was not to be.
“I would never dream of buying my kids a Premium Bond,” he says. “It’s really old fashioned – but in those days there wasn’t much you could buy someone that would be a wee investment for them. I’ve taught my kids to save the proper way to save.”
Nonetheless, the bond remains some sentimental token for Mr Davis, 67. “I’ve kept my bond all these years,” he says. “God knows what I’d send it on if I won – if I drank I’d probably spend it on drink.”
Despite saying he’d never buy Premium Bonds for his kids, Paul still holds onto his own – Stuart Nicol
The rise of the Junior Isa and child trust funds, spurred by an awareness that today’s children will inevitably face difficulty buying a house in the future without a sizeable cash deposit, has also dampened the appeal of Premium Bonds as a form of long-term investment.
Interest in Premium Bonds also took a hit in 1994, when the first National Lottery draw took place, offering Britons another way to engage in low-risk-high-reward gambling.
Ed Monk, of broker Fidelity International, says that while Premium Bonds “hold a particular place in the national psyche”, they are ironically ill-suited to the purpose of saving for a child long-term.
He says: “Typically these Premium Bond gifts were very small. Nowadays the minimum you can buy is £25, but in the past it was £1.
“The way the maths works is that if you have a small number of them your chances can be remote – three-quarters of people who have ever held them have never won, which speaks to the fact that if you hold them in low amounts you’re not very likely to win at all.”
NS&I say since the first draw in 1957, ERNIE has drawn over 648 million prizes worth over £30.5bn – Stuart Nicol
Aside from the allure that Premium Bonds can randomly turn holders into millionaires, the other notable appeal of government-backed bonds is that the prizes are tax-free.
Mr Monk said: “If anything, Premium Bonds are best used by people willing to invest at least £15,000. At that level you have a better chance of getting close to the advertised fund rate, assuming you have the average level of luck.
“They offer a particular advantage if you’re a higher-rate taxpayer because it’s hard to get that equivalent return from a savings account or a cash Isa.”
How to track down missing family Premium Bonds
Paul Knight, an IT worker from Farnham, was gifted a Premium Bond by his stepfather when he was adopted. The bond has yet to win a prize, but Mr Knight’s stepson, 24, has already won more than £3,000 despite only buying his first bond a year ago.
“He is up to the maximum you can invest and he wins between £50 and £675 a month,” says Mr Knight, 57. “We calculated that there have been 749 draws since I got mine and yet I haven’t won a penny.”
An NS&I spokesman said: “Each £1 Premium Bond, no matter when it was bought, has an equal chance of winning, meaning the more bonds you have the more chances you have of winning a prize.
“Last month saw over 5.8 million prizes, and since the first draw in 1957, ERNIE has drawn over 648 million prizes worth over £30.5 billion.”
Want to try your luck?
Premium Bonds: how do you buy them and what are the chances of winning?
Read more
Play The Telegraph’s brilliant range of Puzzles – and feel brighter every day. Train your brain and boost your mood with PlusWord, the Mini Crossword, the fearsome Killer Sudoku and even the classic Cryptic Crossword.