Press release

From August onwards, National Savings and Investments (NS&I), which runs Premium Bonds, will give away two £1 million tax-free jackpots in the monthly draw and over one million other tax-free prizes from a total fund of £72 million.

In order for customers’ Premium Bonds to go into the August draw for a chance to win one of the two £1 million jackpots, they must be bought before the end of June.

The Premium Bond prize fund rate will increase from 3.20% to 3.25% tax-free, equivalent to 5.42% for a higher rate taxpayer and 4.06% for a basic rate taxpayer, which are competitive rates compared to other savings and investments on the high street.

Sales growth

NS&I is able to introduce this ‘double jackpot’ following several years of significant growth in the amount of money invested in Premium Bonds – customers have invested more money over the past six years than in the previous 42 years put together.

In April 1994 – when the single £1 million jackpot was introduced – the total amount invested was £4 billion and now stands at more than £26 billion.  In the past year, total deposits in Premium Bonds have increased by 9% from £24.5 billion to £26.8 billion and monthly sales have averaged £460 million.

Today, 23 million customers own Premium Bonds, confirming their universal appeal and extraordinary reach, with particular interest from more financially astute customers.  More than 210,000 people have now invested the maximum amount of £30,000.

In July 2004, NS&I introduced Premium Bond sales by telephone for the first time and, in January 2005, Premium Bonds were made available to buy online and monthly internet sales have averaged £50 million since then.

Ambitious sales targets

The growth in NS&I’s business – particularly over the last two financial years – will ensure it meets its ambitious net financing target of £15 billion by the end of the financial year 2007-08.

At present, NS&I has some £68 billion invested by customers and it aims to increase this to £78 billion by 2007-08 by developing its existing range of savings and investments and introducing additional offers.

Sharing success

Alan Cook, NS&I chief executive, said: “Premium Bonds have been going from strength to strength in recent years and we wanted to share this success with people who want an exciting way to save money and relish the chance of winning one of two £1 million prizes each month, or one of the other million prizes we’ll be giving away. The customer’s investment is 100% secure because Premium Bonds and NS&I, are backed by HM Treasury, and customers can get their money back at anytime.

“As a business, we continue to seek new and innovative ways of developing our customer offer.  The decision to double the number of jackpot prizes reflects our confidence in the attractiveness of Premium Bonds as a key component for developing a strong savings habit.

“Over the past three years, Premium Bonds have undergone many changes.  We’ve increased the maximum amount you can invest to £30,000 and we’ve made Premium Bonds available to buy over the phone, online and by regular monthly standing order.

“Last year, our business partner, Siemens Business Services, carried out a massive data transfer of all the 23 million Premium Bond customer records to a new computer platform.  This improves our operational efficiency, which we have been able to reinvest in the business.

“All these changes, coupled with ongoing concerns about the stock market, have contributed to our growing success.”

Ivan Lewis MP, Economic Secretary to the Treasury, added: "The government is committed to promoting saving and asset ownership including through Individual Savings Accounts, the Saving Gateway, Stakeholder products and the new Child Trust Fund. By offering two jackpots, NS&I is making Premium Bonds more attractive and thereby helping to encourage the savings habit in Britain."

The magic of Premium Bonds

Each £1 invested buys a unique Premium Bond number and these go into a monthly draw.  The eligible Bond numbers picked by ERNIE, the Premium Bond number generator, will win a prize, ranging from £50 to £1 million.  Launched in 1956, Premium Bonds are an established part of the nation’s financial fabric.

Jackpot winners come from all walks of life, from the financially astute to those who say they ‘enjoy a flutter’.  The winner of the July 2004 jackpot had just £17 in Premium Bonds and she lived in modest circumstances in Newham, east London.

Buying Premium Bonds

Customers can invest between £100 and £30,000 per person and Premium Bonds can be bought for children under the age of 16 by their parents, grandparents or guardians.

Premium Bonds can be bought online at www.nsandi.com, by phone on 0500 007 007, over the counter at a Post Office branch or by post.  NS&I also offers a Premium Bonds monthly regular savings scheme, enabling customers to invest fixed amounts by standing order.

Notes to Editors

First multiple jackpot in 30 years

This is the first time in more than 30 years that there has been more than one jackpot prize.  Before 1971, when a single jackpot of £50,000 was introduced, it was usual for there to be a larger number of top prizes, and between 1960 and 1971, each of the top prizes was worth £5,000.

In 1980, the jackpot increased to £250,000 and went up to £1 million in April 1994.  Since the first Premium Bonds prize draw in 1957, 123 million prizes worth £7.8 billion have been awarded.

The announcement

On Friday 17 June, NS&I is to celebrate the launch of the ‘double jackpot’ with a photo call and interview event at London’s prestigious Savoy Hotel (Strand entrance) with Katherine Jenkins, the Welsh mezzo-soprano and winner of the Album of The Year award at the 2005 Classical BRIT Awards, sponsored by NS&I.  This event will take place between 09.00 and 10.30 on Friday 17 June.

This information must be held under strict embargo until 06.00 on Friday 17 June.  Details of the photo call have been sent to your picture desks or news planning desks.

Interviews

The NS&I media team is available now to give detailed media briefings.  NS&I chief executive Alan Cook, marketing director Karen Jones and sales director John Prout are available this week for interviews and photographs.  Please contact the NS&I media team (details below) for a media briefing or to book your slot with Alan, Karen or John.