Premium bonds celebrate their 60th birthday on Tuesday – and their popularity over the decades means around one in three adults now hold the investments.
More than 21 million customers collectively hold over £63 billion-worth of premium bonds – equating to around 37% of UK adults holding the deals.
Alderman Sir Cuthbert Ackroyd, the then Lord Mayor of London, bought the first premium bond on November 1 1956.
By the end of their first day on sale, £5 million-worth of premium bonds had been sold. The first prize draw was held on June 1, 1957. There were 23,000 prizes in the first draw, with a top prize of £1,000.
Since the first draw was held, 355 million prizes with a total value of £17 billion have been handed out.
The amount bond holders can individually invest has changed significantly. In 1956, the maximum holding limit stood at £500 – but the figure is now £50,000. The top prize has also changed over the years, from £1,000 to the current £1 million jackpot.
Some 350 premium bonds millionaires have been created since the bonds first went on sale in 1956.
The way people buy and check their premium bonds has also changed, reflecting advances in technology. Whereas people used to buy the bonds from the Post Office, customers now buy them online, over the phone, or by post.
Nowadays, bond holders can now go online to see if they have won anything, using the premium bonds prize checker on nsandi.com or by downloading an app, where customers can find out if they have won a prize in the latest draw, or in the last six months.
Premium bond holders can also opt to have prizes paid directly into their bank account with notification of prize wins coming to them by email.
The bonds are provided by National Savings and Investments (NS&I). Money held with NS&I has 100% security as it is backed by the Treasury.
Jill Waters, retail director at NS&I, said: “Over the last 60 years, premium bonds have become a part of the fabric of British life.”
Premium bonds do not pay savers regular interest, so they may not be suitable for someone who is looking for a guaranteed, regular income from their cash. Instead, there is a monthly prize draw with the chance to win tax-free prizes.
The bonds are available to people aged over 16 with a minimum of £100 to invest. Parents and grandparents can invest on behalf of their child or grandchild.
The odds of each individual bond number winning any prize are 30,000 to one. Previously, the odds had been more favourable, at 26,000 to one, but earlier this year NS&I announced a string of rate cuts across its products as well as changes to premium bond prizes.
Explaining the decision behind the rate cuts, NS&I has said previously that worsening rates in the cash savings market generally meant its own rates had risen in the competitor tables.
NS&I’s remit means that it has a duty to balance the interests of savers by offering them a fair rate alongside the interests of taxpayers and the interests of the wider financial services sector, to help maintain overall stability.
Danny Cox, a chartered financial planner at Hargreaves Lansdown, described premium bonds as “a national treasure”.
He said: “More people hold premium bonds than save into cash Isa. With cash returns so poor, the potential for a tax-free prize compared to meagre or zero interest is more attractive – if your cash is paying nothing, at least with premium bonds you could win something.
“The absolute security premium bonds provide is of key importance to savers and investors alike.”