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Friday, 21 October 2022

Premium Bonds

In August, 1957, my grandfather bought me and my brother one of the first £1 Premium Bonds each. They had been introduced just under a year earlier on the 1st November, 1956, to encourage people to save. He bought us each another £1 bond in 1959.

Rather than paying interest, bonds were entered in a monthly prize draw, drawn by ERNIE (Electronic Random Number Indicator Equipment), a Colossus computer. They retained their original value and could be cashed in at any time.

In those days, the maximum you could invest was £500 and the top prize was £1,000, as compared to £50,000 and £1 million today. Also, today, you cannot invest less than £25 at a time.

I didn’t cash mine in. In fact, I later bought more, and once won £500. I still have the original two, along with the others, and my Premium Bond record shows a total investment ending in 02.  The original bonds are now numbered 000AB01---- and 000AB76----.  

The records are all electronic now, but here are my two original paper certificates. 

A dutiful grandfather thinking of his grandchildren’s financial future? These two particular bonds have never won a thing.

28 comments:

  1. Ah yes. I still have my £1 paper premium bond, given to me on my 11th birthday. Hasn't won a prize yet but perhaps in another 55 years time it could be a winner?

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  2. You could also get Green Shield stamps and Spangles back in the fifties I do believe?

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    1. When I first went to work in Leeds there was a Green Shield Stamp shop in The Headrow where you could swap your stamps for goods. At least with those you always won something if you collected enough. I got a dictionary.

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    2. My mum used to save them and I would stick them in the books and we obtained several items for the kitchen. There was a large Green Shield Shop in Norwich.

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  3. I still have my £1 Premium Bond and remember the number as it begins, the three characters.

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    1. I only remember "AB01 something". I guess yours hasn't won anything either.

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  4. Well, if they've never won a thing in 65 years, I guess that's a good illustration of the odds of gambling!

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    1. I did win with some later ones I bought. You have to be in it to win it!

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  5. It's an interesting piece of history and I am surprised it continues. I think we have government bonds we can buy but I know nothing about them.

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    1. The total prize fund on these is linked to interest rates.

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  6. I believe that ERNIE rode the fastest milk cart in the west.

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  7. It is nice to have that momento of your grandfather's love.

    We had S and H green stamps here. I just looked them up and they did have a shield on them as well. I wonder if they could be the same. My mother collected them and they went into a cookie jar on top of the fridge. We would all gather around the kitchen table and lick stamps to fill the books. It was a great entertainment to sit with the catalog and pick out the things that we would like to have. My mother made the final choices of course. Those green stamps made us feel quite wealthy!

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    1. That sounds like a lot of licking. I used to stick them in the book straight away, but had so few it wouldn't have been too much trouble to do them all at once.

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    2. It was a huge amount of licking being done by four children and their mother. It was always very exciting to watch the books fill. "I've finished another!" and someone would count them all again. It always took care of a couple hours in the evening, and we all were excited as we did it. "We have enough for ~xxxx~!" I'd forgotten how very exciting that was, and I smile to remember that simple joy. Thanks Tasker!

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  8. When I was in elementary school (1974-78), a system was in place where children could hand over minimal amounts of their pocket money to their class teacher every Friday. The teacher would give them stamps to stick into a little savings book, and that could be cashed in or transferred into a "proper" savings book at your bank. If I remember correctly, the stamps could also be exchanged for toys, books or other things children might want.
    I know nothing about premium bonds, but from your description it sounds no different from playing the lottery (which I never did).

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    1. The difference from the lottery is that with Premium Bonds you only gamble the interest, and as the total prize fund is linked to bank interest rates, then taking the county as a whole it is not a gamble at all. However, because the prizes are not all the same you are gambling where you win big, small or not at all each month. If you have enough you are almost certain to win something each month, but it might only be £25 on £50,000 of bonds.

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  9. Mr B has 4 bonds from about the same era and they have never won anything either. He lives in hope but also plays the postcode lottery. At least he still had the £4 in bonds, the lottery 'investment' is gone each month.

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    1. Mmmm! Just checked and £1 from 1957 would be worth over £18 today adjusted for inflation

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  10. I had National Savings stamps with young Prince Charles and the even younger Princess Anne for encouragement.
    I often wonder why the results of the Premium Bond draw take so long to be promulgated - two working days after the first of the month, oh, really!

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    1. That means I could theoretically have had National Savings too, but never did.
      I would guess they know the winning Premium Bond numbers very quickly, but then have to go through a time-consuming publishing procedure.

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  11. I have never heard of bonds that function like these -- only savings bonds that earn interest. And they still have value? Could they still win something?

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    1. I could still cash them for £1 each, although as mentioned above, that £1 from 1957 is the inflation-adjusted equivalent of over £18 today. But to win a minimum prize of £25 £1m it would make it all worthwhile - and if it were £1M .... !!!!

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  12. Debby has reminded me of the excitement of green shield stamps and the catalogue book, perused very carefully by my daughter in the toy section. Always full of promise just like the Argos catalogue, great tome that it was.

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    1. I'd almost forgotten about Green Shield Stamps until it came up in the comments her.
      There is a website that has Argos catalogues going back for years - another trip into the past. You can't believe what yes used to buy. Like Abigails Party.

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  13. I've heard of these bonds but never had any myself. My parents probably never even knew about such things either.

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    1. I believe they were very heavily advertised new in the nineteen-fifties.

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