When UK Chancellor of the Exchequer Harold Macmillan announced the introduction of Premium Bonds in his budget on April 17th 1956, first reactions were unfavourable. The church condemned the proposed draw and opposition chancellor Harold Wilson dubbed it a "squalid raffle" that would lead to "national demoralisation". But 1950s Britain was ready for a bit of luck. After the hardships endured in World War II, many saw the opportunity to invest in the chance to win dividends of up to £1,000 in the monthly prize draw as a welcome distraction from the daily grind.
Officially launched on November 1st 1956 by the National Savings Committee, the first Premium Bond was bought by the then Lord Major of London, Sir Cuthbert Ackroyd. Other dignitaries followed suit across the UK. Although some continued to protest against the plans, often on religious grounds, the Post Office soon reported queues of hopeful investors patiently waiting to buy their £1 Bonds.
The first draw took place on June 2nd 1957 and was started by the Postmaster General, Ernest Marples. The winning numbers were generated by the purpose built Electronic Random Number Indicator Equipment (ERNIE) and the first winner announced after 15 minutes. Even though it took a further ten days for the machine to select the rest of the winning numbers, the Bonds proved an instant hit and sales took off. People viewed them as an opportunity for a bit of harmless fun and Premium Bonds soon became a popular way to gift an investment to new born babies.
As Premium Bonds established a place in British culture, a surprise celebrity emerged from their success - ERNIE. The machine that generates the lucky numbers each month was conceived by talented Post Office engineer Tommy Flowers whose Colossus computer had been instrumental in the code-breaking work at Bletchley Park during the war. Soon after the first draw of 1957, ERNIE's fan mail poured in from Bond holders hoping to turn their luck and coach parties arrived in Blackpool to view the van-sized machine. As the number of investors grew and technology improved, ERNIE needed a face lift with new models appearing in 1973 and 1988. Finally, ERNIE Mark 4 came into operation in 2004 and reduced the draw time from 10 days to two and a half hours. After every draw, ERNIE's numbers are independently checked by top government mathematicians to verify their random nature, countering any claims of foul play.
Today, Premium Bonds are more popular than ever, thanks partly to the introduction of a tax free £1 million jackpot in April 1994 and their favourable odds compared to the National Lottery. By September 2004, 23 million investors had joined in a 24,000 to 1 chance of winning a prize although statistical analysis of previous results shows that certain factors might better your outcome. If you are called Hannah or live in Bolton you have the highest probability of winning the big prize and you should always take care to buy your Bonds on a Wednesday.
While smaller prizes are sent in the post, each month the £1 million jackpot winner receives a special visit from "Agent Million". Dispatched from the National Savings and Investment Headquarters in Blackpool, this mystery lady has the wonderful job of delivering the good news in person. As she puts it, "I think it's a fantastic job, to go out every month driving along thinking I'm going to make a big difference to someone and put a smile on their face at the end of the day." Her identity is a closely guarded secret and if you want her to come knocking on your door, it may be worth checking your records. Over the years, more than 38,000 people have failed to claim prize money totalling £2.7 million and all because they forgot to give ERNIE their new address.
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