Even up the odds of winning a million pounds

It's still one in 6.8 billion, but a punt on Premium Bonds is a better bet than the lottery, argues Ian Hunter
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Failed to win the lottery for yet another week? Perhaps it's time to try another form of gambling where, even if you do not win, losing is not as painful. This 40-year-old game of chance offers every participant a monthly opportunity to win pounds 1m. The Premium Bond may have entered a comfortable middle age but it has still retained its powers of attraction.

Premium Bonds were first introduced in 1956 by the then chancellor Harold MacMillan. Since 1957 National Savings has paid out pounds 3.2bn in prize money and a grand total of 53.42 million prizes.

The minimum Premium Bond stake is now pounds 100 (compare that with how much you have spent on lottery tickets in the last two years). The maximum holding permitted is pounds 20,000. Bonds can be bought at any post office or direct from National Savings.

Bonds are usually issued within three weeks of the date of purchase. Once the bonds have been held for a full calendar month they qualify for the prize draws. Each pounds 1 unit has an equal and separate chance of winning.

The winning numbers are selected each month by the Electronic Random Number Indicator Equipment, known to a generation of punters as Ernie. The overall number of prizes awarded is fixed at 350,000. The prizes vary between pounds 50 and pounds 1m. The monthly prize fund is divided into three bands. The first 10 per cent of the prize money is channelled into awards between pounds 1m and pounds 5000. The second band, which amounts to 15 per cent of the prize money, provides prizes of either pounds 1000 or pounds 500. The remainder of prizes consists of sums of either pounds 100 or pounds 50. All prizes are paid to winners free of tax and winners are automatically informed of their good fortune by National Savings.

The good news for those who have moved house without leaving a forwarding address is that there is no time limit for collecting a prize. A complete list of the winning numbers is available at all main post offices along with a list of unclaimed prizes which is updated every quarter. Anyone who has lost bonds or had them stolen can write to Premium Bonds, National Savings, Lytham St Annes, Lancs, FYO 1YN. It would be helpful if you can supply the account number or the bond numbers, but failing that you should supply details of where you were living at the time you bought the bonds and your present address and it may still be possible to track them down and issue duplicates.

Bonds can be cashed in at any time. An application simply has to be made to National Savings, with a signature for verification. The Bond is usually redeemed within 10 days.

According to National Savings the odds against a single bond winning pounds 1m are one in 6.8 billion, but one holder with just a pounds 20 bond has already won a million.

A quick glance at the list of the 30 Premium Bond millionaires since 1994 seems to suggest that a way of increasing your chances of winning is either to move to the South of England, if you live in Britain, or County Antrim if you live in Northern Ireland. National Savings seeks to counter any regional paranoia by explaining: "It's true that more prizes are won in the South. But there's a very good reason for this, simply that more Bonds are held by people who live there. Ernie does not store names and addresses and cannot know where the holders of the numbers live. The winning random numbers are matched with the names and addresses of the winners only after the prizes draw has taken place."

National Savings also seeks to re-assure Bond holders that Ernie is completely random. Each month Ernie's output is tested by the Government Actuary. These tests, according to National Savings, check that the numbers are free of bias and that each bond has an equal chance of winning.

However, a quick glance at the list of Premium Bond millionaires shows that the vast majority of winners purchased their holdings in the 1990s. Remember, it could be you and if it isn't, at no extra cost, it could be next month.

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