The 'squalid raffle' that has drawn 23 million investors
Harold Wilson called it a "squalid raffle". Dr Geoffrey Fisher, then the Archbishop of Canterbury, said it was "a cold, solitary, mechanical, uncompanionable, inhuman activity".
When the Lord Mayor of London bought the first Premium Bond, 50 years ago tomorrow, on 1 November 1956, it was in the face of criticism that continues to be levelled at the scheme today. Initially, the controversy focused on the fact that the Government was appearing to sanction gambling.
Announcing his plan for Premium Bonds in the April 1956 Budget, the then-Chancellor, Harold MacMillan, claimed the scheme would encourage saving and help control inflation.
But the Labour opposition under Mr Wilson, backed by church groups, attacked the morality of the monthly draws. Two Post Office workers even refused to sell Premium Bonds on religious grounds.
In more recent times, attacks on Premium Bonds have focused on the value for money that the scheme offers. A saver who holds the maximum £30,000 of bonds could, on average, today expect to win prizes worth the equivalent of an annual return of just 3.15 per cent.
Lisa Taylor, head of savings at independent analyst Moneyfacts, says this is uncompetitive. "The average return is much lower than the return you could earn from the best instant access savings accounts, which currently guarantee more than 5 per cent a year," she warns.
Premium Bond prizes are at least tax-free, which boosts the effective average return to about 5 per cent for higher-rate taxpayers. But Ms Taylor counters: "The return isn't certain and anyway, the average figure is slanted by the large prizes, which you're much less likely to win."
The immediate success of Premium Bonds followed a publicity campaign that caught the public imagination. By the time of the first draw in June 1957, 49 million bonds had been sold and more than 23,000 prizes were on offer - a 2,095-to-one chance of winning. Among the 96 winners of the £1,000 top prizes, five had bought just one £1 bond.
Ernie - electronic random number indicator equipment - the computer that processed the prize draw, was a particular success. The first machine was invented by a Second World War code breaker, Tom Flowers, and was the size of a small bus. It has subsequently been replaced three times and the latest incarnation is roughly the size of a DVD player.
The scheme expanded throughout the Sixties and Seventies, with the winning numbers announced on television each week by stars ranging from Bruce Forsyth to Bob Hope. The top prize was raised to £50,000 in 1971 and then to £250,000 in 1980.
By 1988, 2.2 billion Premium Bonds were in circulation, but sales began to slow. One problem was that the scheme was ultimately a way for the Treasury to supplement Government borrowing, for which the need rose and fell.
"Our remit is to raise funding for the Government at a cheaper rate than in the gilts market," says Dax Hawkins, senior savings strategist at National Savings & Investments, the organisation that now runs the Premium Bonds scheme.
"In the past, we've been something of a hostage to fortune - there were times when the Treasury didn't want us to raise money and our profile and prize money reflected that."
Another threat emerged in the early Nineties, with the announcement of the state-sanctioned National Lottery. In 1994, to counter the threat of the new draw, which captured the television slots vacated by Premium Bonds some 10 years earlier, National Savings revamped the scheme. It raised the minimum purchase to £100 and introduced a top prize of £1m.
Sales immediately doubled. "People thought the Lottery would have an adverse effect on us," says Mr Hawkins. "In fact, the impact has been positive, because people began to appreciate the fact that you never lose your stake with Premium Bonds."
A second overhaul of Premium Bonds in 2002 boosted sales further. A marketing drive saw National Savings offering sales online and by phone. More Premium Bonds have been sold in the past five years than in the previous 45.
Susan Hannums, head of savings at independent financial adviser AWD Chase de Vere, thinks the most recent success of the scheme reflects savers' investment fatigue. "Many savers now think there is a better chance of winning money than there is of making it from saving and investing," she says.
Yet the criticism continues. "Premium Bonds should be a bit of fun and no more than that," says Ms Hannums. "From any sensible point of view, this is not a decent investment."
Premium Bonds by numbers
* 3 hours Amount of time Ernie takes to process the monthly prize draw.
* £1m The top Premium Bond prize - two jackpots are awarded each month.
* 6 Number of extra £1m jackpots on offer in December and January, to mark the 50th anniversary of Premium Bonds.
* £1,000 Top prize in 1957, the price of a brand new Ford Zephyr.
* £25,000 The largest single prize that has still not been claimed.
* 15 Number of prizes the average Premium Bond holder should win each year if he or she has the maximum holding of £30,000.
* £17 Size of the smallest holding ever to win the £1m jackpot.
* 24,000 to 1 Odds of a single £1 Premium Bond winning a prize today.
* £145,000 Amount invested in Premium Bonds every minute.
* 12 per cent Premium Bonds' share of the instant access savings market.
* 10 million Number of savers who have held their Premium Bonds for more than 10 years.
Money Insider: Borrowers can cry mortgage freedom
Women born in 1950s facing severe financial hardship over pensions could have fates changed by Ros Altmann - should she choose to help
Is it really that bad in the bond market?
Five Questions On: GB Energy's new tariff
Money roundup video: Warning for mortgage borrowers and Premium Bonds boost
- 1 I was raped by another man. And now the Government wants to take away the one thing that saved my life
- 2 UK's biggest male rape charity Survivors UK has state funding slashed to zero despite 120% rise in men reporting sexual violence and seeking help
- 3 Ricky Gervais jokes about 'battering Danish DJ to death with a bicycle pump' after rabbit killed
- 4 Iran launches anti-Isis cartoon competition 'to expose true nature of Islamic State'
- 5 England 'favourites' to host 2018 World Cup following Fifa arrests
EU referendum: David Cameron's rules are a 'democratic disgrace', says French-born Scottish politician set to be denied a vote
The day that Britain resigned as a global power
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
A nation of inequality: How the UK is failing to feed its most vulnerable people
Australian man punched in the face for defending Muslim women from abuse on train
EU referendum: David Cameron to deny EU migrants and under-18s the chance to vote
iJobs Money & Business
£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...
£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...
£16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...
Day In a Page
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool