Premium Bonds: End Is Nigh For Prizes On The Doormat

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The days are numbered for the unexpected arrival of a Premium Bonds prize on the doormat, organisers have announced.

Some prize winners still receive paper warrants - like a cheque - in the post when their lucky numbers are drawn.

National Savings and Investments (NS&I), which runs the scheme, said these would be totally phased out by March.

Instead, prizes will be paid directly into bank accounts.

Premium Bonds are an investment product, bought for £1 each from NS&I and guaranteed by the Treasury.

Investors are not paid interest but instead their Bonds are entered into a prize draw each month where they can win between £25 and £1 million tax free.

The option of having prize money paid directly is already available and, in the latest draw, 74% of prizes were put straight into accounts or reinvested in more Premium Bonds.

The traditional prize warrants can be cashed in at a bank or building society.

Ian Ackerley, NS&I chief executive, said there was "understandable affection" for prizes being received by post, but direct payment was a much better system.

"As well as being beneficial to our customers, this change will allow NS&I to manage Premium Bonds prize distribution more cost-effectively and with a much lower environmental impact," he said.

Premium Bonds customers will need to ensure NS&I has their up-to-date UK bank account details, along with an email address or UK mobile phone number, so that they can be notified of any prize wins.

Those who fail to do so will still receive prize letters, explaining how to claim.

NS&I stressed that it would never call customers to ask for their bank details.

More than £88bn is invested in Premium Bonds by more than 21 million people.

The chances of winning remain slim, with odds of 24,500 to one of each £1 Bond winning any of the tax-free prizes.

Each month, Ernie - or Electronic Random Number Indicator Equipment - makes the regular Premium Bonds draw from Blackpool.

Its fifth incarnation - a computer chip the size of a grain of rice - has been drawing the winning numbers for the last 18 months.

Selecting the numbers only takes minutes, compared to the nine hours taken by its immediate predecessor and the 10 days it took Ernie 1 to complete the draw.