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Premium Bond Scheme

Volume 951: debated on Friday 9 June 1978

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asked the Chancellor of the Exchequer whether he will make a comprehensive statement on the progress and development of the premium bond scheme since its inception 21 years ago, giving the amounts of moneys contributed and the prizes paid; and to what extent a person holding bonds since the commencement of the scheme has had his holdings depreciated due to inflation allowing for no wins, and a series of nominal wins as stated over this period.

The scheme has made steady progress since its inception in November 1956. The annual net investment has ranged from £35 million to £103 million with an annual average appreciation of £58 million. Currently the total sum invested is £1,285 million. The number of prizes paid annually has increased from 95,000 in 1957–58 to 1,332,000 in 1977–78. The number of prizes to be distributed in the monthly June 1978 draw is 117,501 with a value of £5,891,725. The rate of interest on which the prize fund is calculated rose from 4 per cent. to 5⅝ per cent. and the maximum prize from £1,000 to £100,000. All prizes are free of United Kingdom income tax and capital gains tax.The money used to purchase a £100 premium savings bond in 1956 would now have a purchasing power of £23·64.As regards the final part of the Question, the reinvestment of any prizes won by bonds would have increased the amount of the holding, but the award of prizes depends entirely on the luck of the draw and it is not possible to give any meaningful estimate of the value or frequency of prizes that might have been won.