Get rich quick

By NEIL SIMPSON
Updated:

 

AT last, the secret of getting rich quick is out - buy Premium Bonds. The latest three monthly winners of the £1 million prize all waited less than 12 weeks between buying their bonds and hitting the jackpot.

National Savings & Investments sent its incognito 'Agent Million' to Tyne and Wear to present the big tax-free cheque for October to someone who had bought the lucky bond in July.

September's winner, from Yorkshire, also bought the stake in July. And in August, the £1 million winner, from Surrey, had bought the winning bond only two months earlier.

So is it time to rush out and buy Premium Bonds in the hope of a quick win?

Many people clearly believe it is. Sales are at an all-time high with £4.75 billion in the year to April and more than £3 billion sold since then.

The maximum holding was increased from £20,000 to £30,000 in May and more than 50,000 people have already bumped up their stake in bonds to the limit. Yet while the big winners are getting lucky fast, worrying changes are around the corner.

At present, Ernie - the Electronic Random Number Indicator Equipment, which generates the winning numbers from its base near Blackpool - pays 2.25% of the total invested in monthly prizes. Next month that will be cut to a record low of a paltry 2.15%. However, National Savings claims it is still a good deal.

Its bond expert, Jonathan Ackerman, says: 'The odds of winning a prize in each draw will stay at 30,000:1 in November. And the drop in the payout level is far less than July's cut of a quarter-percentage point in the Bank of England base rate, which it reflects.'

HE adds: 'If you have average luck and hold the maximum number of bonds, you still stand a good chance of winning a prize a month.'

Ackerman also rejects claims that Ernie favours recent buyers over long-term holders. He points out: 'More bonds are being sold, so it's little wonder recent numbers come up so often. But old ones still win. This month someone who bought £10 of bonds in 1958 was one of the two £100,000 winners while someone who had £40 of bonds from 1959 won £5,000.'

Nine- year-old Harriet Underwood is one modest bondholder who has seen a big return on her investment.

Her parents, Mark, 39, and Tracy, 37, bought Harriet £100 of bonds when she was left some money by her aunt as a baby. Less than four years later, she won £500, which the family, from Tettenhall, West Midlands, spent on bonds for Harriet's brothers, Benjamin, 5, and Samuel, 3.

Mark, an independent financial adviser with Wolverhamptonbased Torquil Clark, says: 'It turned out to be a better return than she could have earned with a building society or on the stock market.'

Mark says Premium Bonds are an ideal short-term home for spare cash. 'You know you can get it back on demand, but you might get lucky in the meantime,' he says.

'All you are giving up is the interest from a savings account, but this is now so low that people are prepared to make this sacrifice in the hope of winning a big prize.'

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