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Remember those ads?  You can play the lottery for as long as you like
and then get all your money back!  Well back then it was a trick, to
play you had to live there or pretend you did, but things have changed.

Read and learn how a lottery should be organized, how you can play, and perhaps ask your state to setup such a civilized game for you to invest in. RP

UK Premium Bonds ( a no-risk lottery?)

Someone recently me asked about UK "Lottery Bonds" and if they are still available in the UK? Yes they are and they are known in the UK as Premium Bonds.

The total Premium Bond fund paid in by investors is treated as a loan from the Bond Holders to the Government.

In most ordinary bonds, the Government pays each holder interest each year. With Premium Bonds, instead of each bond holder getting a few pence per pound in interest, the money that would normally be paid in interest, is divided into prizes that range from 50 to 1,000,000.

I suppose it could be called a form of "lottery" as there is a monthly draw, but it is not widely regarded as a lottery here in the UK.

PB's compare favourably with the UK National Lottery for the simple reason that your "stake money" is never at risk and you can get your money back in full any time you want. And, there are no penalties for cashing in Premium Bonds.

Individuals can hold a minimum of 100 bonds (100) or the maximum allowable by Law - 20,000 bonds (20,000) or any number of 1 bonds (in units of 10 ) within those limits.

Every Premium Bond issued has it's own unique ID which is made up of letters and numbers.

After the mandatory one month ownership, each 1 bond has a chance of winning a prize from a minimum 50 prize to a maximum 1 million prize - in a monthly draw. Several thousand prizes at various prize levels (including one x 1 million prize) are won by bond owners each month.

The randomly drawn letters/numbers are published every month and bond owners can check their unique bond ID against the numbers drawn.

Statistically, holders of 10,000 x 1 bonds (10,000) should receive prizes with a yield of more than 5% per annum. The added attraction is the good chance of cash prizes at high prize levels that 10,000 bonds should (statistically) produce over a one year period.

All prizes are free of CGT (Capital Gains Tax).

The downside - only one draw per month and there is no guarantee of a prize. Bond owners must be prepared to sacrifice capital growth and interest in order to gamble on the chance of winning one or more of the thousands of monthly prizes.

Unless sufficient prizes are won by the investor (say over a 12 month period) there would be no return either in terms of interest or capital gain. Also, inflation (at whatever %) will inevitably take it's toll on the original investment.

People who live outside the UK can buy UK Premium Bonds, but only directly from:- National Savings, Blackpool, FY3 9YP, England. Contact them and they will send you an application form. Premium Bond payments (investments) must be made by cheque drawn on a UK Bank. US citizens should check their local laws. If you want to and are legally allowed to buy UK Premium Bonds, then you should set up an account with a UK wired bank for transfer of funds.



Still interested? You'll find more information
here: U.K. Premium Bonds

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