In order to encourage people to save again following the end of the second world war, Premium Savings Bonds went on sale from 1 November 1956.
The Lord Mayor of London, Sir Cuthbert Ackroyd, bought Premium Bond No 1, while the Lord Mayor of Liverpool was another to start the ball rolling. Over five million pounds were subscribed on the first day.
The first draw was held on 1 June 1957 with 23,000 prizes, the top one being £1,000.
Rather than earning interest, each £1 bond received a unique number and had an equal chance to win a prize in each monthly draw. The maximum investment at that time was just £500 and the maximum prize available was £1,000, which was a lot considering the average weekly pay was £10 a week.
To ensure that every £1 bond had an equal chance of winning a prize, the draw needed to be truly random. In order to do this, the team behind the Second World War code-breaker, Colossus, built the original ERNIE (Electronic Random Number Indicator Equipment) – which generated bond numbers. It was the size of a van and took 10 days to complete a draw.
ERNIE 2 was introduced in 1973 and was able to speed through 65,000 bonds an hour, reducing the time taken to complete the draw to just five and half hours.
ERNIE 3 was quicker still. It was also the machine responsible for picking the first Premium Bond millionaire when the new prize was introduced in 1994.
ERNIE 5 – launched in March 2019 – is powered by quantum technology which uses light to process the numbers and takes just 12 minutes to complete a draw.
Their popularity over the decades means more than one in three British adults hold them. Since the first draw, over 355 million prizes have been handed out with a total value of £17billion.
As of 2022, there were over 1.6 million prizes worth more than £63 million that remained unclaimed.