Money pours into prize bonds despite cut to weekly winnings
People are pouring money into prize bonds despite three cuts in the prize funds.
Sales of the bonds shot up by 35pc last year to €475m. This was up from €352.6m worth of bonds that were bought in 2012.
There is now close to €2bn invested in prize bonds, which are sold by the State as a way of raising money.
This is the largest amount raised from prize bonds in the 56-year history of the scheme, Prize Bond Company chairman John Daly said yesterday.
The surge in sales is despite the chances of prize bond holders winning some cash being slashed for the third time at the start of the year.
The National Treasury Management Agency (NTMA), which has overall control of the scheme, reduced the number of weekly €100 prizes from 500 to 250 in January.
This was the third cut to prizes in a year. Last summer, the top €1m prize was changed from once a month to once every second month.
And in January 2013, prizes were changed to provide for 500 weekly prizes of €100 and 8,200 prizes of €50. Previously, there had been 10 prizes of €250 and 9,000 prizes of €75.
Mr Daly said the prize structure had been changed during the year in response to declining interest rates in the savings market in general. Banks have been cutting the interest rates that they pay savers every month for almost two years now.
Mr Daly confirmed that the €1m prize was changed from every month to every second month and the value of the lower-value prizes was changed from all prizes at €75 to some at €100 and others at €50.
He admitted that the value of prizes awarded was €35.2m, down by 23.6pc on 2012 due to the reduction in the size of the prize fund, which is reflected as an interest rate.
"Despite interest rate reductions during the year, the increase in the number of prizes issued ensures that customers continue to win prizes, providing a return on their investment," he said.
"The surge in sales is also attributed to prize bonds being an increasingly popular option in a changeable investment environment with the combined uniqueness of security, retention of investment with opportunity to win prizes and easy access, making it an attractive investment option for many."
At the end of 2013, unclaimed prizes accumulated over the past 56 years amounted to €2.19m.
But the Prize Bond Company said this represented less than 0.5pc of the value of prizes that have been awarded since the launch of the prize bond scheme in 1957.