logo
Are prize bonds still a good investment?

Are prize bonds still a good investment?

Irish Times06-07-2025
I have been a steady holder of
prize bonds
over the last number of years, and, together with winnings, have built up a fair amount.
A few months ago,
State Savings
changed their policy by introducing larger prizes each week. (€50,000 each Friday, with €500,000 on the last Friday of the month).
This has reduced dramatically the number of winners, and it has become like a lottery, except you do not lose your money! This has probably been further influenced by interest reductions.
State Savings also started to notify winners by email, as well as sending winnings by mail the following Tuesday/ Wednesday. I am disturbed to see emails used to be sent at 2.40pm
on the Friday, but now have become totally irregular, sometimes taking a few days.
READ MORE
As this prize-winning has become a lottery, are there independent observers as for the National Lottery, and previously with the Irish Sweepstakes? In addition, has the holding of brize bonds, lost its attractiveness?
Mr M.T.
Are prize bonds a good investment? That seems to be the kernel of your query. To be fair, your personal experience, at least until recently, appears to suggest they have been for you. I'm not sure that's a universal view.
Certainly, in recent years, prize bond investors have been voting with their feet and walking away.
Figures released a couple of weeks ago show that just shy of €351 million of new prize bonds were sold last year. That's a sharp 28 per cent fall on the previous year. That 2023 figure was itself down 20 per cent year-on-year and annual sales are now less than half the €735.7 million sold at the company's peak during Covid in 2020.
An even bigger number came from people selling their investments. Requests for repayment came to €538.2 million last year. That is up just over 1 per cent year-on-year but 90 per cent up over the past five years.
Having fallen for the first time in a decade in 2023, the overall prize fund fell for a second successive year. For all the company's guff about the figures 'reinforcing the product's long-standing appeal as a unique and secure savings choice', they're clearly worried.
The number of prizes awarded last year was up more than 53 per cent and that followed a 31 per cent rise the previous year. There was an even bigger jump in the value of those prizes – 89 per cent last year on top of a 51 per cent rise in 2023 – bringing them to a level not seen since 2012.
You talk about changes in the prize structure but those are not that recent. They date back to October 2023 and in fact the number of prizes on offer has increased sharply in recent years as you can see above.
The key factor affecting the number of prizes is not the headline figure for prizes at each level but the interest rate that determines the size of the prize fund. This is currently 1 per cent – hardly over generous but almost three times the 0.35 per cent rate that applied immediately before October 2023.
The other factor, obviously, is the size of the fund and that, as the figures show, is falling in recent years.
Essentially, 1 per cent of the fund is given in prizes each year. As the top prizes – €500 and above – are set, the real difference is in the number of €75 prizes drawn each week.
So, what are your odds?
With 713.6 million prize bonds in issue at the end of last year, your chances of winning a prize in any draw is comfortably more than 20,000/1 – on the basis of the minimum investment in bonds of €25 for four €6.25 bonds. Winning the weekly jackpot is a 178.4 million-to-one shot.
For comparison, the chances of winning the jackpot in the
Lotto
since 2015 when it was expanded to 47 numbers is one in 10.74 million – although, in fairness, as least you do not lose your stake with the prize bonds.
Clearly, the more bonds you hold, the better the odds, though they are still fairly daunting.
If you don't win, you do have the right to get your investment back at full face value but it will be worth less than when you bought those bonds due to inflation.
Inflation over the past five years in Ireland means that the €25 you choose to withdraw this year by redeeming that minimum level of prize bond investment is worth just €20.20 in buying power – barely 80 per cent of what it was if you bought those bonds back in 2020.
If you bought the bonds back in 2000, your €25 is worth just under €15 in terms of 2025 prices.
So for the hundreds of thousands of bondholders who do not win a prize, this is a poor investment.
If that gives the impression that I'm not a massive fan, you'd be right. Unless you are averse to taking any level of risk at all, you'd be better looking elsewhere. Even the risk-averse can get a better return on their cash with other State Savings options – unless they're lucky, and then we're back to the Lotto analogy.
Oversight
As to oversight, the Prize Bond Company is apparently a joint venture between
An Post
and
Fexco
to run the scheme on behalf of the State – or more precisely the
National Treasury Management Agency (NTMA)
, which is the State agency charged with managing the State's debt.
An official from the NTMA oversees each weekly draw, which is done electronically – with the numbers generated randomly – and the results of those draws are apparently then analysed by another company that specialises in statistical and data validation, according to the Prize Bond Company.
At the time of writing, the most recent draw was the last weekly draw in June when there were a total of 8,823 prize-winners who shared almost €1.24 million in prizes. Obviously this was skewed by the monthly €500,000 win. The prize fund in other weekly draws is just shy of €740,000.
Once a month (the final draw of the month), there is one winner of €500,000, as you say. Otherwise, there is a weekly winner of €50,000, 20 winners of €1,000 each, and another 20 who get €500.
After that there is a much larger number of winners of €75. How many precisely is based on the size of the price bond fund. As of now, it is 8,781 winners each week.
Prizes are paid into your bank account if that is the option you have chosen or, as a default, used to purchase more prize bonds.
Part of the issue, especially for people with small holdings of prize bonds, is that they are passive investments, rarely looked at. The Prize Bond Company does notify winners by post and, more recently, by email but if you have not updated your details with the Prize Bond Company – and especially if the bonds were acquired before email details were relevant – any information about winnings may have gone to a long-irrelevant address and the bin.
This is especially true, I'm guessing, for people who were not active buyers of bonds but who received them instead as gifts from family.
Clearly, that group does not include you but, for other readers, that is why it is important if you own prize bonds to make sure the operators have your correct details. You can find and download a change of address/change of name form
here
.
What happens any unclaimed prizes? After six months, they are put in a special fund of unclaimed prizes. A winning bondholder can still claim that prize at any time. At the end of last year, there was €3.4 million in unclaimed prizes.
That might sound like a lot but when you consider that €45.6 million was issued in prizes last year alone and that the unclaimed prize fund dates back to 1957, it's clear the vast majority of prizes do find their way to the bond owners.
You can check with the Prize Bond Company by phone or online and the site also has a Check My Numbers feature although this can be a little more finicky.
So is it worth the investment? The bottom line is that the State is paying just 1 per cent 'interest' for 'borrowing' the money you pay for the prize bonds. And unless you're a winner, you're not even getting the benefit of any part of that 1 per cent.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to
dominic.coyle@irishtimes.com
, with a contact phone number. This column is a reader service and is not intended to replace professional advice
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

‘Things have gone noticeably downhill': a Dubliner on 30 years living in Germany
‘Things have gone noticeably downhill': a Dubliner on 30 years living in Germany

Irish Times

time2 hours ago

  • Irish Times

‘Things have gone noticeably downhill': a Dubliner on 30 years living in Germany

Stephen Hurley has been immersed in the German language since the age of five, when he attended St Kilian's German school in south Dublin. He thanks his polyglot father, who finished his academic career as professor of organisational psychology at DCU, for the decision to expose his children to European languages as early as possible. It was to pay off handsomely when Stephen moved to Germany in 1996 to work for the Irish Dairy Board – now rebranded as Ornua . Along the way, Hurley took a bachelor's degree in science at UCD, followed by a master's in food science. He developed a keen interest in marketing rather than science at this time, leading to his first role as a sales rep for Green Isle Foods, when it launched its Goodfellas range of pizzas in the UK market. 'It was a great experience, and exciting, as we were all new to our roles,' he says. 'I had a huge territory in the English midlands. The launch was a big success and within a year we were brand leaders.' READ MORE When a position in Europe at the Irish Dairy became available, Hurley applied. The role was for the Benelux region but during the recruitment process he was introduced to the company's German division because of his fluency in the language and ended up being posted there. Almost 30 years on, he's still there and is now marketing manager for the Kerrygold brand. 'Some would say I am now fully assimilated,' he quips. 'I manage the Kerrygold brand in Germany in terms of positioning, media, packaging, PR, online presence – everything around how the brand is presented to the market.' The operation he joined in 1996 was a team of three but Ornua's headcount in Germany is now more than 300. Germany makes a significant contribution to the company's global turnover of about €3.5 billion a year. Kerrygold was launched in Germany 1973 and is the brand leader in its category. Brand recognition is very high and it is held in high regard as a premium brand, says Hurley. 'If you ask people what Kerrygold is, they will say it is the good butter. It delivers on its promise in that it tastes good and is very spreadable. It's not just a brand.' Butter and dairy spreads remain the main drivers of volume, but cheese is now a significant part of the brand portfolio too. The train service has developed a poor level of punctuality Kerrygold launched at a very advantageous time when the Greens were very strong in Germany, and its brand story of cows reared outside and eating grass, with a very high level of care for the animals, resonated strongly, he says. 'About two in three people in Germany could be described as flexitarians in that they eat less animal products, but better ones. Consumers care what they eat, and they are concerned about the environment, and about how animals are kept and what animals are fed. 'The way of farming in Ireland is very different from the way it is in Germany. Issues of sustainability may have slid away from attention lately because of concerns about wars and global instability, but they remain important factors in people's minds here.' A keen hockey player when he was younger, Hurley joined a club as a way of meeting people when he moved to Germany, through which he met his wife, Sabine. The couple have recently become grandparents. Home is in the city of Krefeld, in north Rhine-Westphalia, northwest of Düsseldorf, a short commute to Ornua's German headquarters. When he moved to Germany, Hurley was impressed with the infrastructure and apparent efficiency compared with Ireland at the time, but the years since have altered this perspective. Long years of austerity policies and underinvestment have seen infrastructure standards decline alongside a decline in education. Ireland is now more advanced than Germany in many ways, he says. 'Germany now has a very poor telephone infrastructure. Most of the bridges crossing the Rhine here are in a state of disrepair. The train service has developed a poor level of punctuality, bureaucracy has exploded and everything is incredibly slow. Things have gone noticeably downhill.' The construction industry is experiencing problems, with employers finding it hard to fill apprenticeship roles, and this is affecting competitiveness. 'Because they have limited numbers of skilled workers and concerns about continuity, builders, plumbers and electricians have got picky and choosy about the work they want to do and prices gone up consequently,' he says. People won't greet each other and will avoid eye contact Germans are inclined to paint things black and look back to better days, but the reality is that things are not that bad. Living standards are very high for most people, and the economy is large and robust, he says. The hope is that the recently installed government will deliver on its ambitious investment promises and improve infrastructure. Hurley says that in his home city, he lives entirely 'within the German cosmos', although he has some Irish friends in Düsseldorf. 'It's very important to speak the language if you want to really become part of German society and to be understood and understand others. I am fluent – which is a great advantage.' Germans have become less formal in recent years, he says, but are still reserved. 'People won't greet each other and will avoid eye contact. In Ireland you can strike up a conversation with a stranger in a bar. That doesn't happen often here.' Contrary to what many people think, however, the Germans do have a sense of humour, he says. 'You can't slag people off here and assume that they will find that funny, but they do have a black sense of humour. Germans famously love punctuality, but the reality is sometimes different. The trains don't always run on time these days, so there's many jokes made about that.'

Is Ireland ready for drab Soviet-style apartment blocks?
Is Ireland ready for drab Soviet-style apartment blocks?

Irish Times

time5 hours ago

  • Irish Times

Is Ireland ready for drab Soviet-style apartment blocks?

In the postwar years, a rapidly urbanising Soviet Union embarked on a mass construction programme. It built standardised, mass-produced, cheap, drab blocks of apartments intended as temporary for 20-25 years. Typically floor areas were just 30-40sq m (equivalent to three standard parking spaces). Led by Nikita Khrushchev, they became known as Khrushchyovkas. This week, Minister for Housing James Browne issued new apartment standards that resurrect the old Khrushchyovkas as the urban housing ambition for 21st century Ireland. It is now possible to build entire blocks of 32sq m studio bedsits with no limit on the number of residents sharing a corridor or lift. Up to half of these homes may have no private amenity space. On urban sites, communal outdoor space is negotiable, and on larger schemes developers can design out playgrounds and childcare facilities . Local authorities may no longer require space to be set aside for laundry, clothes-drying, gyms, community or cultural use. There is no transparency about where these standards originated, and they came into force immediately without public consultation, pre-legislative scrutiny or a regulatory impact assessment. Almost a Trumpian executive order, the suddenness and absence of transition arrangements have brought uncertainty into the entire sector, risking delays, additional costs and, inevitably, legal action. It seems in direct defiance of the Department of Finance's recent warning that 'in order to attract private capital, policy certainty is key'. This uncertainty is more likely to shake confidence than to 'get apartment building moving'. A new Planning Bill – as yet unseen – is to be rushed through, putting in doubt current planning applications, local authority development plans, statutory housing needs and demand assessments, and indeed forecasts for infrastructure capacity. READ MORE So are these changes justified? The Minister claims savings of a 'an average of €50k and up to €100k cost reduction per unit', although no calculations are provided. His own department's most recent figures for urban apartment development indicate hard construction costs of almost €180,000 (incl VAT) to build a 37q m one-person studio. On this basis, cutting 5sq m from the structure would only save about €3,500 (incl VAT) (€615/m2 structure costs + VAT = €698x 5 = €3,490 structure costs) given no reduction in other hard costs (kitchen, bathroom, windows, doors, heating, plumbing, electrics, etc). In all likelihood any potential savings would be wiped out within months on redesign, tender inflation of 3 per cent annually and finance. [ Government measures designed to drive apartment building are 'not as effective in practice as envisaged' Opens in new window ] The Minister may believe that squeezing more smaller apartments into the same building will result in lower unit costs. Evidently, a studio for one person will be a cheaper unit than an apartment for two, three or more. Without the evidence, this seems more spin than worked solution. We might hope that developers and investors won't buy into these lower standards. Experience tells us otherwise. When lower standards for build-to-rent apartments and co-living were introduced, it wiped out the 'viability' of urban build-to-sell which was marginally less profitable. Consequently, investment funds now control more than 17,000 new rental apartments, according to figures reported in the Business Post, while only 943 were sold in Dublin, Cork, Limerick and Galway cities in the last six years, CSO figures show. In response to these changes, many investors will pause to assess whether the uncertainty, disruption and legal risks are worth it. So how might they jump? Let's imagine an apartment block of 100 units with permission for 50 two-bedroom apartments, 25 one-bedroom and 25 studios. Using typical rents for new-build apartments in Dublin, our 100-unit scheme could generate a rent roll of €275,000 per month (gross). However, replacing it with 178 small studios could bring in €370,000, a 35 per cent increase. This is certainly enough to send many back to the drawing board. But regardless of how – or when – they jump, this week's announcement gifted all residential landowners a new profit (on paper) from increased development potential. Land is valued on the 'residual' of the end value less the development costs. When the future rent roll increases, it brings up the current land value. This windfall is now booked on the balance sheets and baked in, eventually to be paid in higher rents and mortgages – in one stroke both worsening the 'viability' of larger apartments, and widening the affordability gap. So how many people could be housed in these newly configured buildings? Taking, our example above, a permitted block of 100 apartments can now squeeze in 178 studios. Good news for the 'supply target' with a 78 per cent increase in units on the site. Unfortunately, not so good for anything else. Small units are very inefficient: a block of 178 studios can only legally accommodate 178 people, whereas the same space laid out as 100 apartments can house 275. In fact, the larger 2016 Dublin City Council standards could comfortably fit more than 300 people in a mix of units -all with decent, flexible living conditions, suited to couples, families and sharers. So, in our example, for the same development cost and the same drain on limited construction resources, Browne has incentivised 78 per cent more units, but housed 41 per cent fewer people. Bizarrely, his initiative may give us poorer quality homes while taking longer and costing more. Browne says that he is 'prepared to take risks'. Perhaps consider these risks – of regulatory capture; of rejecting evidence-based plans and democratic processes; of further inflating land values; of incentivising a glut of over-priced substandard homes; of ignoring the 50 per cent of households with children; of believing that squeezing out a washing machine or space for a pram will tip the balance of international financial markets in Ireland's favour. Ireland's speculative housing system has legacies of boom and bust, planning irregularities, ghost estates, low standards, over-inflated values, market crashes and deep recessions that are both recent and painful. We are still paying the price for the last time developers were left to decide what to build, where, and at what quality and cost. In this complex ecosystem even seemingly minor decisions are not without major consequence. If his new Housing Minister doesn't see the risks, Taoiseach Micheál Martin surely should. Orla Hegarty is an assistant professor at the School of Architecture, Planning and Environmental Policy, UCD

Retailers deny price gouging as farmers warn high prices are the new normal
Retailers deny price gouging as farmers warn high prices are the new normal

Irish Times

time6 hours ago

  • Irish Times

Retailers deny price gouging as farmers warn high prices are the new normal

The surge in food prices in recent years is the 'new normal' and a consequence of more sustainable farming practices and tighter regulation rather than a temporary aberration, a leading farming group has warned. And retailers have insisted they are not profiteering at the expense of Irish consumers, their margins modest and grocery inflation in the State low by European standards. Data published by the Central Statistics Office (CSO) on Thursday points to a year-on-year price increase across the food and non-alcoholic drink sector of 4.6 per cent. However, in some areas, including meat and dairy, the price hikes are in double digits. According to the CSO, butter, which sells for around €3.99 a pound for own store brands and €5.49 for Kerrygold, is €1.10 more expensive than this time last year. READ MORE Other dairy basics have also recorded substantial increases, with shoppers paying, on average, 95 cent a kilo more for cheddar cheese and 27 cent more for a litre of milk. [ Price of grocery staples running well ahead of general inflation Opens in new window ] The latest increasers come on top three years of food inflation that have added in excess of €3,000 on to many households' annual bills, with no prospect of relief on the horizon. Denis Drennan of the Irish Creamery Milk Suppliers Association (ICMSA) told The Irish Times that it was 'more than a little irritating to be listening to politicians expressing amazement and concern about the surge in food prices when those same politicians seemed to have no problem at all voting through measures often directly responsible for heaping up higher costs on the farmers and processors producing that food.' He said regulations that now 'completely set the context for farming cost money, and what's really irritating – certainly from ICMSA's view – is the implication that, somehow, the farmers should have absorbed the increased costs out of our income, out of our margin'. He warned that the increases consumers have faced in recent years are not 'any kind of 'price spike' or aberration' but were 'the new normal'. [ Irish people more concerned about cost of food than counterparts Opens in new window ] 'Getting the food of the mandated standard to the fridge of your local supermarket has a cost – economically and environmentally – and that cost has to be paid,' said Drennan. He pointed to what he described as 'a decade or more when consumers were allowed to believe in the fantasy that all the change and astronomical expense involved in transitioning to low-emissions farming and primary food production was going to happen from the supermarket fridge backwards to the farm without any change or cost to the consumer. That was just a fantasy, and we now see the consternation when consumers realise that, actually, everyone is going to have to pay more for the new system.' Drennan also pointed to data which suggests that previous generations 'spent more than twice what we are [spending] as a percentage of the average family's disposable income. Irish consumers are not overpaying now; the data suggests they've been underpaying for decades and are only now starting to get a glimpse of what their food really costs.' Arnold Dillion of Retail Ireland, the Ibec umbrella group that represents supermarkets, said margins in grocery retail were low, with recent price increases 'overwhelmingly due to cost increases further up the supply chain'. He said that despite an increase in inflationary pressures in some categories, 'Irish food inflation trends remains below the EU average', and he pointed to a 2023 report by the Competition and Consumer Protection Commission (CCPC) which stated that the Irish grocery market 'remains highly competitive'. He suggested that the Irish market was 'highly competitive, profit margins are tight, and pricing decisions are primarily shaped by external cost pressures. The financial information in the public domain confirms that Irish grocery retailers are not earning abnormal profits, and are operating in full compliance with legal and regulatory standards.'

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store