Consumers walk away from prize bonds as company reports negative sales for 2023

Prize bonds have fallen out of favour with negative net sales last year for the first time in many years despite a 50 per cent rise in prize money.

The Prize Bond Company DAC said sales of prize bonds hit at a “strong” €489 million in 2023 as the value of the fund “reached” €4.65 billion. However, those figures mean that sales were down 20.6 per cent on the previous year when €615 million in new prize bonds were sold.

Meanwhile, repayments to people who decided to cash in their prize bonds jumped 46 per cent to €532 million, the company disclosed as it published its annual report. The figures mean there was a net outflow of just under €43 million in the amount invested by Irish consumers in prize bonds.

The overall value of the prize bond fund fell for the first time in at least a decade.

Sales of prize bonds have been declining consistently since 2020 when they hit €735.7 million during the pandemic. The sales for last year show a decline of one-third over that time.

Meanwhile, applications for repayment have been rising steadily over those same years, with the demand for repayment now 90 per cent up on the 2020 figure.

The company, which administers prize bonds on behalf of the National Treasury Management Agency (NTMA), said some 309,685 prizes were awarded last year, a 30.9 per cent increase in the financial year. The monetary value of prizes was €24.1 million, an increase of 50.9 per cent.

The company said 2023′s sales figures underlined the long-standing appeal of prize bonds as a secure savings choice among retail customers, who each week have the chance to win prizes while retaining the value of their holdings.

More than 9,000 prizes are awarded weekly with a weekly jackpot prize valued at €50,000 and in addition a jackpot prize of €500,000 in the last weekly draw each month.

The Post Office remains the primary point of sale for prize bonds with about 51 per cent purchased via the network in 2023, although that figure is falling. Online sales rose to 21 per cent, from 19 per cent in 2022.

“The opportunity to win prizes remains a defining feature of the prize bonds product and part of its enduring popularity. I am encouraged to see an increase in the usage of our self-serve online services, a convenient way for customers to view and manage their holdings,” said Debbie Byrne, who chairs the Prize Bond Company.

At the end of 2023 unclaimed prizes – prizes not claimed after six months – decreased to €3.3 million from €3.4 million at the end of 2022. This represents a small portion of the value of prizes awarded since the launch of the scheme in 1957, the company said.

Unclaimed prizes are held indefinitely until claimed by a bond holder and every prize winner is contacted at the address last registered with the Prize Bond Company.

The unit price of a prize bond is €6.25 with a minimum purchase of four units, at a total cost of €25. All eligible prize bonds enter a weekly cash draw.

The prize bonds are part of the wider range of State savings products offered to retail customers by the NTMA. While the Prize Bond Company is a joint venture between An Post and Fexco, all money is placed directly with the Government under the management of the NTMA.