The Premium Savings Bonds (Amendment etc) Regulations 2004

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Premium Savings Bonds Regulations 1972. There are two main effects of the amendments. First, the new provisions inserted by regulation 4 enable the Treasury to change the prize fund interest rate and the scale of prizes at any time without giving notice, so as to override any requirement in the terms and conditions applicable to Premium Savings Bonds to give notice of such changes. Second, the amendments made by regulation 5 provide that payments in respect of a bond will be made a) by crossed warrant, b) in any way stipulated in the terms and conditions that apply to the bond, or c) as directed by the Director of Savings. (It is intended that payment by cash (that is, uncrossed) warrant will no longer be available.) But payments may also be applied, if the customer so wishes and the Director of Savings consents, to purchase other National Savings and Investments products or to make a deposit with the National Savings Bank. These Regulations also amend the terms and conditions applicable to Premium Savings Bonds by providing that the Director of Savings may choose to publish the serial numbers of winning bonds on the National Savings and Investments website rather than in the London Gazette.

These Regulations also repeal parts of section 54 of, and Schedule 18 to, the Finance Act 1968 (which set the terms under which Premium Bonds are issued) to the extent necessary to allow the changes mentioned above and to allow for the purchase of bonds without the need for an application to be in writing.

A full regulatory impact assessment has not been produced for this instrument as it has no impact on the costs of business.