Halifax to take on Premium Bonds with prize draws

The Halifax Savers Prize Draw is the first new product to be launched under Lloyds’ chief executive Antonio Horta-Osorio’s multi-million pound revamp of the brand.

It is the first time a UK bank has offered a monthly cash prize, although similar schemes have proved popular in the US, Australia and New Zealand.

Halifax group director David Nicholson said: “Customers want extra incentives to save in such a low interest rate environment.

“We offer the benefits of Premium Bonds and a savings product rolled into one. It’s Premium Bonds with interest.”

Halifax promised that savings rates on the new accounts will match normal savings rates.

“This is a real incentive to get Britain saving. It’s absolutely where Halifax comes from,” said Mr Nicholson.

The odds of winning a prize will depend on how many customers sign up, but they are expected to be higher than with Premium Bonds, where each £100 has a 240 to one chance of winning a prize. Unlike Premium Bonds, Halifax will also pay interest.

Michelle Slade, spokesperson for financial analyst Moneyfacts.co.uk, said: “While the lottery idea is a good idea in principle, the chances of customers winning are likely to be low. Savers would be better off opting for the best rate possible for their savings needs and if this happens to be Halifax then they can get the bonus of the prize draw.”

Under the new Halifax scheme, savers with £5,000 or more will get a chance to win three £100,000 prizes, one hundred £1,000 prizes and a thousand £100 prizes every month.

Savers, new and existing, have to register to be eligible for the prize draw.

This can be done in a Halifax branch, over the phone or online. Savers can register now ahead of the formal launch on October 3.

The first prize draw will take place in December.

Mr Nicholson said the scheme will cost £6m a year to run and the tax-payer backed bank will pay for the scheme out of its customer budget.

Simon Kenyon, Halifax’s director of savings, said: “The draw is designed to shake up the savings market and reignite a savings culture.”

Customers must be 18 or over and only one entry is allowed per customer, irrespective of how much money they have in savings.

The scheme is designed to appeal to the average adult UK saver, who typically has £5,957 in savings.

Mr Nicholson said Halifax started researching the market 18 months ago. The overwhelming response was customers want prizes to encourage them to save at a time of historically low interest rates.