Gamblers’ savings programs around the globe

Washington State finance professor John Nofsinger has read Nudge and is posting choice architecture examples at Psychology Today. He plugs savings programs that come with a gambling twist (ie. people who commit to saving a little bit of money are eligible for some serious cash and prizes in a lottery). In a previous post on one of these programs, one blog reader brought up Irish Prize Bonds. Nofsinger gives more details on a similar U.K. offering, Premium Bonds.

These programs have existed for centuries internationally. The longest running program may be the Premium Bond in Britain, started in 1956. The bonds require a £100 minimum purchase and make the purchaser eligible for monthly prize drawings. The excitement of gambling is maintained as more than 1 million prizes are given at each drawing. Prizes range from two £1 million prizes to more than a million £50 prizes. Over £30 billion of savings are held in Premium Bonds by one quarter of British households. Programs in Central and South America give away cars and equivalent prizes daily with larger lotteries drawn monthly. The Million-a-Month-Account program was started by First National Bank in South Africa in 2005.

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