We are a nation of misled gamblers

The Government is allowing many of us to unwittingly fall for get-rich-quick schemes according to an online survey by Fool.co.uk.

The survey of 1,500 Fool.co.uk readers shows that many people will risk their money without actually knowing the odds. One in two people own Premium Bonds but, worryingly, 50% of people who buy these do not consider it gambling.

The findings also revealed that Premium Bonds were not nearly as popular as lottery tickets. Whilst one in two people who took part in the survey said they own Premium Bonds, three out of four people admit to at least occasionally buying lottery tickets.

However, as with Premium Bonds, people do not perceive the lottery as a gamble either. Six out of 10 people who religiously buy weekly lottery tickets are adamant that they are not gamblers. That increases to seven out of 10 people who only buy lottery tickets when a rollover jackpot is on offer!

David Kuo, Head of Personal Finance at Fool.co.uk, says: “We have some strange notions about what constitutes gambling in Britain. Consequently, the Government needs to heed the call by eight out of 10 people to include the risks of gambling in the school curriculum. This is vitally important as the Government has backed plans for the first super casino in the UK.

“But for now, the most perturbing aspect of the survey is that 50% of the people who own Premium Bonds do not perceive it as gambling. Premium Bond holders are forfeiting better rates elsewhere in the hope that luck may protect their savings from the ravages of inflation.

“In some instances luck may help, but the vast majority of Premium Bond holders, especially basic-rate taxpayers, will be badly disappointed. Currently, the tax-free return of 3.6% will only benefit lucky high-rate taxpayers, and basic-rate taxpayers are being ripped off by the artificially low prize fund.

“The Government can do more to encourage consumers to save, and the popularity of Premium Bonds is a good place to start. But it must do more by lifting the cynically low prize fund, which is damaging people’s wealth without many consumers realising it.”