Congratulations, you’re a lottery winner! Whether it’s a few thousand or you’ve won the jackpot, it’s worth knowing what to do if you win the lottery in the UK. Coined as “sudden wealth syndrome”, sometimes the outlook for lottery winners isn’t as rosy as you would think. We look at the challenges and share some tips to help you manage your winnings.
Nowadays there are plenty of different lotteries, including the National Lottery, Euro Millions, and the Postcode Lottery. Each one has its own set of rules and procedures regarding how your winnings will be paid to you. It’s important to seek professional financial advice before moving your newly acquired money into seemingly attractive investments and savings schemes. The last thing you will want to do is jeopardise your newfound wealth.
Lottery winners’ checklist
Our essential checklist will help you make informed decisions about your lottery win:
- How will my lottery win be confirmed?
After you have double-checked your numbers, you will need to claim your prize. Depending on the size of the prize and if you bought the lottery ticket online, the amount might be paid directly into your bank account. There will be a number on the back of physical lottery tickets that you can call. If you have won a large prize, the relevant lottery office will normally phone you to advise you of your win. - Who do I tell?
This has to be your own personal choice. Camelot, who manages the National Lottery, give you the right to anonymity. Publicising your win could lead to begging letters or even create security issues, especially if you have won the jackpot. It’s not uncommon for winners to experience a breakdown in relations after telling friends and family. Loved ones may start coming to you for financial support. Read more… - What do I do with the money?
You’ll need to decide on an account to pay in your lottery win. Choose somewhere safe and secure, as this will give you more time to look at your options. Rash decisions made in the heat of the moment could have disastrous long-term consequences. Emotions will be running high, so think carefully beforehand. We recommend a deposit-based account with a good interest rate. Read more… - How can I use my money?
This is entirely your decision. If it’s a lifechanging amount of money, then you could look at paying off all your debts. You might choose to spend your winnings on a new home, car or a luxury holiday. You will need to decide what you would like to do in the short, medium and long term. Saving and investing your winnings wisely could enable you to become financially free for the rest of your life. - What if I need more time to decide?
As the famous Louis Armstrong song goes, you have all the time in the world to decide how to use your winnings. The only concern would be the fact that the Financial Services Compensation Scheme will only protect a high balance in your bank or building society account for up to £1 million for 6 months. You could divide your money into different accounts – speak to our financial planners for advice.
If you would like to know more, we have a dedicated guide for lottery winners available to download for free. Just provide your email address and it will land in your inbox straight away:
Make a financial plan for your lottery win
A life-changing lottery win means you’ll need specialist advice. There have been cases where people have won millions, only to find themselves bankrupt a few years later. Living a life of luxury comes at a high price, and it’s all too easy for people to become accustomed to their new lifestyle. Without careful planning, your money could run out sooner than you think.
Whether your priority is to share, protect or grow your winnings, every step will need managing carefully.
If you’re in that lucky position, book a free consultation with our financial planners to discuss your concerns and find out how we can help. Our team will recommend a secure, short-term home for your winnings until you’ve decided what you would like to do. Click the button to get started.
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Emotional burden of winning
Winning a large sum of money will put pressure on you, your partner and your family and friends. Relationship dynamics will inevitably change, as you start living a new lifestyle. It’s been known for people to become depressed after winning the lottery. And depression can lead to excesses, such as out of control spending sprees and substance abuse. Marriages can breakdown, resulting in costly divorce settlements and people finding themselves alone.
Many celebrities complain about not knowing who they can trust, and this can apply to lottery winners too. Are people acting friendly because they want to know you or benefit from your wealth? This can be a factor in whether you decide to tell people about your lottery win. In many cases, it might be more prudent to only let those you really trust know you’ve won.
Sources:
https://www.thisismoney.co.uk/money/investing/article-10848695/What-happens-win-big-lottery.html
