Lotto losers are £4,000 poorer
WE ALL dream of scooping the jackpot and becoming a millionaire overnight. And in 25 years of the National Lottery, more than 5,500 lucky ticketholders have done that.
But new figures reveal just how costly chasing that dream can be, and how that money could have been better spent.
If you have played the game every week since its launch on November 19, 1994, you will have spent £1,625. Yet if this money had been invested, you would now have a pot of around £4,000 today, according to investment platform AJ Bell (based on an annual return of 5 pc after fees).
Now there are more games on offer, including EuroMillions and Thunderball. If you had played every game possible since their launch, you’d have spent more than £8,000, according to Hargreaves Lansdown. But had you invested £8,000 in a stocksand-shares Isa instead, you’d now likely have a £14,000 pot.
The first National Lottery in the UK draw did not make any millionaires. Instead, seven winners shared the top prize and each took away £839,254.
If they’d invested their prize money, it would now be worth £2.9million today (with a 5 pc annual return). But millionaire status is not what it used to be. Sarah Coles, personal finance analyst at Hargreaves, says while lottery winners spend an average of £900,000 on a new home, new millionaires should not buy one they cannot afford to maintain.
She says a sensible response to a £1million windfall would be to pay off any debts first, then treat yourself and your family using up no more than £100,000, and also put aside £50,000 as a cash reserve.
Meanwhile the rest could be invested: £700,000 would generate an annual income of £24,500 with a return of 3.5 pc. b.wilkin[email protected]lymail.co.uk