Please note that this post is a sponsored post in collaboration with Lottoland.
Winning the lottery is something that many of us have dreamed about, checking off our lottery numbers and scooping up the jackpot prize would change our lives in more ways than one. However once you’ve cracked open the bubbly, what do you really do with your winnings?
Aside from helping out your friends and family, buying property and going on holiday abroad, how would you invest £1 million to ensure you have a stable financial future? There are plenty of stories out there of people who have won millions of pounds that end up skint a few years down the line. Although with some planning, you can avoid their fate and invest your lottery winnings wisely.
Invest in property
It may seem obvious to invest in property, as it’s the first thing for many people who win the lottery will look into. It’s a great opportunity to put a roof over your head while cutting out the years of saving and scrimping and the hassle of mortgages. It may seem extremely attractive when you win a huge sum to spend the whole million on a luxurious house with a pool and a bar, however it is important to look at the running costs of the house, and if it is beyond your means to find £5,000 for bills in years to come – don’t do it!
You should also think about the location of the home, and if you are likely to move again or if it is your forever home. And with a larger house comes larger bills. Buying property helps to secure your future and ensures you have assets to pass onto your loved ones when it comes to inheritance.
Invest into your pension
Putting money into your pension offers security when you are older and as you cross the retirement age threshold. Lots of people who receive a windfall make the decision to stop working however this means that your employer won’t pay into your pension anymore, which ultimately means neither will you.
The longer your leave your tax free pension pots, the more time it allows the returns to build up, which will allow you and your family to have a much more comfortable retirement.
Invest in stocks and shares
With interests rates so low at the moment, it almost doesn’t seem worth holding your money as cash, as it won’t be generating much return for you. Although investing in stocks and shares is a slightly risker option, as you aren’t always guaranteed to get the full amount back, you are better off investing your money with a chance of big returns.
In the tax year 21/22, the ISA allowance is £20,000, which means that you can invest this amount and interest you make from interest on that is tax free. If you are unsure about how stocks and shares work, you could hire a broker for you who will know what they are doing so there is less of a risk of you losing any money.