When specialist financial firm Just Group asked more than 2,000 people whether they would rather take lottery winnings as a £1 million lump sum, £1,000 a week for life or a mix of the two, the results were surprising with some notable generational differences. Over half (53%) of ‘baby boomers’ – those aged over 55 – said they would like the £1 million and only one in 20 (5%) chose the £1,000 income for life with the rest (42%) preferring a mix of the two. ‘Millennials’ (aged 18-34) were four times more likely (19%) than the baby boomers to want the regular income and one-third less likely to choose the lump sum (37%) while the majority (44%) preferred a mix.
“It’s clear that while some people want the big cheque with lots of zeroes, others prefer the idea of a regular, guaranteed income,” said Stephen Lowe, group communications director at Just Group. “Younger people have to balance the immediate financial freedom given to them by a £1 million windfall against the long-term security offered by £1,000 a week for the rest of their life.” “What’s just as interesting is the appetite for a mix of lump sum and regular income with more than four in 10 of both age groups wanting a mix.
Whatever age, we all seem to see value in knowing we have the income to pay the bills – even if the worst happens – and perhaps Camelot are missing a trick by making these games either/or rather than allowing a combination of the two.” Participants in the ‘Set for Life’ lottery game will be fully committed to the prize of £10,000 a month for 30 years and Just Group’s research gives some ideas of how lucky winners may use the cash. Four in 10 respondents said that they would use the extra income to help family and friends while similar proportions said that they would either spend it on luxuries such as a car or renovations (39%) or use it to go travelling (39%).
“This was a light-hearted piece of research that we commissioned to shed some light on how people reaching retirement think about using their pension money now that rule changes mean they can choose to take lump sums, regular income or a mix of the two,” said Stephen Lowe. “An in-depth review by the financial regulator found many savers saw their freedom to take pension money as a ‘lottery win’. Our research suggests a real challenge for savers and their advisers to balance the desire for a cash lump sum with their need for regular income to cover the essentials in retirement.”
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