Tickets have gone on sale for the UK’s first “lifetime lottery” draw, offering a top prize of £10,000 guaranteed income every month for 30 years.
Camelot, operator of the UK’s National Lottery, will hold the first “Set for Life” draw next Monday. It said the concept of an annuitised prize “particularly resonated with younger people”.
The top prize of £10,000 was chosen as “a tangible amount . . . that people could really relate to in terms of their salaries”.
Camelot said that based on current tax rules and rates, all top prize winners — regardless of their tax bracket — would receive a minimum payment of £10,000 a month after tax. However, the prize payouts will not be linked to inflation.
In the UK, there is no tax to pay on conventional lottery wins. However, tax would be payable on any interest or investment income generated by the prize money.
According to the small print on the National Lottery website, if a winner dies before the 30-year payout period is up, “the winner’s estate will receive a lump-sum payment equal to the cost of the policy paid by Camelot, less any payments already made.” Depending on the winner’s financial circumstances, their heirs could be liable for inheritance tax on the lump sum.
However, finance experts cautioned that inflation could be a bigger issue for future winners to content with.
“Based on the Bank of England’s inflation calculator, £10,000 in 1998 would be worth just £3,706 30 years later,” said Andrew Hagger, founder of savings website MoneyComms. “This just highlights how much inflation can eat into your wealth over time.”
Camelot first revealed last autumn that it was developing a lifetime prize, against a backdrop of fluctuating sales.
The lottery operator has been “closely examining” the success of similar games in countries including the US, Canada and Australia. Lottery winners in the US often have the choice of taking a cash lump sum in one go, or an “annuity” that will be paid every year of their lives.
Camelot also pointed to the success of its Rich for Life scratchcards, sold in the UK between 2007 and 2012, “which were some of our best performing scratchcards at the time.”
Tickets for the new Set for Life game will cost £1.50, and prize draws will be held every Monday and Thursday.
To win the top prize, players will need to match five numbers between 1-47 and the “life ball” between 1-10.
Those who match only the five main numbers will win £10,000 per month for one year. Other combinations of numbers will be eligible for cash prizes between £5 and £250.
Multiple top prize winners will be allowed — the £10,000 annuity will not be split, as it is with the main Lotto prize draw. If nobody wins the top prize, it will not roll over.
Camelot said the odds of winning the top prize would be approximately one in 15.3m, and the second prize is one in 1.7m.