How to spend lottery winnings: a simple plan for UK winners

The short answer

Most big lottery winners move house, buy a new car and look after their family. Very few buy yachts. The winners who spend their lottery winnings best wait a few weeks, clear their debts, keep the money safe and set a clear budget for fun.

Your win is tax-free in the UK, but the interest and investment returns it earns are not. See our guide to tax on lottery winnings for the details.

What lottery winners actually buy

The National Lottery has surveyed its millionaires several times since it started in 1994. Here’s what they found.

• Houses: Most winners move, but not far. Of those who moved, 65% stayed in the same town or village, or within five miles.
• Cars: A new car is the most common first buy. Audi was the top brand in a 2012 study, and Range Rovers are still a favourite.
• Hot tubs: Almost a third of millionaires in the 2012 study put in a jacuzzi.
• Holidays: The US is the favourite trip. In 2018, 53% said they spent more on experiences than on things.
• Yachts and personal chefs: They turn up in the odd winner story, but none of the surveys lists them as a common buy. Most winners keep their lifestyle closer to home.

Clear expensive debt first

• Start with credit cards and overdrafts. They often charge 20% or more.
• Then personal loans and car finance. Check for early repayment fees first.
• Your mortgage is a closer call. If your rate is low, an adviser may suggest keeping some money invested instead.

Keep big sums safe

The Financial Services Compensation Scheme (FSCS) protects up to £120,000 per person, per banking licence, if a bank or building society fails. Spread larger sums across different banks, and check first, because some bank brands share one licence.

Be wary of anyone who contacts you out of the blue with an investment idea after a win. Check any firm on the FCA register before you hand over money.

Get a plan from an adviser

For a large win, speak to a regulated independent financial adviser. They can help you with:

• A cash buffer that covers a few years of spending.
• ISAs. You can put up to £20,000 a year into them and the growth is tax-free. From 6 April 2027 the cash ISA part falls to £12,000 for under-65s.
• A will, if you don’t have one. A big win makes it much more important.

Helping family and friends

• Decide who you want to help, and by how much, before anyone asks.
• Give rather than lend. Loans to family often go unpaid and cause bad feeling.
• You can give away £3,000 a year, plus gifts of up to £250 to as many other people as you like, with no Inheritance Tax impact. Bigger gifts can count towards Inheritance Tax if you die within seven years.

Set a budget for fun

You’re allowed to enjoy it. Pick a clear amount for the house, the car and the trips, keep it separate from the money that keeps you secure and stick to it.

Want to see how a jackpot could be split? Try our win planner in Tools. This guide is general information, not financial advice.

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