You chanced it, and you actually won the lottery! You’re exploding with excitement, but you also have a million questions swirling around in your head about what to do next. That’s okay. All you need to do is take a deep breath and follow these steps.
What to do in the first few days
It’s perfectly fine to celebrate your lucky day – just keep the news to yourself for a bit.
When people come into a small fortune, they can often become overwhelmed by the attention they draw. But this is precisely the time when you don’t want to be the centre of attention. You’ll need to claim the prize first, of course, and then get some professional advice to avoid making any unwise decisions.
So tell as few people as possible for now, and definitely don’t announce the news on social media.
How to claim the prize
National Lottery winners in the UK have up to 180 days from the date of the draw to claim any prize they win. How to claim the money depends on where you bought the ticket, and how much you have won.
If you bought a lottery ticket online
Prizes up to £50,000. These are usually paid back into your National Lottery account or into the bank account you’ve linked with your National Lottery account.
Prizes over £50,000. You’ll need to call the National Lottery customer care team on 0333 234 4433 to arrange for your claim to be processed in person.
If you bought a lottery ticket in a shop
Prizes up to £500. These can usually be picked up from any retailer, at their discretion.
Prizes between £500 and £30,000. You can claim these at a designated post office or make an appointment at either the Watford (01923 425000) or Liverpool (0151 236 1796) National Lottery centres.
Prizes over £30,000. Call the National Lottery customer care team on 0333 234 5050 to arrange for your claim to be processed in person.
If you win big, you’ll be given an adviser who will come and meet you, either at home or, if you prefer, at either the Watford or Liverpool National Lottery centres.
You’ll need to fill in a prize claim form to give to the adviser and hand over the winning ticket so they can check that it’s legitimate. They will then complete all the necessary paperwork.
Once everything has been validated the money will usually be paid into your chosen bank account within 48 hours.
Do you want to stay anonymous or go public?
You’ll have a choice as to whether you want to keep the news private, or whether you want to share your story and accept publicity. This is totally up to you. If you do choose to go public, it might be wise to shut down accounts like Facebook and Twitter for a while. With all the attention you’ll receive, you don’t want people invading your privacy by browsing through your photos or sending unsolicited messages.
Consider a savings account for your lottery winnings
You may want to consider opening an account to spread out your money or simply to earn a higher interest rate. Here are some options to help you earn interest on your winnings.
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The longer you hold onto debt, the more interest you’ll accrue over the long run. Now is the perfect time to pay off everything you owe: credit cards, student loans, mortgages and more. It’s a responsible first step that will save you money over time.
Put some money into a rainy-day fund
You might be surprised by how many lottery winners end up broke. Whether through poor spending habits or plain bad luck, it’s easy to squander a large windfall. So plan accordingly and create a back-up fund.
A rainy-day fund is typically stocked with six months’ worth of your salary. Since you’ve just received a large sum of money, you may instead want to put a percentage of the windfall into an emergency fund.
Consider waiting a while before doing anything else
Once you’ve accepted the money, paid off your debts and created an emergency fund, consider doing absolutely nothing. Your winnings aren’t going anywhere.
In fact, many financial advisers recommend letting the excitement die down before taking any other actions.
For several months or even a year, consider living as you normally do. This will give you time to carefully plan out your next steps. For example, work with your financial adviser to determine how much of your windfall you’ll give to family and friends. You may even consider hiring a psychologist to help you deal with the emotions that come with receiving a large sum of money.
What to do in the long term
Now that you’ve taken care of your short-term needs, your goal is to protect your windfall for the long term.
The first thing you should do is get a financial adviser. You’ll be making some important finanical decisions and it’s really important to get independent guidance and recommendations from an expert.
Create an investment strategy
Put together an investment strategy with your financial adviser. This strategy should be consistent with your tolerance for risk.
To get your feet wet, you might first look at investments like short-term corporate or government bonds. These are considered relatively safe investments. Depending on the size of your windfall, you may generate a sizeable income off these “boring” investments alone.
After consulting with your financial adviser, you could expand your investment portfolio to include investments like stocks. Your financial adviser can help you create a portfolio with the right mix of stocks, bonds and other securities.
Start planning your estate
If all goes well, you’ll live the rest of your life without having to worry about money.
You’ll want your children and relatives to enjoy the same comfort, so begin the process of estate planning. In short, this means you’ll decide what happens to your assets when you die. Work with your financial adviser, an estate planning solicitor and a tax adviser to settle matters of your estate – preferably well in advance.
Frequently asked questions
Great news: HMRC doesn’t count lottery winnings as taxable, so you won’t have to pay tax on the money – yet.
However, if your lottery winnings take the value of your estate to over £325,000, you may be liable to pay 40% inheritance tax when you die.
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Anna Kierstan is an associate editor at Finder, specialising in money transfers and cryptocurrency. She has more than 15 years’ experience in publishing and journalism, working as an editor for brands including HSBC, Which?, NFU Mutual, Weight Watchers and AXA. She has a first-class degree in Linguistics and Philosophy from University College London and Masters degrees in Journalism and Translation. She likes to collect art and animals. See full bio
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