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Annuity Lottery Games

An annuity lottery gives winners the chance to receive regular payments over a long period of time, rather than a one-off prize. Games such as Lotto and EuroMillions offer fantastic jackpots, but National Lottery bosses have recently been working on a plan to introduce a different type of game which provides a guaranteed income.

The new lottery is expected to give players the opportunity to be paid up to £10,000 a month if they land the top prize. Winners could therefore receive several million pounds over the course of their lives.

How Do Annuity Lotteries Work?

An annuity is defined as a ‘fixed sum of money paid to someone each year, typically for the rest of their life’. The idea of an annuity lottery may be unfamiliar to UK players, but other countries have been staging similar games successfully for years.

In the US, for example, Lucky for Life is played in many states. Players are required to select five numbers from 1 to 48 and one Lucky Ball from 1 to 18, and there are ten different ways to win. The lower prize tiers offer single payouts in the same way as a traditional lottery, ranging from $4 to $5,000, but the top two prize categories work differently.

Anyone who matches all the numbers will win the top prize of $1,000 a day for life, while anyone who matches the five main numbers without the Lucky Ball will receive $25,000 a year for life. There are cash lump-sum alternatives for players who would prefer not to take the annuity option.

Manalle Earnhardt, from Salisbury in North Carolina, won $1,000 a day for life in October 2016 after being bought a ticket by her father. “I don’t have to worry about retirement now. I don’t have to worry about college for my two boys, or all of these other things. It’s nice to know it’s taken care of,” said Earnhardt, who planned to carry on working as a nurse.

Australia’s Set for Life is another annuity lottery. Players who match eight numbers out of 37 win the top prize of AU$20,000 a month for 20 years. The other seven prize tiers are one-off payments for players who match fewer numbers.

A man from Fairfield in Sydney won the top prize in November 2017, just a month after he had started to play the game. He said: “There’s so many things I can do now - I don’t know where to start. I’ll still work but I want to open my own business and buy a house. It’ll be great for me and my family. It sets me up for the future.”

Benefits

An annuity lottery provides several advantages over a standard game in which the winner just receives a one-off payment:

Steady Income

Regardless of the size of a lottery jackpot, the danger of receiving it all in one go is that you might spend the lot. With an annuity lottery, there is no danger of running out of money as you know the next big payment is just around the corner, providing financial security for life.

Your Family is Financially Protected

The rules are different for each game, but in current annuity lotteries the payments will just switch to the family of a winner for a designated period of time if they die. In Lucky for Life, for example, the rule is that payments will be made for the rest of a winner’s life or for 20 years, whichever is longer. If a player passes away just ten years after winning the top prize, for instance, their estate continues to receive $1,000 every day for another ten years.

Fixed Jackpot Amounts

The prize stays the same for every draw in an annuity lottery. If a big EuroMillions jackpot is won, for instance, the top prize for the next draw is much lower.

In addition, if there are multiple winners in a game such as EuroMillions, the money is split evenly between all of them, whereas this only usually happens in extreme cases in annuity games and in most cases you do not have to share the prize with others. In Australia’s Set For Life, winners receive AU$20,000 a month for 20 years unless there are more than four winners in a particular draw. If that does happen, the prize pool of AU$20,000 a month will be split between all the winning players.

Odds

The chances of winning the top prize on an annuity lottery are usually far better than the odds of landing a jackpot on other games. The jackpot odds on Lucky for Life, for example, are about ten times better than those for Powerball, at 1 in 30,821,472 compared with 1 in 292,201,338. There are also multiple other prize tiers to boost your overall chances of winning a prize.