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Not playing the lottery could have saved you £4,500

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Written by: Emma Lunn
19/11/2019
Investing your weekly Lotto stake for the past 25 years, instead of buying a ticket, could have left you with £14,000.

The first National Lottery draw was on 19 November 1994 – making it 25-years-old today.

Back in 1994 there was only one game, costing £1 a week. Since then several games have come and gone and a few ones have stuck, while the successful ones have multiplied. If you played Lotto, Euromillions, Set for Life and Thunderball each week it would cost you £16.

Assuming you played these games every possible time since launch, you’d have spent more than £8,000, according to Hargreaves Lansdown.

If you’re averagely lucky, given the current odds and fixed prizes, you might have expected winnings of about £3,500.

But if you had put this money aside every game instead, and invested it in a stocks and shares ISA holding a UK tracker fund, your investment would be worth more than £14,000.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “After 25 years it seems we still can’t resist the thrill of a potential life-changing win. It seems that we don’t care that the odds are vanishingly small, or that we regularly read how a windfall has ended up doing more harm than good.

“Lottery sales have been up and down, but largely because of competition from other forms of online gambling rather than any sudden realisation that we’re throwing our money away.

“But in reality that’s exactly what the vast majority of players are doing. And over the years it really adds up. In 25 years you would have spent over £8,000, and if you were averagely lucky might have expected to win back just over £3,500, which would leave you around £4,500 worse off.”

The National Lottery vs Premium Bonds

If you put the money into Premium Bonds, when you lose, you get to keep the money you’ve paid in – so it’ll be entered into every single draw until you take it out.

These multiple entries mean you get more than 790,000 attempts to win a prize over 25 years.

With average luck, and assuming prizes are around their current level, you would have won just over £900 over the past 25 years.

However, because interest isn’t paid on Premium Bonds, unless you have a big win, your money will be eroded by inflation. Over this period, the money you paid in would have lost around £1,200 of its spending power – so taking inflation and average prizes into account you’d be about £300 worse off.

“If you’re averagely lucky, therefore, you would lose less money than you would through the lottery, so on average Premium Bonds are a better way of losing less money,” said Coles. “Nobody opts for the Lottery or for Premium Bonds in the hope they’ll be averagely lucky. They’re in it for the distant hope of getting rich overnight. If you only have £1 in the game, the odds on winning a million are dramatically worse in Premium Bonds at 1 in 40.99 billion – compared to 1 in 7.5 million in the Lotto game.”

However, if you’ve been building up your payments for 25 years, you’ll be entering bonds worth more than £8,000 each month. It means you have around a 1 in 5 million chance of winning a million on Premium Bonds – whereas in Lotto it’s 1 in 7.5 million,

“They’re both ridiculously slim chances, but they remain distant possibilities,” added Coles.

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