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What Is a Lottery Annuity?
Most lottery prizes arrive as a single lump sum — but an annuity prize works differently, paying out in regular instalments over time. Here’s what that means.
How an annuity prize works
Instead of one big payment, an annuity prize is paid in scheduled instalments — typically monthly — over a fixed period. The winner gets a steady, guaranteed income rather than a lump sum to manage all at once.
The UK’s annuity game
Set for Life is the UK’s annuity lottery. Its top prize is £10,000 a month for 30 years — that’s £3.6 million in total — and the second prize is £10,000 a month for one year. The monthly structure is the whole appeal.
Tax and trade-offs
Annuity payments are tax-free, like all UK lottery wins. The trade-off versus a lump sum is flexibility — you can’t generally cash out the full amount upfront. See the Set for Life prizes, how lottery winners are paid and the Set for Life lump-sum question.
Frequently asked questions
What is a lottery annuity?
A prize paid in regular instalments over time rather than as one lump sum.
Which UK game pays an annuity?
Set for Life — its top prize is £10,000 a month for 30 years.
Is annuity income taxed?
No — UK lottery winnings, including annuity prizes, are tax-free.
Related guides: the Set for Life prizes, how lottery winners are paid and the Set for Life lump-sum question.