What do Lottery Winners Really Get in Their Bank (Around the World)

At a certain point in their lives everybody dreams about winning the lottery. Despite many cautionary tales that claim that the vast majority of the lottery jackpot winners go broke in a shockingly brief time and that their lives somehow end up even worse than they were before winning the lottery, each one of us is confident that they will be the exception that will know how to handle the vast, life/altering lottery prize.

Except, just how huge is the potential jackpot? Out of the sum they supposedly win, how much money do lottery winners actually get in the bank? Is that sum the same or even similar worldwide?

Let us take a closer look.

At the moment of writing this article, the most significant potential win comes from the USA, namely the Mega Millions national lottery with a potential jackpot of 429 Million USD. However, this premium is variable, just like the PowerBall lottery with a jackpot that currently stands at 134 Million USD though it has reached six hundred million dollars several times in the past.

Over in Europe, there is the Euro Jackpot with a starting win of ten million euros while Euro Millions have a starting point of seventeen million and the Spanish lottery El Gordo offers a starting jackpot of five million euros. In the United Kingdom, Lotto would be your best bet as it has a starting jackpot of five million pounds.

If all of this seems too good to be true, that is only because it is. Many of these lotteries do not have a guaranteed jackpot - instead, a certain amount of the pot is transferred to the next round. And even if you do win, you will have to deal with the local laws, fees, and taxes - and we all know that paying taxes is where the real fun is, right?

So, let's stick to the countries mentioned above - the USA, European Union, and the United Kingdom and see how much the states cut in all those winnings.

In the US of A, you can choose between getting the lump sum in one go or opting for the annuity option. Suppose you win the Powerball jackpot - in this case, the lump sum you would be able to work with is not 1.5 billion, but merely $930 Million. If you choose annual installments, they will be spread across 29 tears and the sum you will end up with is the aforementioned $930 Million plus the interest accumulated during the years. Whichever option you choose, will put you in the highest tax bracket possible, which means that you will have to pay 37 percent in taxes. So you would start with 1.5 billion advertised and end up with $585,900,000 after paying taxes.

To make matters even worse, each win above $5000 is subject to heavy taxation of 24 percent.

Things are not much better throughout the EU - what you win is far less than you might think. The only upside is that for most European countries lottery tax is at a fixed twenty percent. So, you will not lose as much money to the government as you would in the USA.

In the UK, the lottery tax might seem nonexistent - as the lottery is considered a form of gambling it is tax-free - until you choose to put your money in the bank or give it to someone as a gift. If you put your earnings in the bank you will be charged income tax on the interest from your savings. The same goes for any investments that you make using the money that you won.

Finally, any money that you win playing the lottery is the subject of inheritance tax in case you pass away and someone inherits your winnings.

While these laws might seem the least strict, remember that they apply to UK residents only so do not try to use a website to play the UK lotto from somewhere else in the world and expect that the same rules and regulations will work for you.

So there you have it - no matter where you are in the world there is no way to avoid paying taxes on your winnings one way or another. Besides, the jackpot is always smaller than advertised. And yet, it would be so nice to win a lottery jackpot, wouldn't it?