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Chapter 1: What is the main topic discussed in this episode?
Welcome to This Is Money podcast sponsored by Trading 212. Download the Trading 212 app and open a cashizer with promo code TIM to get the 12-month bonus promo rate of 4.76%. Terms apply. I'm Georgie Frost and joining me and Lee Voice today is Helen Crane. And coming up, the question dividing Britain. Not whether to get a fan or air con. We'll get to that later.
No, a £1 million lump sum or £1,000 a week for life. Which would you choose? Also today, savings rates rising, energy bills are too, and exploding cars? Don't be getting so up to date with all the latest breaking money news. Just go to thisismoney.co.uk or download the app. But first, it's the sort of... theoretical question you might discuss with your mates down at the pub.
Well, Lee, Helen, no alcohol being consumed, but if you won the lottery and had the choice, would you pick a million pound lump sum or take a thousand pounds a week for life? Now, that was a question posed to nearly 7,000 Brits by pollster YouGov recently, and it's fair to say opinions were somewhat divided. It got people talking on X...
This is when he looked into this with the help of a few savings experts. But before we get to what they say, I absolutely know what I would answer to this. But Lee, Helen, what would you answer?
Hi, Georgie. Can I just say, when I saw this on social media, it had that, do you remember that white dress, gold dress thing where some people saw that it was a white dress, some people saw it as a gold dress? Yeah, yeah, yeah. The whole of the internet was divided according to news reports. And that was about 10 years ago. It gave that vibe. Do you know what, Georgie?
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Chapter 2: Would you choose a £1m lump sum or £1,000 a week for life?
When I looked at this, my brain first of all said, £1,000 a week for life. I was like, that sounds like loads. And surely after a certain amount of time, I hadn't done the maths. After a certain amount of time, it's going to take over the one million pound mark.
Then my sanity came in and said, of course, you would take the one million pound lump sum and I would take the one million pound lump sum.
Ellen? Yeah, I agree with Lee, actually. When you first see this question, you kind of think, how many years of life have I got left? Yeah. I was, oh, I'd like to think I've got quite a few. So maybe the £1,000 a week would work out. I actually worked it out and it would take 19 years of £1,000 a week to get a million pounds.
But in your sort of mental maths, obviously I can't do it that quickly. So I think I also thought £1,000, but that, no, you're like, Leah's right. You should take the million. Think about returns. That's the point, isn't it? Like you have a huge lump sum, you can start returns on it straight away. But I don't know, just every week it's great, wouldn't it?
Imagine that every Friday it just dings into your account. Very exciting.
So exactly, this is the question that faces many people, I suppose, when they reach retirement. Do you take the money and invest it? Do you take annuity? What would you do, Georgie? I have been thinking about this. For me, I would definitely take the £1,000 a week, just knowing that I had that security for the rest of my life, because £4,000 a month is a very, very decent wage.
would be excellent. I don't think I would like the pressure of investing, certainly, or looking after one million. I think there are too many issues with where you put the money. Also, is now a good time to sort of invest it all? They say don't invest it immediately. So then what do you do in the meantime? There are too many decisions that I just don't want to make.
So I would just like the security of a thousand pounds a week, even though I'm the oldest person here. I don't think of it like, would this add to a million? Yeah.
Georgie, I'm here to guide you and to change your mind almost instantly.
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Chapter 3: What do the poll results reveal about public opinion?
Persuade me, Lee. Persuade me. Firstly, why were they asking this question?
Well, it was just a YouGov poll. It wasn't for a company specific. It was just a question that they asked Britons. And I think it's one of those questions that they kind of put out there for some social media traction. And also because it is a bit of one of those things that you kind of,
You think there's an obvious answer, and there is an obvious answer once you've thought it through, but sometimes you reply to things almost instantly. So you talked about being at the pub. You might have instantly said an answer, then thought about it a bit more, had a few pints, and gone, no, actually, no, that's the answer. But you're with the young'uns, actually.
You're with the young'uns, Georgia, in this 7,000 poll, because it was a real split. 55% of people would take the £1 million lump sum. 41% would take £1,000 a week for life, and the rest didn't know. That's a pretty equal split, really. But 18 to 24-year-olds, 26% would take a lump sum and 66% would take weekly. And then 25 to 49-year-olds, it was 43% would take lump sum, 53% would take weekly.
50 to 64-year-olds, 64% would take lump sum, 32% weekly. And then 65 plus, 80% would take lump sum, 17% weekly. Now, the divide in Asia is pretty obvious, isn't it? The older you are.
the less likely you are to make that 19 years to add up to a million pounds but there's two things you really need to you would factor in on this and actually this would be such a beautiful problem to have wouldn't it georgie and i must admit from time to time very occasionally um i played the lottery um especially euro millions if they do one of those bumper ones where they're giving away loads of
The one million pound prizes and there's like 10 of them or whatever. I sometimes do that. So I think the odds are extremely long, but they get a little bit shorter on those prizes when they do that. And I start to mentally spend the money, you know, what would I do with it? Holidays, family, friends, you know, whatnot. You start to mentally spend what you would do with that money.
And I think we all potentially do that from time to time. Now, the first thing I'm going to do to convince you to say a million pounds lump sum is the correct answer is you're totally right. Actually, sometimes having big pots of cash, it sounds lovely on paper, but it can be quite confusing where to put it to make sure your money is protected and splitting it around.
And of course, sleepless nights, you know, worrying where that money is. You know, you don't want to be scammed. You don't want to be this, that and the other. But so the financial services compensation scheme is up to £120,000 per bank.
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Chapter 4: How does inflation affect the value of £1,000 a week?
putting a fan and just sort of you know really going to town on the heat which she she has said this week that there's a heat wave about 400 times and she oh bless her what she's been doing you know like um like ice packs you get uh you know if you get an injury you've got a couple of those like gel well ice packs she's been swapping them around and making sure there's always one in the freezer and then she uses it and sets up a fan and puts out and i'm like
Oh, man, like you are not going to be able to cope with a heat wave in the future. We've been doing what we call a family passeggiata, which is Italian for an evening stroll, which is, you know, in Italy, you know, especially Italian cities, they don't tend to have gardens or they have very small courtyards.
And that's why you see people really well turned out in an evening going for a stroll around their local neighborhood. We've been making passeggiata. a cool thing in my little pocket of estates George we're making it happen we've been strolling around at sort of seven o'clock well looking good dressed well me and my crocs we're having an evening stroll Lee stop being posh
Having an evening stroll around the little country park. And it's very, very nice. And I love the heat. I love the hot temperatures. And I think sunny days are a blessing. But yeah, we keep cool by doing things at home. Like, you know, we've got a south-facing garden. And the difference between the front of the house and the back of the house is drastic.
So, you know, if you want to cool off, the living room is really cool because it's at the other end of the house. So naturally, with small children... We just bung him in there for the hot hours, especially this week being half term. And it's absolutely fine. And you keep the curtain shut on that kind of south-facing side. That helps keep out some of the heat.
And basically, we've all got our ways of keeping cool. Essentially, it's not as bad as what we make out. I think sometimes other countries look in and it's that classic, oh, the Brits have got a heat wave again. Oh, they're all sort of struggling. Georgie, I'm still on that central line with my wool suit jacket on. I'm a gentleman. I never take it off. Yeah, I refuse. I'm here.
Absolutely right, Lee.
You've got a jacket on now.
It's 40 degrees on the central. Like BBC reporters of old. It's 40 degrees on that central line, but I am sweating it out in here. It's my version of some hot yoga. It's absolutely fine. It's all good, Georgie. It's all good. Enjoy the sunny days when they're here, people. And if you've got an inexpensive fan, you use it until your heart's content. It is not going to bankrupt you.
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