A lump sum of £1 million is the threshold that would let people to give up their day job for good, and live in financial comfort for the rest of their lives.
According to research from LV= the £1 million figure to stop working is consistent across different age groups, with the only exception of over 55s who say they would give up work for good if they came into £500,000.
Before putting the rest of their windfall into savings, 48% say they would buy a property, and 37% would go on holiday or travel the world. 31% say they would clear outstanding debts such as loans and credit cards, and a similar number (30%) would give a sizeable sum away to friends, family or charity.
18% also said they would buy a new car.
Receiving a windfall is currently how many Brits hope to fund their retirement, with nine million Brits (24%) yet to retire relying on some form of windfall to finance life after work.
One in ten (3.6 million) people say they hope to win the lottery to fund their retirement, with 7% of people relying on an inheritance, and 5% hoping their home will increase substantially in value so they can use the equity.
Those on higher incomes and, in theory more able to save, are in fact nearly twice as reliant on a windfall to fund their retirement as those on lower incomes. 37% of people earning more than £40,000 a year are looking to a windfall to secure their financial future, versus 23% earning under £40,000. Even 15% of those closest to retirement (55 and over) say they are banking on a windfall of some kind to fund their twilight years.
People say they would need £23,132 each year to live comfortably in retirement, with those in their 20s saying they would need £25,785 a year in retirement to live a contented life.
Ray Chinn, LV= head of pensions and investments, said: “£1 million seems to be the magic number that people would give up the day job for at any age, but reality takes a little more financial planning than keeping your fingers crossed. It’s shocking that such a high number of people are actually hoping for a lottery miracle to fund their life when they stop working. With odds of 14 million to one for winning the National Lottery, and 76 million to one for the EuroMillions, unfortunately it probably won’t be you.
“Despite over two-thirds of people (70%) expecting to have an underfunded or severely underfunded savings pot by the time they retire, or simply having no idea what they’ll have, people are failing to put a plan in place. Although retirement planning can seem daunting, you can improve your financial prospects for retirement by taking matters into your own hands. Seeking professional financial advice about savings and funding retirement will have a huge impact on how comfortably people can live before and in retirement.”
