How much money would you need to receive in a lump sum in order for your life to be significantly changed? It's a thought provoking question, and in these uncertain times it may be much more than you realise.
Once you factor in things like a mortgage, debt and dependents, it’s likely that the figure you had in mind isn’t quite enough to make a meaningful impact on your life.
To find out more, we surveyed over 1,000 individuals across the UK to find out how much money would be required to have a noticeable impact on their quality of life. We also wanted to know the reasoning behind their choice, for example was it to clear debt, help out family or simply upgrade their car.
On Average, What Amount of Money Do People Consider 'Life Changing’?
Across the board the average amount of money that people considered to be life changing was a surprising £351,434.
The most popular amount of money that people selected was a whopping £1,000,000, and seems to be the sweet spot when people factored in their mortgage, dependents, outstanding debt and most importantly, the cost of them retiring at their current age.
“£1 million is enough to pay off your mortgage, student debt, start a new business and be financially secure for at least one decade.”
“It’s enough to pay off my mortgage, help the children get on the property ladder and have enough savings put away for the rainy day.”
Regional Differences - Do Londoners Request More Money? Apparently Not
Averaging the top 10 most popular answers amongst regions reveals some surprising insights:
● The West Midlands on average considered £343,610 to be a life changing sum of money, which was the least out of all the regions analysed
● Surprisingly, Wales requested the highest amount of money on average at a whopping £466,000! This could be due to higher debts and commitments overall, or they could just be a tad greedier than the other regions
● This is quite a gap on the 2nd highest amount requested, which was the North East who considered £391,100 to be a life changing amount on
● Interestingly, London had one of the lowest average amounts required to be
considered life changing at £358,760
There’s no real surprises here, with 18-34 year olds requiring the least amount on average at
£333,110, mostly thanks to outstanding debt and the desire to get on the property ladder. 35-54 year olds and those over 55 require much higher amounts in order for their lives to be changed at £406,000 and £451,000 respectively.
This is mostly due to wanting to support children and grandchildren:
“It would be enough to buy my daughter a house, put money aside if my granddaughter wants to go to uni, have nice holidays, make sure our disabled son is taken care of.” - Over 55
“It would be enough to pay off my daughter's and granddaughter's mortgages.” - Over 55
What are People’s Main Reasons?
From the word cloud above it’s clear to see the main deciding factors behind people’s reasoning. Debt, family, bills, mortgage and car are highly common words, as well as things such as ‘worry’ and ‘work’, in the sense that people wouldn’t have to worry financially anymore or may be able to give up work indefinitely.