How To Make The Most Out Of Your Savings

Unsure of what to do with your savings? Don’t worry - you’re not alone. That’s why we’ve created this simple guide with eight tips to help you make the most of your money.

Whether you’re saving for a big event, trying to build a nest egg for the kids or just want to start investing, you’ll find some useful ideas here.

  1. Build a Reserve
    To avoid going into debt when you receive an unexpected bill or find yourself without income temporarily, it is a good idea to have a pot of money set aside to allow you to cope. The exact amount will vary depending on your circumstances, but having enough to cover you for 1-2 months expenditure is a good benchmark to aim for.
  1. Make Sure You’re Saving In The Right Way For You
    There are different benefits to each different type of savings account, whether that’s fixed term accounts, regular savers, easy access accounts or more specialist accounts such as the Lifetime ISA. Make sure you know what you want from your savings account to ensure you get the right one for you.   For example, if you’re going to need your money for a purchase, don’t put your money in a fixed term account where there could be penalties for early withdrawal.
  1. Set Goals
    Starting to save can be made easier by setting goals for yourself. You can decide to save a certain amount of money by a specific date or for a particular event. This will give you something to work towards and keep you motivated, especially the closer you get to reaching it.
  1. Set an Amount, Set a Date
    Agree a specific date with yourself to add money into your savings account each month, perhaps the day you get paid. This will help keep you accountable for making regular deposits into your account. This does not have to be a large amount - think carefully about what you can afford - but keeping consistent with your deposits will help you make the most out of your money. Regular savings accounts often benefit from better interest rates from too.
  1. Use Your Full ISA Allowance
    ISAs are the only savings accounts that offer tax-free interest, making them one of the most efficient ways to earn extra money on your savings. There is an annual limit to how much you can deposit into your ISA that runs with the financial year from 6th April – 5th April. It is worth noting that every basic rate taxpayer can receive £1,000 interest tax free a year through the personal savings allowance so if you were planning to save up to this amount in an ISA, there may be other accounts which are more suitable.

    If you want to know more about utilising your ISA allowance, we have a guide on how to make the most out of your ISA.
  1. Stay On Top of Your Fixed Term Accounts
    These accounts have a fixed time period or ‘term’. Once this expires, your interest rate will change from the agreed rate at the start of your term. When your agreed term is coming to an end, make sure to contact your bank or building society to find out what is available to you going forward.
  1. Don’t Leave Your Money Idle In a Current Account
    Current accounts often don’t offer very high interest rates. If you have money sitting idle in a current account, it might be better invested in a dedicated savings account, earning you more interest on your savings.

    There are a number of ‘best buy’ tables in newspapaers and comparison websites which are an excellent resource to find the most rewarding accounts currently.
  1. Start Saving For Your Kids
    Help to develop a saving habit in your young ones with a children’ savings account. It’s a great way to make sure they’ve got a nest egg if they ever need it on approaching adulthood. We have specific Junior ISA products designed to help kids start saving. We also have a guide on saving for children if you want to know more.
  1. Get Expert Advice

    If you have a large sum of money, perhaps through inheritance, you may want to speak to a financial adviser instead of just investing it in a savings account.

 

Hopefully you found this guide on how to make the most out of your savings useful. However, if you have more questions, don’t hesitate to get in touch. You can also find out more information about our different savings products on our savings section.