Save those pennies! Helpful tips for your savings strategy


If you’re starting to feel that you’ve spent too much this summer, it’s probably a good time to take a look at your savings strategy. However, with so many savings options available, where do you start? This week, we give you the lowdown on various ways you can save – read on…

“The way to build your savings is by spending less each month.”

Suze Orman

Simple, right? Yes and no… It is pretty obvious to most that spending less will increase your savings. And yet, we all have outgoings, such as mortgages to pay and a lifestyle to lead. Before we look at ways to save, here are three top tips for checking your spend:

1. Check your bank accounts for any direct debits you might’ve forgotten about – for example, old magazines or online services, etc. Get rid of any unwanted outgoings.

2. Check your credit card statements and pay off any debt – there’s no point in paying high-interest costs on outstanding amounts. This money could be going into savings.

3. Check whether you are better off overpaying your mortgage to off-set any interest. For example – if your mortgage rate is higher than the savings rate, overpaying your mortgage could be a sensible financial decision. However, penalties may apply, so always seek professional mortgage advice.

Now let’s look at the different accounts and financial products out there, which can help you make the most of your money…

Savings accounts

Do you have various bank accounts? Do you have a lot of money sitting in a current account rather than a savings account? Do you know the interest rates for all your accounts? High street banks tend to have lower interest rates, so it may be wise to switch to a specific account offering a higher interest rate.

For example, a Fixed-Rate Savings Account will guarantee you a rate of interest for a set period of time. Unfortunately, this also means your cash will be locked away until the stated time, which may or may not be helpful. But, if you are happy to save in this way, interest rates for a Fixed-Rate Savings Account can be as high as 2.2%, but this rate would mean locking your money away for 3 years.

If you are happy to stick to rigid terms and conditions, you could consider a Regular Savings Account. This type of account has a high rate of interest, possibly as much as 5%. However, you will be expected to pay money into this account every month, you may have a limit on withdrawals, and there may be other conditions that apply too – carefully check any terms.

Tax-free ISAs

ISAs are still a very sensible tax-free way to save. The ISA limit for this tax year (2017/2018) is £20,000. The main advantage of an ISA is the fact you don’t pay tax on any interest on your savings. There are Cash ISAs, Stocks and Shares ISAs, Help to Buy ISAs and, if you’re under the age of 40, the Lifetime ISA. The government incentivises people to save in ISAs by offering bonuses – for example, a 25% bonus is added by the government for a Lifetime ISA. See our detailed blog on ISAs for more information on the different types and benefits.

Pension check

Your pension should form part of your long-term savings strategy. Usually, you will be sent an annual statement: check the level of income matches the lifestyle you want to lead in the future. Recent pension freedoms have enabled people to access their pension at the age of 55; this can be both useful and risky. If you need help understanding your pension, talk to one of our financial planners who can review this for you.

Consider investing

If you do have various pots of money sitting in different accounts, you could look at investing your savings. There are hundreds of investment options out there: the main aim is to make your money work for you rather than stagnating due to low-interest rates. You will need to decide your level of risk and the type of investment you would like to make, i.e. stocks and shares, trusts, bonds, etc. For more information, see our A-Z of Investment blogs.

Investing is a very complex area and can be very time-consuming. However, you could potentially reap great returns. We always suggest spreading your risk and choosing multiple fund options – this is known as ‘diversifying’. Talk to one of our financial planners for advice on investments.

“Why not invest your assets in the companies you really like? As Mae West said,

‘Too much of a good thing can be wonderful’.”

Warren Buffett

Ultimately, the earlier you start on your savings journey, the more rewarding your destination will be later on in life. Whether you’re aiming for a comfortable retirement or you’re planning an extended luxury cruise, making the most of your money early on will help you to enjoy financial freedom. What’s more, an ongoing solid savings strategy will allow you to live your life to the full in the present, and not just the future…

If you are looking for a sensible savings strategy, please get in touch to speak with one of our financial planners. Our team will be more than happy to carry out a review of your existing savings to see where we can add value for you.