Saving money isn’t always easy, especially in today’s financial climate. It can often feel like every time you manage to put some money away, the boiler breaks, the car insurance is due and then the kids need money for school trips.
However, you don’t need to go without every month to make sure your money goes further. From Government saving schemes, to finding the bank accounts that can get the most out of your money, there are some really simple ways to get your savings on track.
We spoke to Susan Hannums at Savings Champion about the small but important changes we can make that will ensure a financially secure future.
1) Don’t dismiss current accounts
High Interest Current accounts offer rates well over and above what’s available on a standard savings account. These fantastic rates are only available on lower balances and conditions do apply, but they’re one of the best options for savers looking to maximise the interest earned.
2) Open a Regular Savings Accounts
If you’re looking to get into the saving habit, top paying Regular Savings Accounts could be just the ticket. You’ll get an even better rate if you have or open a current account with them, but remember that these accounts usually have restrictions on savings.
3) Move your money around
The wise approach is to spread your money between a range of products, from high interest current accounts to fixed rate bonds. This allows you to access a mix of the best rates available, and setting money aside in accessible accounts means you can move your money should better rates come along.
4) Be clued-up on the best rates
Check and track your savings rates! Providers will never tell you if you could be getting a better deal somewhere else. Register with the free Rate Tracker service to stay in the know and see where you could be doing better.
5) Low interest rates aren’t always a bad thing
Don’t be put off by low interest rates. It’s easy to think that there’s no point in moving your money if the rate isn’t that much more, but doing nothing plays into the bank and building societies hands. It’s important that the providers don’t take your hard earned interest, even if it’s only a 0.5% difference.
6) Take advantage of Tax free savings
The new Personal Savings Allowance came into force this April meaning that basic rate taxpayers will be able to receive up to £1,000 a year in interest from their savings. In addition, savers have a separate ISA allowance where up to £15,240 per year can be saved tax free.
7) Government incentives to buy your first home
The Help to Buy ISA offers a 25% bonus to those saving for their first home. You may put down an initial deposit of £1,000, and after that you can save up to £200 per month. The minimum bonus amount is £400, meaning you must have at least £1,600 in the account before you’ll earn the 25% bonus. The maximum bonus is capped at £3,000. You must use the money to buy your first home or you will lose the bonus.
8) Lifetime ISA to save for retirement
The Lifetime ISA will be available to anyone between the ages of 18 and 40 from April 2017, and is designed to help young people to save for their first home and/or retirement. Much like the Help to Buy ISA, the Lifetime ISA will give you a 25% bonus on funds up to £4,000 per year, until the age of 50. You can’t access the money and the bonus before the age of 60 unless it’s to buy your first home. Should you access before then, and not use it to purchase your first home, then you will forfeit the bonus and be hit with a 5% charge.
9) Do a budget planner
By working through your monthly out goings you’ll quickly see where you may be able to make savings or cut backs to allow you put some money aside. Make expensive annual events such as holidays and Christmas more manageable by dividing the cost up through the year so the saving becomes less of a financial strain.
10) Build your rainy day fund
For anything from the boiler breaking to job loss, it’s wise to have some cash to fall back on in the worse situations. As a general rule having 3 to 6 months’ worth of salary should shield you from some financial crisis but every little can help so what you can afford to put away is better than nothing.
BONUS TIP
For those looking for a managed savings service whereby the research, opening and managing of your accounts can be done for you, contact Savingschampion.co.uk and speak to one of the Concierge advisers for a free savings review.