Saving should be more than just putting money away for a rainy day. Setting yourself a goal will help you get there faster. Here are some of our top tips on saving.
Knowing what you’re saving for and how long it will take to get there is essential to becoming a smart saver. Having a timeframe helps you focus on how much you can afford to put away and how often, to be sure you’ll hit your target.
Don’t forget the detail when you’re setting your goals. If you’re saving for a holiday, for example, you’ll need to have enough by the date you need to pay rather than the date you travel. And if you’re buying a car, there’s always added extras, such as insurance and road tax.
If you can afford to do it, putting money away regularly – even if it’s not a lot at first – can help your savings build up. To make it easy you can set up a regular transfer from your Current Account to your Instant Access Savings Account.
If later on, you find you can put away more, you can increase your regular savings online. And if you’ve got any money over at the end of the month or been paid that hard-earned bonus, you can also top up your savings account. Seeing your savings grow over time may give you added motivation – particularly the closer you get to your goal.
Once you've achieved your goal, you might want to set a new savings target. After all, you've now got the ‘savings habit’ so you can make the most of it – and your money.
Why not try and make a habit of saving?
Nobody knows what’s round the corner. So a savings safety net can be a comfort. Start an emergency fund in an instant access account to cover 3-6 months of outgoings.
Once you’ve got enough in an instant access account to cover 3-6 months, you can start putting money into a fixed term account where you can earn higher interest.
To encourage saving, various governments have put in place some incentives that mean you won't have to pay tax on any interest you earn on your savings up to certain limits. So why not make the most of it? You can use a cash ISA and not pay tax on the interest, as long as you stick to the terms of the account. This makes it a good place to start saving – particularly for the longer term.
You can also take advantage of the new Personal Savings Allowance. This allows you to earn up to £1,000 in interest if you're a basic rate taxpayer or £500 if you are a higher rate taxpayer, without paying tax on it. Interest from ISAs doesn't count towards your Personal Savings Allowance because it is already tax free.
You don’t have to put all your savings into one type of account. You can mix instant access and fixed term accounts to match different goals. Choose the best savings option for each goal and its timeframe. This way you can maximise the interest you earn while saving. The longer the fixed term, the higher the rate is likely to be. But don't forget to factor in how quickly you may need to get your hands on your money.
Our money habits can be set by the age of seven, according to research. Setting a good example and encouraging children to start saving regularly can help build good financial habits for the long term. Saving for something special could also give your child a real sense of achievement – particularly if it’s something they’re really excited about.
One of our moneyboxes is a good place to start saving the pennies. And once just £1 is saved you can help your child open a Young Savers Account. There’s a great incentive to save regularly too by joining the Magic Money 5 for 5 Club.
Our Savings Promise means that existing Savings customers are never offered lower rates than new customers. You will always be on the best rate we have available.
Save when it suits you and take money out when you need it with our Instant Access Savings Account.
If you’ve got a lump sum of £500 or more to put away that you won’t need for a while, a Fixed Term Account could be just the thing.
It makes sense to protect your savings from tax so why not choose one of our fixed term or instance access ISAs?
With online banking you can sweep your spare cash into a savings account whenever you want. For some people, payday means put-away-day, removing what they want to save from their current account so that it doesn’t get spent. For others, it’s a case of saving what they've got left over. It's simple to do what suits you best with the flexibility of online banking. And whatever you put in, it’ll begin building up.
And so you don’t mix up money for your Christmas prezzies with your summer getaway fund or dream car, you can set up different accounts with different names, helping make your goals come alive. Your “Christmas Party Account” starts here!
Since 6 April 2016, you can earn up to £1,000 a year on your savings tax-free if you pay the basic rate of tax, and up to £500 a year if you pay the higher rate of tax. This is called your Personal Savings Allowance.
Interest on your savings is now paid without tax being taken off.
Interest from cash ISAs is already tax free and doesn’t count towards your Personal Savings Allowance. There's a set limit every year to the maximum amount you can save in an ISA – but there's no limit to how much you can save in an ordinary account.
No. When you put money in a fixed term account you agree to lock it away for a set period of time, called a term. You should only open a fixed term account when you have enough money to cover emergencies in an instant access account.