In partnership with the Financial Services National College (FSNC).
If you’re hoping to be able to retire by the age of 55, we have sobering news for you.
According to research by the Pension Review Service (PRS), a 30-year-old with dreams to retire in their mid-50s and live the good life will need to save £12,000 - £1000 a month – to accumulate a pension pot to deliver an annual income of £26,000 in retirement.
How to start saving cash and improve your money management skills
Unrealistic for most, many of us will need to be creative when it comes to saving our pennies and tightening our purse strings. Here are some ideas that can help if you want to start saving:
Use your smartphone for more than Whatsapp and Instagram
If you want to grow your savings, there are plenty of smartphone apps that promise to make life a little bit easier (and richer) for you. Here are a few examples of the new breed of financial technology apps available on the market:
- Chip stashes money away automatically without leaving you out of pocket. Once you’ve connected to the app, Chip gathers information on your spending habits and uses this data to work out how much you can realistically afford to save. Once it has determined a suitable amount, it will transfer the cash into a separate savings account so you don’t have to.
- Money Dashboard is a handy tool which helps you work out what exactly you are spending your money on. You connect the app to your bank account and then when you spend money, it appears on the app’s dashboard display. It also categorises spending, allowing you to see exactly where you’re over-spending so you can cut back. The app is read-only, so no payments, withdrawals or transfers can be made from any registered account.
These savvy apps are made possible through Open Banking, a UK government initiative which launched in January to encourage banks to open their application planning interface so consumers can harness (and have greater control) of their own financial data. To ensure you’re sharing your banking details with a safe and secure platform, check that it is FSCS approved.
Conduct a life audit
Are you overshadowed with outgoings you simply cannot justify anymore, such as a gym membership or an underused online streaming service? If the answer is yes, then it’s time to undertake a life audit. Take a bank statement and go through it carefully and strip out any expenditure that could be deemed as ‘dead money’ (money that is being spent on inessential things). Take the time to really consider if it’s essential or a waste of cash. Instead of paying a direct debit for such services, simply redirect the funds to your savings account. Your wallet will thank you for it later.
Kick the caffeine habit
The war on waste has never been bigger with the so-called ‘latte levy’ taking centre stage earlier this year. So much so, some high-street coffee shops are looking to tax those who require a non-recyclable takeaway cup and incentivise consumers to use their own reusable mug, by offering money off a drink purchase. For example:
- Costa Coffee – 25p off
- Starbucks – 25p off
- Pret a Manager – 50p off
- Paul – 25p off
- Greggs – 20p off
You can get a reusable cup from as little as £1 (or if you’re lucky you might be able to get your hands on one of our very own branded mugs) to help you reap the rewards.
Recycle or sell your unwanted stuff
Did you know some high-street retailers reward shoppers for recycling unloved items? Below, we’ve listed three you might not be – but definitely should be - aware of:
- Organic cosmetic brand Lush offers customers a free face mask for every five of their plastic pot lids brought back to them for recycling
- H&M gives customers a £5 voucher – which you can use on purchases over £25 in store and online – for any unwanted clothing or textiles you recycle through its garment collecting initiative
- Marks & Spencer runs a scheme called ‘Schwopping’ in partnership with Oxfam to make it easier for you to give your unwanted clothing a second life. You can fill up a bag and pick up 50 points on your Sparks card or get a £5 voucher which you can use when you spend £35 or more online or in-store
As well as recycling, take the time to declutter your home and make some extra cash by selling bits you don’t need. Whether it is unworn clothes or unwanted toys, try an online auction site such as eBay or a community marketplace like Gumtree and Facebook to advertise to others who may find a use for your useless items. Once you’ve received payment, pop it straight into your savings account ready for a rainy day. And most importantly, ensure you have a savings account that is suitable for your savings style.
For a full listing of our current savings accounts, click here.
*all figures and data correct as of May 2018