Top tips to help you save money at each stage of your life
There will be times – like when you're just starting out in the world of work or you have children to look after – this falls by the wayside.
But changing lifestyle and spending needs doesn't need to stop you saving altogether. Instead, it's about changing your strategy to fit.
Here, we look at what to focus on depending on your age, from building a rainy day fund in your 20s to maximising a pension pot in your 60s.
People in their 20s find it particularly hard to save. Many have just graduated with student debt and, unless they're living with family, are likely to be spending a large proportion of their income on rent and household bills.
Figures from Yorkshire Building Society show that many members of Gen Z (aged 17-24) are struggling to build up savings balances, with 5 millionhaving not saved anything in two years.
However, starting small with savings in your 20s can pay big dividends, as money you put away for your old age will have time to grow thanks to the magic of compound interest.
To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video
It's important that you also put money into a savings account you can access in the short term, so you're not blindsided by unexpected costs such as having to replace a car or broken household appliance.
If you pick the right accounts, you can even benefit from tax breaks or free money from the government.
Consider doing the following: Automating your savings so they come out of your account each month after payday before you pay for anything else.
Using your £20,000 a year ISA allowance to grow your savings in a tax-free environment.
Opening a LISA (Lifetime ISA) if you want to save for a first property. You can put up to £4,000 into one every year and the government will top it up with up to £1,000 a year. This money can only be used to buy a first property worth less than £450,000 or withdrawn at the age of 65 to help pay for retirement.
If you have an employer who will contribute to your pension, make sure you don't miss out on the chance of these contributions.
It can be tempting to opt out of your company pension scheme if you need the money now, but if you do, you're missing out on the chance to save tax-free for retirement as well as additional cash from your employer.
Expenses are high in your 30s, with people often getting married or having children.
The average age of a first-time buyer is 34, meaning many will spend the early part of this decade scraping together a deposit and the latter part paying a mortgage.
Between the ages of 35 and 44, the average person ends up with total wealth of £209,000, but this includes housing equity as well as savings and investments.
So while you're prioritising a house deposit and the various outgoings that crop up, make sure you also consider: Your emergency fund. Target having easy-access savings of between three and six months of basic expenses.
Target having easy-access savings of between three and six months of basic expenses. Your pension. Money saved for retirement now will have time to grow.
Money saved for retirement now will have time to grow. Tax-free savings options. If you're a higher-rate taxpayer, even £12,000 of savings at 5% results in you paying tax on some of your savings interest — unless you continue to shelter your savings in an ISA that is.
Have children? Starting to save for them early could make all the difference to their later years.
Contributing regularly to a tax-free Junior ISA in either cash or shares could grow them a nest egg that could help with university, driving lessons or even a house deposit. Put £50 a month in a savings account for them from birth and they could have over £17,000 by 18 if the money grows at 5%.
Many of us reach our highest earnings potential in our 40s and 50s, giving us more money to set aside.
As such, now's the time to ensure your savings are in the highest-paying accounts possible, considering your tax-free allowance of £20,000 a year. More Trending
Financial planner Ryan Kingsley describes this as the 'catch-up decade' for saving, telling Metro: 'This is a time to get intentional if you haven't already, and you should be looking to save around 20% or more of your income.'
Some of the savings techniques to consider: Once you have an emergency fund, consider locking up some of your money for longer. You may receive better returns by fixing an account for several years.
Spread your savings into pots that mature at different times so that you get the best rates available but are also able to hit financial goals.
Continue to prioritise pension saving. Once you hit 55 – rising to 57 in April 2028 – you can take 25% of the money from your pension tax-free. But consider the tax implications of doing this – especially if you are still working – and take financial advice if you're unsure.
Now's the time to check your state pension records to ensure you'll receive a full state pension after you retire. You'll usually need
35 full years of national insurance contributions to receive the full amount.
You can check online on the government website whether you're close to the necessary years of contributions and can pay to 'buy' extra years of contributions if you're not.
As you approach retirement, you may be thinking about spending some of your hard-earned savings. Many people in this age bracket have quite high savings balances amassed over time – government figures suggest that over-65s have an average ISA balance of £63,365.
View More »
However, you can still maximise your savings: If you have large balances in savings, ensure you get the highest interest rate possible so that it doesn't decrease in value with inflation. Most best-selling savings products drop their rates after a set time, so ensure you check yours regularly.
When withdrawing from savings and using your pension, consider the tax implications. The government offers a free PensionWise appointment to those with defined contribution pension pots once they reach 50 or more, and this may help with your strategy.
Ensure your emergency fund is keeping track with your expenses and top it up as necessary.
Want to give some of your savings to your children or grandchildren? Check the inheritance tax (IHT) rules to ensure you give away money tax-free.
Under the current rules, any gifts you give seven years or more before your death are free of IHT, while you also have a 'gifting allowance', meaning you can give a certain amount away each year without attracting tax on it.
The allowance includes £3,000 of gifts every tax year, plus some other exemptions.
Do you have a story to share?
Get in touch by emailing MetroLifestyleTeam@Metro.co.uk.
MORE: Best summer holiday money-saving deals, from free kids meals to discount days out
MORE: I'm a frugal mum of two — I ditched loo roll and cut my own hair
MORE: Martin Lewis' MSE warns parents with kids aged 47 to 15 they could be owed thousands
Your free newsletter guide to the best London has on offer, from drinks deals to restaurant reviews.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Metro
3 hours ago
- Metro
How much you actually need to save for your first home, wedding and retirement
Whether you apportion £20 notes into physical envelopes or use a number of different savings accounts, putting your money into different 'pots' makes saving more successful. Behavioural science expert Neil Bage says this is due to a phenomenon known as 'mental accounting', whereby your mind treats money differently if you decide what it is for. 'Give your money a purpose – like a holiday fund, an emergency stash or a 'future me' fund – and you're way more likely to actually save it,' he says. Technology makes pot-based saving easier than ever. Many banks and building societies allow you to have several different savings accounts and even to rename them so that you're always clear about their purpose. But how many pots should you have? And how much do you need to put into them? Read on to find out how to apportion your savings and make every pot work hard for you. How much might you need? The average first homeowner puts down a deposit of £68,154, says UK Finance, voice for the banking and finance industry. Depending on where you live and the type of home you buy, the sum you need could be higher or lower. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Is help at hand? While many people might turn to the Bank of Mum and Dad for help with a home deposit, the government can also provide a helping hand. The Lifetime Isa, or Lisa, allows you to put money away to spend on a first property with a bonus added from the government. As with any other Isa, the money you put in grows tax-free, and the government will add 25 per cent to what you put in. There are restrictions. You can only use the money for buying your first home, not a subsequent one, and that home can't be worth more than £450,000. You're limited to putting £4,000 a year into your Lisa, with the government adding a maximum bonus of £1,000. If you don't use the money for a first home, you can either use it for retirement by taking it out over the age of 60, or you can take it out but pay a penalty which works out higher than the government bonus. You can save a bigger sum of course, in a fixed-term savings account, and the longer you are prepared to leave it, the better the interest rate tends to be. It may be sensible to lock away some money in a fixed rate account in return for better interest rates over time. Automate monthly payments into your house deposit pot, to ensure you meet your targets. How much might you need? Most of us need to save into a pension for our retirement. According to the Pension And Lifetime Savings Association (PLSA) we'll need a pot of between £330,000 and £490,000 to have a moderate retirement. Is help at hand? Those figures sound daunting but fortunately, unless you are self-employed, your employer will also pay into your pension, helping it to grow, while the taxman will work with you, too, by adding back the income tax you've paid on your pension contributions. The earlier you start, the easier it will be. Having a pension scheme will ensure you get tax back and with employer contributions you'll be able to benefit from compound growth over time. How much might you need? The cost of a week in the sun has been rising faster than inflation, up to £1,166 for a week in Turkey all-inclusive or £914 for a week in Spain, according to Travel Supermarket. Putting away money each month towards a holiday like this makes the bill less painful later. For a family of four, putting £333.33 a month into a savings pot would give you £4,000 after a year, while a single person might get away with £83 a month for a £1,000 holiday. Is help at hand? Regular savings accounts might give your holiday cash a boost. These offer a high interest rate for your savings in return for you putting away a certain amount every month. You are rewarded for consistency but can only put away a certain lowish amount – perfect for holiday spends as the accounts usually pay the interest after a year. As well as using a Regular Saver account to benefit from interest, make sure you automate your payments, so you don't forget one and you've plenty in your holiday fund when you come to book. How much might you need? We spend more than £774 a year each on Christmas, research from Yorkshire Building Society suggests. But many of us go into debt to pay for it and are still paying it off when the next festive season rolls around. Saving in advance can take the sting out of it. You'd need to put £64.50 a month into a Christmas pot to cover this amount over a year. Is help at hand? Some financial institutions offer specific Christmas savings accounts, such as Yorkshire Building Society's Christmas e-saver, which allows you to put away £150 a month and get five per cent interest. Unlike Christmas savings schemes offered by supermarkets and other organisations, with a bank or building society your cash is protected. As well as saving into your pot regularly, you could declutter unwanted gifts from last year on Vinted, eBay or Facebook Marketplace and add what you make to it. How much might you need? More Trending Figures from wedding planning website National Wedding Survey suggest the average cost of the Big Day is now £23,250, meaning a couple who want to pay outright must put away £1,162.50 a month over an average 20-month engagement. Is help at hand? The Hitched survey suggests that parents shell out £14,647 per wedding on average. But not everyone wants to turn to the Bank of Mum and Dad. An alternative is to cut costs by having a smaller do, holding your wedding on a weekday or choosing cheaper catering options. Regular savings accounts may have limits that are too small for monthly wedding savings but whatever account you choose to save into, make sure you keep an eye on the interest rate and move your money if the rate drops. Consider an account with a fixed rate to guard against sudden falls in the Bank of England interest rate, and if you can use your Isa allowance – currently £20,000 a year each – this will help ensure the taxman takes less of your wedding saving View More » MORE: I have to hide washing-up liquid in my room because of my stingy flatmate MORE: Powder rooms with personality – 7 bathroom renovations to inspire your next DIY MORE: Readers discuss Corbyn's 'own goal', Doctor Who and gorilla costumes Your free newsletter guide to the best London has on offer, from drinks deals to restaurant reviews.
Fashion United
4 hours ago
- Fashion United
Berlin brand Saint Sass secures investment to fuel US expansion
Saint Sass, a Gen Z-centric Berlin fashion brand, has secured an investment from Swiss firm Infinitas Capital and German investor Bronk Venture Capital. The funding – the value of which was not disclosed – will be used to accelerate the company's international growth, particularly in the US, which has emerged as a key market for Saint Sass. In a release, the brand, which reported 'extraordinarily fast traction across Europe and the US' since its founding in 2021, said it intends to focus on e-commerce as it moves into its next phase of growth. High-end retail is also on the agenda, with 'selective placements in luxury environments' planned for the long-term. The investment, structured as both a primary and secondary, will also aid in Saint Sass' product expansion. The brand revealed that it is preparing to launch a broader fashion lingerie and lifestyle collection of bras, slips, sleepwear and swimwear, reaching 'every part of a woman's daily life'. In a statement, Larissa Schmid, who co-founded Saint Sass alongside Vivien Wysocki, said: 'Too many investors across DACH do not think outside those Continental markets, setting our new partners apart. They also understand that people follow people, not products. That underpins our vision. We remain true to who we are; and now we have the capital and conviction behind us to go global.' Schmid added that with the US serving as a key market, 'we are doubling down on bold design, sharp storytelling and cultural instinct'. She continued: 'As we grow, we will keep doing what has made Saint Sass resonate: creating products and a brand that stands for confidence and self-determination.' Founder of Infinitas Capital, Robin Lauber, stated that the firm was proud to partner with Saint Sass to 'support their vision to further drive expansion outside Germany'. He added: 'It is a sharp, modern label with the kind of relevance that international markets are hungry for. We are here to help scale it, according to the principles that continue to serve the business well.'
Metro
a day ago
- Metro
I earn £232,000 as a freelance writer — my salary feels surreal
Welcome back to Me and My Money, Metro's series taking a look at the UK's spending and saving habits. This week we meet Lizzie Davey, 34, a freelance tech and e-commerce writer from Brighton who has built a successful career that gives her an annual salary of more than £200,000. Lizzie saves a lot of her income and hopes to retire by her early 50s. Here, she tells us how she manages her income and savings. I've been freelancing for 12 years, starting aged 23 as a travel writer because I wanted to see more of the world without being tied down. I'd maxed out my annual leave at my job and wanted the freedom to travel as much as I wanted. I'm not sure I'd recommend that to everyone but it worked for me at the time. As time went on I slowly evolved into marketing content because I'd originally worked in marketing before going freelance and that's where my skillset was. When the Covid pandemic hit, e-commerce (online shopping) took off and I landed one e-commerce client. The e-commerce clients I work with are not actual retail brands – they're the companies that create software for those retail brands to use. Now the majority of my clients are in the e-commerce software space, which is obviously still thriving. I write customer-facing content, such as blog posts, case studies, ebooks and also internal communications for companies such as technical documents. I usually work with between seven and 10 clients a month on an ongoing basis. Mostly this involves writing a set amount of pieces or content for a client each month. It's really helpful for predicting my income for the year and giving me consistent work. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Annual income: £232,000 (2024) Income taken from the business after pension, expenses including co-working rent, tax and investments: £73,000 Main monthly outgoings: Amazon Prime: £6.60 (£79 a year) Mortgage: £783.58 Home insurance: £20.72 Council tax: £168 Phone and internet: £92 Energy: £50-£100 Income protection: £26.24 Petrol: £50 Netflix: £17.99 Car insurance: £200 a year It has taken me a while to get to this point. When I started I'd work 14-hour days and charge £25 per piece. Now my minimum rate per article is £850, and I won't do anything under £500 unless it's for a long-standing client looking for a small extra job. Earning this much does feel a bit surreal as it's an income I never ever imagined would be possible doing what I do. There's a trope that writers are poor and self-employed people don't earn much, so I was happy just to have the freedom to work my own hours. The money was a bonus as I've never been particularly money driven. I definitely don't live a luxury lifestyle, although I do eat out a lot more than most and travel more than my peers. I still have a budget though and set aside £500 a month for eating out, lunches, and doing fun things. I drive a 14-year-old Nissan Micra that has definitely seen better days, so I think that says it all! I think the thing to remember here is that while the business earns ~£240,000 a year, I don't pay myself that much. I pay myself about £75,000 a year, so I don't technically have a quarter of a million to spend on myself! The leftover money in the business goes into investments and will be saved for a time when I might want to take a year or so off. I'm definitely a saver when it comes to my personal money. I'm not a big spender AT ALL. I used to have a one-bedroom flat in central Brighton that I bought in 2021 but I wanted more space, so I updgraded to a 3-bedroom house less than three years later. I bought a three bedroom 1930s renovation project in March last year in the suburbs of Brighton. It's been slow progress because I drained the majority of my savings to buy the house but I'm about halfway through. I've had the kitchen and bathroom done and the garden is next on the list. The majority of my personal money is going on the house renovations at the moment, so I don't have a ton of savings, but I do go on holiday 4-6 times a year. These aren't extravagant holidays by any means (I stayed in a hostel on the last one!), and I tend to travel cheap and stay cheap. My main aim when travelling is eating and exploring, so I'm not really a luxury traveller. But my salary also means I have the freedom to say yes to things I want to do and I have quite a lot of hobbies I do throughout the week that I probably wouldn't be able to afford otherwise. I still give myself a budget each month though, and try to stick with that. My plan is to retire early – before the age of 55 – and I've got a financial adviser to help me with that and to keep my savings and investments on track. I pay £1,000 a month into a pension and invest in the stock market through my company in other accounts that I can access before the pension. I work from a co-working space in central Brighton, which I pay £255 a month for, through my company. I really like the social aspect of working alongside other people, and with people who are often self-employed and get it. It was really useful speaking to other freelancers who told me my initial rates were too low and who showed me how I should be structuring contracts and sending proposals. I start work early. I walk to my co-working space, which takes about 40 minutes, and am there for 8am. Between 8am and 11am is solid writing time. I put my phone on aeroplane mode, put my headphones on and listen to any music without lyrics while I concentrate on writing. Between 11am and 2pm, I'll take calls and have lunch. Sometimes I'll meet another freelancer for lunch or go to an event. Between 2pm and 4pm I'll do emails, edits, admin or write an outline for the next day's article. I'm usually done by 4pm except on Mondays where it's more like 5pm or 6pm. I normally take Fridays off, except if I do work for my own website or social media. It's really important to put yourself out there on social media and to build your own personal brand. More Trending I send a free weekly email every Friday aimed at freelancers, where I discuss my work and rates. I'll do a gym class in the afternoon, meet up with friends or go to the beach if it's nice. My advice for people starting now is to have a specific skill that you're good at, that people want and need. For me, that's marketing writing. But there are many writers out there who are trying to make it. And obviously AI has also become a new competitor, but clients still want the human side of content. Clients come to me because of my industry expertise. I've worked so prolifically in the e-commerce space that I understand all the problems their customers have. These companies want to drive sales and drive conversions, which I help with, but also I save them time from having to write their own content. I'm reliable, clients can count on me and they know they're going to get something good delivered on time. They are free to focus on other areas of the business to generate more revenue. View More » At some point I'll probably pivot into more strategy and consultancy and less writing but for now I'm happy. MORE: The average amount Brits have in savings, according to their age MORE: Living by the 50/40/10 rule got me out of £40,000 debt twice MORE: I'm 16 – my boss's question about my sex life disgusted me Your free newsletter guide to the best London has on offer, from drinks deals to restaurant reviews.
