dua@dua.co.uk 020 8421 3555

Money on My Mind: Why You Need to Start Saving, Yesterday

09 Sept
Money on my mind

Whether you’re a young person just starting out in the world of work or you’ve been steadily inching your way up the career ladder for a while now, one thing’s almost certain – your savings account could look healthier. The importance of saving regularly, consistently and abundantly is easy to overlook – we live in a world full of temptations, after all, and the idea of foregoing this year’s much anticipated holiday in favour of shadowy future rewards can seem – well – less than appealing. When you’re working hard it’s easy to spend money on unnecessary items to make it all seem worthwhile – when all’s said and done, what’s the point of working a sixty-hour week if you still have to bring your own sandwiches to work, or deny your children the comforts you’ve always dreamed of providing for them?

But the cold reality of the matter is that, as our life expectancies improve, the amount of time we’re going to be drawing our pension for increases – and the necessity of putting enough money aside for the future becomes ever more important. And with constant changes to pension plans often slipping under the radar (a 2015 study of young voters found that pension plans didn’t even register as an influencing factor for first time voters) and politically uncertain times ahead, can you be sure that you’ll be looked after in your old age? What about if you want to retire early, or move abroad? How can you be sure that you’ve ring-fenced enough money away to cover all eventualities?

The simple (if unpalatable) truth is that you need to save as much as possible, for as long as you possibly can. A recent analysis from The Telegraph found that, in order to draw an annual pension of £25,000 from age 60, you and your employer need to have been making a combined annual contribution of £1,233 from the age of 25 – but if pension plans were a consideration when it came to choosing your career when you were in your twenties, then you are in a minority. Most people simply don’t think about doing some serious saving until they begin to approach middle age – and then you’ve got a lot of time to catch up on.

So, if you’re starting to feel panicked about the size of your pension pot, how can you kick-start your savings? Other than feeding your family plain rice non-stop for the next five years, selling all your clothes and declaring yourself a squatter in your own house to avoid mortgage payments, there’s a few tricks for maximizing the savings you already have with comparatively little effort.

Firstly, you need to make the most of the tax breaks available to you – as of 6th April 2016, the new Personal Savings Allowance means you can earn up to £1000 pounds of interest per tax year on your non-ISA savings, so make sure your savings account is maximizing your accruals. If you’ve already accumulated significant savings which are likely to earn you interest in excess of £1000, you should also make sure you’re putting some of your money into an ISA, to avoid paying unnecessary tax. It’s particularly worth taking this advice if you’re a higher or additional rate tax payer, in which case your interest free Personal Savings Allowance is diminished or nonexistent.

Another way of accruing savings is to consider moving into a smaller property – this is probably the easiest way of building up a large nest egg. As you approach retirement and your children leave home, you may find yourself more comfortable somewhere smaller anyway – and the profits from your sale may just get you that villa in Spain you’ve been dreaming of.

There are several strategies you can undertake to make the most of your savings, but the best way to ensure you’re looked after is to start saving as early as possible, and late is better than never – so whether you’re 25 or 55, start setting money aside today.

Related Blogs

‘Frugal Innovation’ – Why Cheaper, Simpler Products Are Ideal for Emerging Markets

Think “innovation” in the West, and most likely, you’ll be thinking of groundbreaking new technologies,...

read more

Help to Buy or Buy to Bust? How the New Government Scheme Could Cost You

The right to shelter has been a UN-sanctioned human right since 1948, but in these post-recession...

read more

Gain Interest, Don’t Pay It: Savings Accounts That Give You Something Back

High interest current accounts, ISA’s, tax free personal allowances, fixed vs variable savings accounts...

read more

Buddy Up: How Local Businesses Can Aid Your Overseas Expansion

Going global is an immensely exciting time for any business – you’ve had an idea and seen it to fruition...

read more

Follow us on: 

CONTACT US

Dua & Co (Watford)

3 Century Court, Tolpits Lane Watford, WD18 9RS

+44 (0)20 8421 3555

Dua & Co (London)

25 North Row London, W1K 6DJ

+44 (0)20 7979 2041

Dua & Co (City)

9 Devonshire Square London EC2M 4YF

+44 (0)20 3356 9706

get in touch

Submit

All material on this site is used by permission. We may use cookies on this site. See our cookie policy here

Registered to carry on audit work in the UK and Ireland; regulated for a range of investment business activities; and licensed to carry out the reserved legal activity of non-contentious probate in England and Wales by the Institute of Chartered Accountants in England and Wales.

Read the Dua & Co Blog here

Provision of services regulations disclosure here

© Dua & Co 2016

Dua & Co. Limited trading as Dua & Co Chartered Accountants.

Dua & Co Limited is registered in England & Wales.

DIVERSITY AND INCLUSIVENESS

As a business, we have been clear in our commitment to Diversity and Inclusiveness. An important part of this is understanding the 'mix' of our people and measuring progress towards the goals that we have set ourselves. We can share our approach to employee monitoring, together with some statistics showing the make-up of our business. To obtain these please email us at dua@dua.co.uk