Saving some of your money will also give you greater long-term security and peace of mind. Here are some tips to saving successfully in the long term.
1. Having some savings you can instantly access is essential in case of emergencies. But it’s also worth thinking about your savings over a longer time span. Making sure you take advantage of your yearly tax-free savings allowance with an ISA is just one way you can maximise your savings potential.
2. You can help protect your family’s or dependants’ financial security by taking out life insurance. It could pay out a lump sum in the event of your death or if you’re diagnosed with a terminal illness, helping ensure that any outstanding debts like a mortgage could be paid off. A Financial Adviser can help you with your protection needs.
3. More and more of us are now living longer, so at some point it makes sense to plan ahead and start paying into a pension. Speak with your employer to see if they provide one or are prepared to contribute on your behalf, some will match any money you put in yourself. The sooner you begin paying in, the higher your income is likely to be when you retire.
4. You’re never too young to make a will. If you die without one, your assets may be distributed according to the law rather than how you’d like. By sorting it out early, you can also make sure you don’t pay more inheritance tax than necessary.
How safe are savings?
The Financial Services Compensation Scheme is an independent body in place as a last resort to cover most deposits, including savings paid in retail bank accounts.
Payments under the scheme are limited to 100% of the first £50,000 of your total deposit, and where you share a joint account then it will provide £50,000 of cover for each of you (£100,000 in total).
Lloyds TSB is covered by the scheme - if you have savings with other providers you should check they are covered too - to find out more visit the Financial Services Compensation Scheme website.
Where to get savings advice
To a lot of people, savings - and particularly investments - can seem complicated. So getting the right kind of advice can help you be confident in what you're doing.
1. Check out the Money made clear page at the Financial Services Authority.
2. Try our Savings goal tool.
3. Speak to your bank and make an appointment with a Financial Advisor if you would like to discuss options for saving.
In short, use these small steps to kick start your savings in the short and long term:
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