Saving

Short and medium-term goals are things you plan to do within the next five years

For these goals, it’s important to know what you’re saving for and when you aim to achieve your goal.

It can be a good idea to keep your savings separate from your day-to-day money and bank accounts. By keeping the money separate it will help you to make sure you don’t accidentally eat into your savings and thereby extend the length of time it’ll take you to meet your goals.

There are a number of different types of accounts you could use to save into, including savings, regular saver, and cash ISA accounts. You should investigate which type of account would be best suited for your needs and circumstances.

Top Tip: Pay yourself first

You could set aside money every time you get paid or use an app to round up your spending and put loose change into a savings account. The key is to make it a habit. Having goals and saving towards tangible things and knowing how much you need to save each month is a great way to stay motivated.

Goals that are over five years or more in the future.

When it comes to achieving your long-term goals, the earlier you start putting money aside, the more time it will have to grow. This is a way of supercharging your savings using the power of compounding. Put simply, it means you can potentially benefit from investment growth that has already built up on your savings. This will accumulate over time and could turn a small sum into a significant amount. It’s important to remember that with all investments, the value of them can go down as well as up, and you may not get back what you put in.

Top Tip: Supercharge your savings

One way you can potentially increase your long-term savings is by looking at how much you’re saving into your workplace pension. By increasing your monthly contribution by an extra 1% of your salary, you could boost your pension pot for retirement. Because it’s a small amount, finding the extra money doesn’t have to mean big sacrifices. And as you are already saving into your workplace pension, you may not even notice the extra 1% going out of your salary. Remember, it’s not normally possible to withdraw money from a pension product until you reach age 55, which is due to rise to 57 in 2028.