We all have milestone goals we want to achieve in life – and getting there will often involve starting a savings pot.
Whether you’re saving up for a ‘big ticket’ purchase such as a holiday, or simply to help improve your own long-term financial security or that of your loved ones, the process tends to be a marathon, not a sprint.
Perseverance and keeping focused on your goal is often key, even if you have a few ‘blips’ along the way.
Emma-Lou Montgomery, associate director for personal investing at Fidelity International, says: “Our research found that the top savings goals for Britons include saving for the lifestyle they want in retirement, saving up for children’s and grandchildren’s futures, and saving to buy another major purchase such as a car, or to fund major DIY works.
“However, understandably with the cost-of-living front of mind for many, a quarter (25%) say their main goal is just to get by and make ends meet.”
While saving money in the current high-cost climate isn’t easy, here are Montgomery’s tips for making a start on major savings goals…
1. Saving for retirement
Montgomery says: “Put yourself on the right path by doing things like checking your contributions and seeing whether you can increase them.”
Even small increases in pension contributions can make a big difference over time, because the money will be rolling up as it earns interest, and your employer may also match your contributions.
“If you’ve had a few jobs in the past, then consider tracing back your various pension pots and consolidating them for ease,” Montgomery adds.
2. Saving for children or grandchildren
Montgomery points out that Junior ISAs have the advantage of being tax-efficient as well as rolling into an adult ISA when children turn 18, so they can continue the savings habit if they want to, or withdraw the funds.
Parents may also not be aware that teenagers can open an ‘adult’ cash Isa from the age of 16.
3. Saving for a big purchase
Montgomery suggests: “Try setting up a dedicated savings account with a direct debit attached to it, so you can save money without thinking about it. It’s also worth thinking about when you want to make the big purchase, for example if you’re saving for something that will take you five years or more, then you may want to think about looking into a stocks and shares ISA.”
She adds: “However you do it, don’t be put off by having such a large, seemingly insurmountable sum standing between you and your dream.
“Just as mighty oaks from little acorns grow, big purchases don’t require you to start out with a big lump sum. They’re just as achievable if you’re prepared to put in the time and have the discipline to diligently save a regular, smaller sum of money.”