Setting savings goals. And how to achieve them

MoneyPlus Features Team

What are your savings goals? Big holiday, new car, deposit for a new home, wedding? Our simple tips can go a long way to helping you save for these exciting life moments.

Budget, save, invest and take a long-term view: simple principles that can help you achieve your money goals, whatever they are.

While saving isn’t just for the New Year, it’s a great time to get motivated. So follow these five easy steps to start your journey.

1. Name that goal

What are you saving for? Name your goal and you’re more likely to save for it.

Grab a pen and write it down, mark it on the chalkboard in the kitchen or – even better – consider setting up an online savings ‘pot’ in the name of your goal to spur you on. Whether that’s ‘House deposit’ or ‘Cousin’s wedding in California’, name it, and save for it. Just making it tangible will help it to be more achievable.

And, if you can, don’t stop at one. Think of both your immediate and future goals.

Tick, that’s the first step done.

For more on setting goals check the Money Advice Service.

2. Set yourself a spending allowance

Rather than save what’s left at the end of the month, put some savings aside as soon as you’re paid. This will help to ensure the amount you wanted to set aside is actually the sum you save. It puts your savings goals higher up the priorities for your money than things like socialising.

“I put aside some savings each month and then give myself a spending allowance,” says student engineer Holly McIntosh. “I also use a round-up app to save small amounts for treats or going out.”

It’s little wonder online banks and apps such as Monzo and Moneybox have grown in popularity.

Quick and easy to use, they typically let you create different savings pots so that you don’t mix up your savings with everyday spending, and you can even round up bank transactions and put them into savings.

Read more in great money resolutions for 2020 including money blogger Holly Johnson on the ‘magic math’ of paying yourself first.

3. Know the difference between saving and investing

Whatever your savings goals, it’s important to understand the pros and cons of savings compared to investments.

Saving generally means putting money into cash ‘products’ such as a bank account or a Cash ISA (Individual Savings Account).

It’s usually secure and you get back what you put in, normally with a little bit of interest on top. But inflation can mean your money is worth less in real terms as the price of many things you buy goes up but with low rates of interest, your savings normally don’t keep pace.

You might consider investing your money over a longer timeframe if you don’t need immediate access to it. By investing in a Stocks & Shares ISA, for example, there is potential for more growth but you also need to be comfortable with the risk that the value of investments can go down as well as up and you could get back less than you paid in.

It’s usually recommended to have a timeframe of five years or more when you’re investing as all investments can experience short-term ups and downs in value.

4. Look after your medium-term goals

A big goal could be saving or paying for a home. It’s something that is a major pressure for 18-34 year olds in particular, so any extra help is always welcome.

If you’re under 40 and looking to buy your first home, you can take out a tax-efficient Lifetime ISA (or LISA) and get a 25% bonus from the government.

If you put in the maximum £4,000 each tax year, you will get an extra £1,000. You can hold cash, stocks and shares or a combination of both.

LISAs can also be used to top up your retirement savings but there are conditions, so make sure you understand what these are.

For example, you’ll need to pay a 25% penalty – it could be hundreds of pounds – if you withdraw the cash and don’t use it for a first home or retirement. A LISA isn’t for short-term saving or for money you may need ready access to. As any stocks and shares in your LISA will be an investment, their value can go down as well as up and they may be worth less than was paid in.

If you’re not sure a LISA is for you, there are other types of ISAs, including Cash and Stocks & Shares ISAs.

You can find out more in What are ISAs, who are they for and when should I consider one? To see how much a Stocks & Shares ISA could be worth in future – even with as little as £50 a month – try our ISA calculator.

Find out more about LISAs on or

5. Don’t neglect your pension

Saving for retirement is one goal high on many people’s lists, no matter what their age. Most people will need an income when they stop working and a pension is a tax-efficient way to save for this.

When we asked some of our customers last year, almost three-quarters of those aged 25-34 said saving for retirement was very important.

It’s great they’re thinking about this early because, as explains in Why start your pension early?, there are definitely advantages to starting when you’re young.

Thanks to workplace pensions, retirement saving for many is now a team effort between you and your employer.

And whether you’ve got a workplace or private pension, you’re starting out on a career or eyeing up the exit, there are generous tax advantages offered by the government. You can normally start to take your money from age 55 if you want to (though this age may change in the future).

Your pension is invested so the value can go down as well as up and you may get back less than you paid in.

Find out more in our article, What’s so good about a pension?

And have a look at a tax relief calculator on the Which? website.

What you can do: Log in and keep track of how your pension is doing online or on the go with the app or try our pension calculator to see how much you could have in the future.


The information here is based on our understanding in January 2020 and should not be taken as financial advice. If you’re unsure please speak to a financial adviser. There is likely to be a charge for this.

Laws and tax rules may change in the future and your own personal circumstances will have an impact on tax treatment. The value of investments can go down as well as up and may be worth less than was paid in. 

Standard Life accepts no responsibility for the information contained in the websites referred to in this article. These are provided for general information only.