Why now’s the time to get your savings back on track – and how to do it. Follow these six simple steps to get organised and tackle your money goals.
It’s a new season and, for a lot of us, a fresh start in more than one way.
Summer’s over, life is moving towards a new normal and some of us are even getting back to the office.
So while you’re preparing for a new phase of the year, now’s a great time to get organised, take stock and revisit your savings goals too. Are you on track to meet them? Or have the resolutions you made at the start of the year slipped?
Don’t worry if they have, there’s still time to get your savings in check and compensate for any summer spending. Here are six tips to help you on your way.
1. Revisit your goals
A lot has happened this year already, so it’s okay if your priorities have shifted. Saving for a big holiday might have turned into saving for a first home, you could now have a family or a wedding on the way, or your career might have been affected by the pandemic.
If your life has changed then it’s likely your savings goals will have too. So it’s important to take a second look at them and make sure you’re doing the right thing for your priorities.
First, it’s important to recognise the difference between saving and investing. Our Saving vs investing article highlights the key differences you should be aware of.
A change in your goals could mean a change in where you want to put your money. Knowing your attitude towards risk will help. You can use our risk questionnaire to help you decide what level of risk you’re comfortable with just now.
2. Review your budget
Even if you set one at the start of the year, it’s important to regularly review your budget to see if any improvements can be made. Maybe your outgoings are a little less than you had predicted and you could afford to put a bit more aside each month for the future.
Or, on the flip side, you may find that you’re struggling to keep up with the amount you’d set yourself and you might need to shuffle things around a bit or save a little less, but maybe in a more tax-efficient way.
For some tips on how to set a budget, or how to get one back on track, try Money Helper’s guide to managing your money.
3. Make the most of tax-free saving
We’re just about half-way through the tax year now, so check you’re making the most of your tax-free allowances. That can include your Individual Savings Account (ISA) allowance, or your pension tax benefits and allowances.
If you make the most of any tax-efficient growth now, you can start saving again in the new tax year next April – when your new allowances will come into effect.
You can get familiar with the changes that came into play this tax year by reading Tax and pension tips for the 2021-22 tax year.
4. Take advantage of your pension plan
If retirement feels like a long way off, you might not have made your pension plan a priority. But saving into your pension plan can cost you less than you think, meaning you could end up with more money when you come to take it than you would have if you’d saved another way.
Pension Awareness Day lands this month, so why not take the opportunity to learn about the benefits your pension plan has to offer?
To start with, pension plans are a really tax-efficient way to save for your future. Your contributions are topped up by HMRC and the amount you get is largely based on the rate of income tax you pay. For example, if you pay basic rate income tax you get 20% relief. And therefore it normally only costs you £80 to save £100 into your pension plan. If you pay higher rates of tax, saving more can cost you even less.
Plus, thanks to auto-enrolment, your employer may be chipping in as well. Some might even offer matched contributions, where the more you pay in, the more they will too. So do check what your employer offers to make sure you’re taking full advantage of everything you could be getting from your pension.
Find out how else your pension plan can help you save for your financial future in What’s so good about a pension?
5. Don't forget about any old pension plans
Recent research has revealed that there are around 1.6 million pension pots worth £19.4 billion sitting unclaimed – the equivalent of nearly £13,000 per pension pot. Most of this is down to people simply forgetting to update their address when they move house.
If you’ve lost a pension plan, don’t worry – it isn’t that unusual. Read our article Tracking down a lost pension to find out the easiest way to go about finding yours. Your first port of call should be your pension provider, or you can contact the Government’s Pension Tracing Service.
If you find you’ve accumulated a few pension plans, it might make sense to combine them into one. Having all your pension savings in one place means one set of paperwork and one provider.
This could also make it easier to check how much you’ve saved – and how your pension investments are performing. And having one pension can make it easier to save into and top-up when you want (maybe you got a bonus at work and want to save it as tax-efficiently as possible into your pension plan). Combining your pension plans isn’t right for everyone. Before you consider this you need to be sure that you aren’t giving up any valuable guarantees that your pensions give you.
If you’re thinking about transferring a pension to Standard Life, you can find out how to do it and if it’s right for you on our pension transfer page.
6. Use technology to manage your money
If you want to really get a handle on your money, new apps can give you an overview of everything you earn, owe or spend in a single place.
Technology like this is revolutionising how many of us manage our money, allowing you to see multiple accounts from different places. Some banks even offer handy features like letting you round up the pennies for every purchase you make, making saving up easier than you might think.
The same is true about your pensions and savings, with apps that let you manage or top-up.
The information here is based on our understanding in September 2021 and shouldn’t be regarded as financial advice.
The value of investments can go down as well as up and may be worth less than what was paid in.
Tax and legislation may change and your own individual circumstances, including where you live in the UK, will have an impact on your tax treatment.
Standard Life accepts no responsibility for information contained on external websites. This is for general information only.