Putting money aside for savings can be hard whatever your income level. Locking any spare cash away might feel like too much of a stretch if you don’t earn a lot of money – it could be the difference between treating yourself occasionally or having nothing at all. And if you do have a high income, saving might not feel as necessary if you know you have more money coming in.

Having savings can be vital to building your financial resilience – in other words, for managing your ability to overcome income shocks, such as losing your job. It’s also part of having a strong safety net which is one of the five money building blocks that make up good financial wellbeing. There’s no ‘right’ amount of money to save for these scenarios, although MoneyHelper recommends putting away enough to cover at least three months’ worth of expenses.1  

A survey from the Financial Conduct Authority (FCA) revealed that over 20 million adults in the UK don’t have enough money set aside to cover their living expenses for more than three months if they lost their job.2 This supports our findings too – 27% of people could only live off their cash savings for less than a month if they lost their jobs.3

Saving can be hard, but the solution might be as simple as setting aside £50 a month. 

Developing a savings habit

In fact, the amount you save doesn’t need to be £50. While setting a specific goal can sometimes help, aiming too high can dent your confidence if you don’t meet that goal. Instead, you should feel free to set aside as little or as much as you can afford to, because the real goal is to develop a savings habit. 

Making small changes like these can help you develop life-changing habits. So, once you start saving, even if it’s just a small amount, you’ll get into a habit that makes it easier to save in the future. In this way, saving can be a powerful act of self-care that can have a positive effect on your financial and emotional wellbeing.

If your earnings increase in the future, you'll be better placed to save a little more than if you'd never developed the habit in the first place. And as your savings pot builds up, the benefits of saving might just become that much easier to see. 

How much you could save over the long-term

Whatever amount you put into a savings account, don’t forget that compound interest will help you grow your money over time. 

For example, assuming an interest rate of 1.75% (the Bank of England Bank Rate, as at September 2022)4– your hypothetical £50 a month could be worth over £3,137 in five years’ time, or just over £6,561 in 10 years’ time. And by the time you retire – say in 30 years’ time – that pot could be worth more than £23,685. These figures don't factor in inflation – which will reduce what you could buy in the future with the money you’ve saved – but the small deposits still add up to a healthy sum (assuming you aren’t making withdrawals). Don’t forget that there are a range of different types of savings accounts out there – so do your research on which ones are best suited to your needs and goals. The interest rate payable and any tax implications will depend on your individual circumstances and can change.

For those who are more adventurous, investing might be another option to help your money grow. However, do bear in mind that the value of an investment can fall as well as rise, and isn’t guaranteed. You could get back less than you invest. Find out more about investing and the risks involved on the government’s MoneyHelper website. 

A few ways to save

If you’ve tried saving before and it hasn’t worked for you, you could try experimenting with different methods. Sometimes it’s just a case of finding an option that works for your lifestyle and there’s always new technology being developed to help you save.  

For example, some saving apps will automate the process, and even adjust the amount you save each month, according to your income and outgoings. Others round up your spending and puts the extra money into a savings account. These options require minimal effort and you could end up with a healthy amount over time. It’s important to remember to research thoroughly and it’s usually a good idea to compare different apps before deciding which one might be right for you.  

If you’re not sure what budgeting method to go for, check out our article which budgeting method is best for you? for more ways to save.

Start small to build the habit 

When you don't have any savings, getting started can be hard. But just giving it a go could generate a nice little nest egg before you know it.

Our Financial wellbeing index has more information on how to work towards becoming an ‘all-rounder’ – these are people who are financially comfortable and have a future plan in place.3  It also shares more suggestions on how to improve your long-term savings and build a safety net. 

  1. Emergency savings – how much is enough? Data source, Money Helper, August 2022.
  2. Financial Lives 2020 survey: the impact of coronavirus, page 14. Data source, Financial Conduct Authority, published 11 February 2021.
  3. How you can improve your financial wellbeing, page 16 and 22. Data source, Aegon’s Centre for Behavioural Research.10,021 respondents surveyed between August and September 2021. Published 2022.
  4. Interest rates and Bank Rate. Data source, Bank of England, August 2022. 


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