A strong savings habit isn’t built overnight: it comes from making deliberate choices and reviewing them as circumstances change. Whether you’re starting from scratch or looking to fine-tune your approach, focusing on a few practical steps can help you build your financial security, as Ben Mitchell, Director of Savings at Chetwood Bank, explains.
Take stock of your finances
Effective saving starts with clarity. That means setting realistic goals – figuring out how much you can afford to save each month, and how much you feel you need to put aside – and then working backwards to figure out a budget that will get you there. Establishing a clear goal makes it easier to track progress and stay disciplined. If things change (if your childcare costs go down when school starts), don’t let any extra cash get lost in lifestyle creep. Protect your finances by allocating any amount that is freed up into savings.
Choose the right account
Some are designed to provide flexibility, letting you access funds at short notice, while others reward you for committing money for a fixed term. If you need quick access, an easy access account is probably best, but if you can lock your money away, fixed-term accounts can provide higher returns and certainty. Reviewing the trade-off between access and interest rate is key – and for many savers, holding a variety of accounts can provide the best of both worlds. And if you think tax on your savings interest is going to be something you want to avoid, consider tax-efficient options, like an ISA.
Shop around
The UK savings market is competitive, with challenger banks playing a growing role. These providers often operate with lower overheads than traditional high street banks, which can allow them to offer more attractive rates. For savers, it pays to be proactive: compare different providers, read the fine print, and don’t assume your existing bank is offering the best deal. The difference between accounts may look small on paper, but it can make a meaningful impact over time.
Watch the Autumn Budget
Government policy also has a role to play in shaping the savings environment. The upcoming Autumn Budget could bring measures that affect savers: from tax thresholds to allowances or incentives for particular types of savings. While the exact outcomes are uncertain, it’s worth keeping informed. Being aware of potential changes means you can adjust your approach if necessary and avoid being caught off guard.
Review your finances regularly
Never become complacent. Financial circumstances change at individual and national level. A savings plan that worked a year ago may not be optimal today. Reviewing at least once or twice a year ensures your money is still aligned with your goals and that you’re making the most of available opportunities. The savings market will change – interest rates rise and fall, government policy shifts – but the principle remains the same: money left idle loses value. By staying engaged and making small, deliberate choices, you can put yourself in a stronger position for whatever comes next.
