SAVING FOR THE FUTURE
Whether you’re planning for holidays and cars or for longer term goals such as buying a house or starting a family, there are a multitude of options open to you that mean you will be spoilt for choice. This means that you can shop around for some really good deals and have the option to swap to better deals intermittently that will give cash and voucher bonuses!
SAVING V. INVESTING
Of course saving and investing are two different activities. Savings accounts entail putting regular amounts of money away with no risk and then getting it all back including interest whenever you need it.
With investing you are taking the risk of losing some cash and interest but with the bonus that you could get back higher amounts than the regular savings option.
BANK & BUILDING SOCIETY ACCOUNTS
Now that interest in the UK is paid tax free there are some real incentives to save using one of the best bank or building society accounts on the high street. In the spirit of getting the best deal you should be prepared to hunt around and look to switch to other savings accounts if you notice they have a better deal. Many of them have starter or switching perks such as cash bonuses and vouchers. Here are some of the best:
Tesco Bank: guarantees 3% AER variable on up to £3k up until April 2019 and couples can open an account each making for even greater savings. You also get Clubcard points when you spend on a debit card.
Nationwide: this building society is one of the best for smaller savings amounts offering 5% interest on £2,500 for a year and then 1% when this timescale has elapsed.
Bank of Scotland: currently have 2% interest on amounts up to £5,000 as an example of rates, and a clever trick is to open more accounts if you have scope to do this as you are allowed three which will each give 2% per account.
There are two types of ISA schemes – Lifetime ISAs and Help to Buy ISAs are just for first time buyers. The government adds on a 25% bonus so that this tops up your savings by a healthy amount. As the names suggest these kind of ISAs are to support first time buyers to help them get on the property ladder.
Cash ISAs are fundamentally a savings account, and as with the bank account schemes mentioned above the interest isn’t taxed. You can put up to £20,000 a year in this account that will remain tax free so that you benefit from the interest gained.
A great new strategy is to use a robo-adviser which is a way of getting valuable financial or investment advice digitally. This method is based on proven algorithms that will optimize your savings at a low cost and often with a good return.