Saving money

A regular savings habit can help you prepare for the future. The money you accumulate could take the sting out of high university fees, or help you
save up for a car or a holiday. It could even help you secure a mortgage on your first home.

Many experts advise saving at least 10% of any money you receive. If you can manage it, save more:

• Include money for your savings in your budget
• Put money you would otherwise have spent on things like alcohol or cigarettes into your savings
• Set yourself saving targets

Key link: www.need2know.co.uk/money/savings

When can I start saving?

You can open a savings account in your own name from age 7. If you are younger, your parents can set up a savings account for you. Some parents prefer this to giving pocket money, because it will be useful for your future.

Related topics: Getting money, Moneywise

Choosing a savings account

You can open a savings account in the same bank as your current account, or in another bank or building society. Shop around for the highest rate of interest. The simplest type of account allows you to save as much or as little as you like and instantly access your money. You can often start with as little as £1.

For a better return look for accounts with higher interest rates. These often involve saving a fixed amount regularly. This is often done by setting up a regular payment from your current account. You may not be able to withdraw money as often, or there may be penalties if you do. These long-term savings are very useful:

• Gradual but steady increase in how much money you have
• Savings you need for future earn you money now
• Money somewhere safe for when you need it

Once you have a reasonable sum saved you may want to move it into another investment with higher returns. There are a number of options available but be cautious. Do your homework and seek advice.

Related topics: Opening an account, Moneywise