Save your tax cut
In his latest Budget speech, the chancellor announced that from April next year, 12 months sooner than planned, the personal income tax allowance will rise from £11,850 to £12,500. At the same time, the threshold at which people will begin to pay the higher rate will rise from £46,350 to £50,000.
Everyone’s tax affairs are slightly different but this should mean that people who pay basic rate tax will see an extra £130 stay in their pocket each year while those earning above £50,000 could gain an extra £730 on top of that too.
Yorkshire Building Society has suggested savers take that extra cash and put it into savings rather than absorbing it into their spending.
Tanya Jackson, head of corporate affairs at the society, says she urges workers who can afford to, to save their tax breaks. “A basic-rate taxpayer who had deposited the money they’d saved from changes to the personal allowance since 2010 would now have an extra £5,434 in their savings account.”
Of course, it’s important to mention that if you’re struggling to balance your current budget and you find yourself getting into debt simply through the cost of living, then saving any tax break you get doesn’t make sense.
Everyone needs some emergency cash in the bank but after that, if you’re in debt then it makes sense to pay that down before building savings up.
Take the easy wins
It’s not just tax breaks; if you suddenly increase your income – maybe through a pay rise at work or because you’ve finally cleared a debt – then it’s worth trying to simply save that extra money.
You’re not used to having it anyway so there shouldn’t be any pain involved in giving it up.
Turn to tech
One of the best ways to save money without any pain is to squirrel away regular, small but affordable amounts.
The trouble is that thinking and planning that much is not exactly pain free and it’s easy to forget. But fintech firms understand that and it’s possible to make use of a digital savings assistant app that will assess your spending, work out how much money would be affordable for you to put into savings and move the cash into a savings account.
You don’t need to do anything but these apps tend to send notifications when they move the money, so you can see your savings build without feeling the pain of transferring larger sums each month.
Apps that offer this service include Plum and Chip; they have slightly different offerings so it’s worth taking time to review which will work best for you.
Try a savings challenge
When so many people don’t have even £100 in savings, any extra will help. One way to trick yourself into saving more is to gamify making savings. Challenges work when it comes to getting fit, they might also help you get your savings into shape.
There are a few different savings games, some more affordable than others. There’s the 52-week challenge, where you save £1 in the first week, £2 in the second, £3 in the third and so on.