We're of the opinion that it's never too early, and you're never too young, to start planning ahead for a secure financial future. Here are some of the moves you can make that future you will thank you for.
For anyone who is unsure about the benefits of stocks & shares ISAs over cash ISAs, take a look at these figures - if you’d invested £15,000 into the FTSE All Share index over the 20 year period from 29 February 1996 to 29 February 2016 you would now be sitting on an investment worth a very healthy £51,865.59. And remember we had the GFC in that time period!
If, however, you had invested £15,000 into the average UK savings account over the same period, you would be left with a paltry £20,344.57.
Meaningful savings start with a few good habits
Saving doesn’t have to be a drag. Healthy daily spending habits mean everyone can afford to put something aside for that financial rainy day.
Take that daily caffeine fix. Bet you didn’t realise that cutting out your daily cappuccino could give your savings a serious boost?
By making some simple changes to your daily routine you could build up a significant savings pot over the years. For example, if you ditched your daily shop-bought coffee at £2.50 a day, five days a week and invested this amount into an ISA instead, you would have £50 a month to invest.
Over the years, that could lead to significant returns of more than £7,000 after 10 years, more than £12,000 after 15 years or more than £18,000 after 20 years. Isn’t it time you woke up and smelt the coffee (savings)?
Maximise your pension contributions
While your retirement years may seem like an eternity away, with all the other demands on your money that come with later life, it’s essential that you start putting money aside for your future as early as possible.
Unless you opted out, you will have been [auto-enrolled](https://wellbeing.neyber.co.uk/saving-investing-retirement/automatic-enrolment-an-introduction "An introduction to auto-enrolment) into a pension by your employer if you're over 22 and earning more than £10,000 a year. You can put away up to 8% of your qualified salary, and your employer has to put up at least 3% of this. So, it's essentially free cash. Contributing as much as you can at this stage will be well worth it. Your future self will thank you for it.
Start planning for life’s big events
Chances are you skip from week to week with barely a thought about the future except for where you’re going out that weekend. But just around the corner will be a series of life-changing events. Trust me.
Maybe you’ll want to buy a house, get married, have a baby, or start a business. Whatever life throws at you, you want to be financially prepared. That’s why it pays to start planning now.
Set yourself a couple of short-term goals. If buying a property is anywhere on your probable list of things to do, then do yourself a favour and start getting clued up on Lifetime ISAs.
Wannabe first-time buyers can get a boost from the government of 25%, which could add up to as much as £1,000 of free money each year to help you get that all-important foot on the property ladder. There are strict conditions about withdrawing from a Lifetime ISA without a penalty so make sure to read up on the details.
Our articles cover a wide range of mainstream financial products and employee benefits. Terms and conditions of each product may vary depending on your provider. Please ensure you check the specific terms and conditions of any financial products and employee benefits available to you from your employer.