Sponsored by Raisin UK
It’s never too late to start saving and, whatever your financial situation, there are plenty of ways to get your money working harder.
Whether you’ve found yourself with more disposable income because you’ve paid off your mortgage and your children have flown the nest, or you haven’t simply haven’t checked on any existing savings you have for a while, these four steps can help you build your savings nest egg with confidence.
1. Review your rate
One of the easiest ways to kickstart your savings is to make sure your money is in an account that pays a competitive interest rate.
If your savings are sitting in a current account or a savings account paying a dismal amount of interest, you’re missing out. For example, if you have a savings balance of £10,000 and you put it into an account paying an annual equivalent rate of 4%, you’d earn £400 a year in interest – versus just £50 if it were in an account paying 0.5% AER.
If you’re not sure where to find competitive savings rates, that’s where Raisin UK can help. It offers an easy-to-use marketplace for savings, enabling you to choose from a wide selection of high-interest-paying accounts from 40 banks and building societies. These include challenger banks and those not found on the high street. You can apply for as many accounts as you want, with peace of mind that eligible savings will have Financial Services Compensation Scheme (FSCS) protection up to £85,000 per banking license.
2. Consider fixed rate savings for guaranteed returns
If you want peace of mind that your returns won’t fall if interest rates continue to reduce, you might want to think about tying up some of your cash in a fixed term savings account. Not only does this type of account typically pay higher interest rates than easy access accounts, but it can also help you resist the temptation to dip into your savings as there are usually penalties for accessing your money before the end of the fixed term.
Fixed term accounts run for a range of different terms, starting from three months and up to five years, so you’ll have to think carefully about when you’ll need your savings.
Top 5 Fixed Rate Accounts
If you think you’re going to need to get your hands on your savings soon, then you may want to consider either an easy access account, or a notice account, which allows withdrawals provided you give an agreed amount of notice in advance.
Top 5 Easy Access Accounts
3. Know your allowances
As a saver, you don’t just want to earn interest – you want to protect it from the taxman. Fortunately, there are plenty of ways to keep taxes on your savings returns to a minimum.
Most people have a Personal Savings Allowance, which allows them to earn a certain amount of interest each year free of tax. Basic-rate taxpayers (20%) for example, can earn £1,000 interest per year tax-free, whilst higher-rate (40%) taxpayers can earn up to £500 tax-free. However, additional-rate taxpayers don’t get a Personal Savings Allowance.
There’s also a 0% starting rate for savings, which can apply for up to £5,000 of savings income on top of your Personal Savings Allowance. If your taxable earned and other non-savings, non-dividend income are below £17,570 for 2025/26 (or £20,700 if you are eligible for the blind person’s allowance), then this rate will apply to your taxable savings income.
If your savings returns are well under the Personal Savings Allowance threshold, or you qualify for the 0% starting rate for savings, then you can choose any type of savings account, as you shouldn’t need to worry about having to pay tax on savings interest. However, if you have a sizeable savings pot or have used up your Personal Savings Allowance, you may want to consider sheltering your savings in an individual savings account (ISA) as your returns will be free from tax.
4. Set a goal
Whether it’s a winter break to Spain, an emergency fund, or home improvements, having a goal that you want your savings to go towards can make it easier to commit to putting money aside regularly.
The key is to be consistent, and remember that even relatively small amounts can build up quickly – especially when you’re earning competitive returns. If you’re worried about sticking to the savings habit, you can make things easier by automating your payments into your account, by setting up a standing order the day after your pension or other income arrives.
You don’t have to restrict yourself to one savings goal, either. For example, you might have both short-term and longer-term goals and may decide to put money into different-length fixed rate savings accounts for each. Reaching your different targets can reinforce positive financial behaviour and encourage you to set and achieve future goals.
A final thought…
Building a solid savings habit is one of the most important financial steps you can take – no matter where you are in life. While it’s easy to put off saving, the truth is that the sooner you start, the more secure and flexible your future becomes. Even small, regular contributions can grow significantly over time, thanks to the power of compound interest.
If you’re worried about finding the best homes for your money, with a savings marketplace such as Raisin UK, you can apply to open as many accounts as you like, and manage everything under one roof. By kickstarting your savings today, you’ll be providing yourself with peace of mind and the freedom to enjoy the years ahead on your own terms.
Please note that Rest Less does not provide financial advice and no content or articles on the site should be regarded as financial advice. You should always do your own research before choosing any financial product so that you can be certain it is right for you and your specific circumstances.