Savings! What are they good for?

Posted on by Keith Roseburgh

…protecting yourself against life’s ups and downs, of course!

According to research, millennials (those born between 1977 and 1995) are more focused on developing their financial security than putting money toward tangible commitments, such as mortgage deposits and starting a family. (Source: TopCashback)

In fact, the top three goals for 23 to 40-year-olds are:

  1. Creating an emergency fund (51%)
  2. Maintaining a savings cushion (43%)
  3. Achieving financial freedom (40%)

Whilst sensible, that does not leave a lot of room for the more longer-term planning, just over one third (35%) are saving for a mortgage deposit and just 14% are preparing to start a family.

Are these the wrong priorities?

Not at all. Having any financial goal and the motivation to save towards it, must be positive. In fact, with research from First Direct showing that up to 75% of millennials are not saving at all, we’re happy to support millennials in all sensible savings goals.

But there does need to be a balance between protecting yourself now and your financial preparations for the future.

While the number of millennials saving toward a deposit for their first home is quite low, there are a further 19% who are saving money to pay off their existing mortgage in full and 17% who plan to use their savings to fund the move to a bigger house. Which means that the number of 23-40-year-olds with home-related savings goals is higher than it first appears. They are just at different levels on the housing ladder.

However, the outlook for other lifetime events, such as getting married and starting a family has changed over the generations. Just 13% of millennials are saving for a wedding, and 14% are getting ready to expand their family tree.

Finding a balance

Not all people will have plans to start a family, or bankroll a huge wedding, and that’s fine. Everyone has different life goals, which will influence what you are saving toward and the path you take to get there.

If you know what you want in life, or maybe you’ve already ticked a few boxes and narrowed down your next steps, that’s great. Your financial targets should be obvious. However, if you’re still working out where you want to be and what you want to achieve, then a flexible savings strategy is likely to be better suited to you.

Either way, the most important thing is that you are saving; and that you are positioning your money in a way which suits you and your needs, both short term and long term.

Working toward your goals (whatever they are)

The way you save money will heavily depend on the type goal you are trying to achieve, these may include:

  • Specific goals: There are savings accounts and methods which are designed to help you to meet specific goals. For example, Lifetime ISAs (Individual Savings Accounts) are suitable for those saving for their first home and may even continue to provide a tax-efficient place to save money for retirement. There are also a range of pension options, which will better position your money if you are solely saving for later life, such as Workplace Pensions, which will see both you and your employer contribute toward your retirement income, with tax relief on top.
  • Short-term goals: Goals which you aim to meet within a few years do not leave much time for investments to recover from market fluctuations and as such usually mean that Cash savings accounts are better suited.
  • Long-term goals: Many people turn to investments for long-term strategies. This is due to the nature of risk and the potential for better returns and healthier growth over longer periods of time.
  • ‘Just in case’ goals: If you are not sure what you are saving for, but know that you need to put money away, it may be best to employ a mix of saving types. For example, you may have an instant access saver for small purchases, a Lifetime ISA containing a potential mortgage deposit and a Stocks and Shares ISA for any future needs.

Talking to the right people

Engaging with a financial planner or adviser can help you to determine what you are working toward financially, as well as guiding you toward the best ways to meet your goals and use your savings and the available products to your advantage.

To talk to a financial planner or adviser about your savings, feel free to contact us.

When I retired in May 2015, I approached Keith for guidance on pension planning as I had 5 pension policies that required to be merged into one pot. Keith gave good, clear and sensible advice in a professional and friendly manner; this was just what I needed to ensure that I had my future and that of my family safeguarded. Tom Dalkeith
An acquisition of capital through inheritance created a need for professional investment advice and management. After creating a suitable plan to suit my desired aspirations and risk level, over the past 18 years, Keith has constantly monitored the portfolio to my entire satisfaction, achieving the programme’s aims. Such conscientiousness and integrity have enabled me to recommend him to others who have been similarly satisfied. Mary Edinburgh
My wife and I were looking to arrange finance for a project. We wanted to know if it was possible to raise finance in the UK to buy a property in Spain. After hours of searching online, we settled on arranging a meeting with Keith. He was knowledgeable, friendly and helpful. Keith was able to recommend not only product which exceeded our budget expectations, but he was also able to put us in touch with a lawyer who could help to make it all happen. We now have our dream home in the sun thanks to Keith, and we have continued to rely on him ever since. Kenny Telfer BSc (Hons) MRICS
Keith has provided his services to me since I retired some years ago. I have much appreciated his knowledge and interpretation of what can sometimes be bewildering financial matters. In particular, his meticulous preparation and delivery of information in a clear and concise manner has been of great benefit in our deliberations. I would have no hesitation in recommending his services. Jim Pettigrew
Reaching the age of 55, I needed help to sort out my pension; I contacted Keith through Unbiased.co.uk for financial advice. Keith then came to see me and guided me in detail about my future, finances, savings, etc. I found Keith very informative. I had pensions in multiple pots, and he explained the best options for me. His knowledge and expertise guided me to make the correct decisions for my future. He dealt with everything with ease. Personally, I could not have done this process without him. He has helped me reduce my debt, increase my savings and I look forward to working with him to reduce my mortgage. Yvonne Scott
We approached Keith because we discovered that our investments were no longer being handled in the way we expected, we had various pensions too and a couple of frozen ones. Keith came up with a plan that suited us both and gave us a bit of cash to spend. His approach was both friendly and professional and took place at our home at a time that was convenient for us, I wouldn’t hesitate to recommend his professional advice and services. Graeme & Laura Ferguson

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