People's savings habits have been coming under the spotlight recently, particularly in light of Financial Planning Week, and although recent reports have painted a worrying picture of the nation's savings levels all is not lost – even a small amount of saving can go a long way.
It's good news for those that don't have hundreds of pounds they can afford to squirrel away every month, as many could have been put off saving small sums as they think it's not worth it. Well, the mantra to remember is "little and often", as saving small amounts can still make a big difference – even sacrificing your daily cup of coffee and putting the amount into a savings account can add up to thousands of pounds over the course of a decade – and when you add compound interest into the equation you can end up getting even more for your money.
The advice to consumers is to take advantage of the tax breaks offered by ISAs and pensions. You can save up to £11,520 per year tax-free in a stocks & shares ISA or can split the amount between that and a cash ISA, and with workplace pensions you get the double benefit of employer contributions and Government tax relief. After all, it's never too early to start planning for your retirement, and if you want to save for something closer on the horizon you can still benefit from the tax-free incentives of ISAs.
In even better news for savers, the market is becoming increasingly competitive with a lot of new products and improved rates being available.
For example, currently there are regular savings accounts that offer up to 4% interest whilst fixed cash ISAs can pay up to 3% (tax-free don't forget), and Moneyfacts analysis has revealed that there are now 45 savings accounts that will beat inflation – meaning those hard-earned savings will be maximised.
Looking for a Tax-efficient investment opportunity for your 2013/14 ISA Allowance? Check out our Stocks and Shares ISA Chart
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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