Saving through the decades part two: Twenties - Savings - News - Moneyfacts

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Saving through the decades part two: Twenties

Saving through the decades part two: Twenties

Category: Savings

Updated: 05/07/2013
First Published: 05/07/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Leaving our teens behind and facing up to the realities and responsibilities of modern adult life can be a scary prospect, especially in the current difficult financial climate.

Saving money on a regular basis can be tough. The rising cost of outgoings such as rent, bills and food shopping, as well as paying off any student debts, can often leave little money left over at the end of the month to put in a safe place. Hhowever, just a small amount saved here and there can go a long way.

One of the primary financial challenges facing young people is the ability to save a decent amount of money for a deposit on their first home. First-time buyers typically need to find enough money to put down a deposit of around 10% to secure a property in the current housing market.

Figures released by the mortgage provider Halifax revealed the value of an average property in the UK stands at £167,984. This means that customers who wish to borrow 90% of the overall property value will need to raise a deposit of around £16,800.

This is a pretty tall order for most people, even those with relatively well paid jobs, when you consider that wages have remained relatively static throughout the past few years.

A number of providers offer accounts exclusively designed to help first-time buyers raise funds to purchase a home of their own, however.

  • Nottingham Building Society pays a competitive rate of 3.25% to savers with investments between £5,000 and £25,000. Available to first time buyers, the First Home Saver requires one applicant to have never held a mortgage or owned their own home.

Setting up a 'new home' savings fund can help you focus on putting money aside, no matter how small. Doing so will reduce the chance of spending all your money by the end of each month and help to provide a clear goal for you to aim towards.

Of course, not everyone in their twenties wants to be 'tied down' with a mortgage. Many young people want to spend their money on fulfilling ambitions after graduating such as going backpacking or even working abroad for a short period.

Saving money prior to a travelling trip will ensure you are not solely reliant on using your credit card or borrowing money via a personal loan. Having an adequate savings pot will also provide a financial buffer in the event of any emergencies that may occur whilst away from home.

  • The My Savings account from Skipton Building Society provides a rate of 1.00% to savers who want to save for a specific goal, such as a holiday of a lifetime. Savers can invest between £1 and £1 million and make unlimited notice and penalty-free withdrawals.

What next?

Compare the best savings rates
Find all the best cash ISAs with Moneyfacts.co.uk Savings search
Download your free guide to ISAs
How to start saving an emergency fund

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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