Christmas is just around the corner and our annual festive splurging is starting to step up, but with research from Travelodge suggesting that households are expected to spend an average of £614.96 on Christmas this year, many are wondering why they didn't put more money aside for the festivities. Well, it may be too late to start saving for this year's festive spend, but it's never too early to start for next year's!
It may seem a little premature to start thinking about Christmas 2016, particularly as many of us have only just started thinking about this year's festivities, but a bit of forward planning could pay dividends in a year's time – and if you start saving into a regular savings account, you could maximise the benefits even further.
Many of the best regular savings deals are fixed for 12 months, which means that, if you start now, your savings account will mature just in time for next year's spending spree. The table below outlines the top accounts available in the sector, and shows just how much you could get back in a year's time:
Source: Moneyfacts.co.uk (Compiled 30.11.15)
"It's amazing that, while we know Christmas will come round every year, its eventual arrival is still a surprise, leaving us all wishing that we had put some money aside to cover the cost of our Christmas cheer," said Charlotte Nelson, finance expert at Moneyfacts. "Well, with some careful planning, we can all deck the halls next year.
"By putting just £50 a month into Leeds Building Society's Regular Saver account (for example), savers will be well on their way to covering the cost of the average household Christmas spend, and by putting more away each month, investors will have more than enough to indulge in a few extra treats from Santa."
Regular savings accounts can give you the discipline to save consistently by encouraging monthly deposits. Some will even charge penalties should you miss a monthly payment, so in those cases, there's no option but to get in the habit. However, you needn't worry about the amounts required: monthly payments can vary from a minimum of just £1 all the way up to a maximum of £3,000 a month, and you can often amend your deposits throughout the year, so there'll be something to suit all budgets.
Not only that, but the potential returns on offer will make it all worthwhile. "By opening a regular savings account, savers can potentially earn some of the highest rates of interest on offer at the moment," added Charlotte. "Indeed, loyalty rates of up to 6% are achievable if you a hold a current account with the provider."
However, it's important to be aware of the limitations. To curb any temptation to dip into your pot before it matures, many accounts charge a hefty interest penalty for withdrawals, and you'll also need to ensure that you can commit to the monthly payment in case you're penalised for missed deposits. This can be easily avoided by setting up a direct debit, however, and if you're committed to building up your pot, hopefully the withdrawal restrictions won't put too much of a dampener on things.
Above all, it's about being prepared. Charlotte concludes: "Money saved in a regular savings account can go towards any long-term purchase, but by getting into the habit now, savers can build up a nice chunk of cash for next year's yuletide."
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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