Click to Chat

Live chat with our customer service team.

InsureWithMax Blog


Stop Bad Saving Habits

Many make a New Years' resolution to save money. The amount saved often depends on the size of the income. Those with higher wages have higher expenses and save more for their retirement. Around one-third of the adults have savings less than £600 (2020). Have you got a decent savings plan for 2023?

Saving

Be a banker 

How big should the saving be? Younger people have less in savings, while the amount increases as people get closer to retirement. Using government data, the savings by age group in 2020 are:

  • Under 25 have an average £2,481 savings
  • 25–34 have an average £3,544 savings
  • 35–44 have an average £5,995 savings
  • 45–54have an average £11,013 savings
  • Above 55 have an average £20,028 savings

As a rough guide, you should aim to save 20% of your monthly take home pay to ensure that you have a bigger enough pot for a reasonable retirement.

The amount saved should be

Saving money each month is hard work, given the current spending pressures. Here are the average savings by age (includes pension pot savings):

  1. At 30 years old, the average savings should be £51,434. The general rule is the savings should be equivalent to the annual gross pay.
  2. At 40 years old, the average savings should be £124,911. The general rule is savings should be 3-times the pre-retirement gross pay.
  3. At 50 years old, the average savings you should be £198,390. The general rule is savings should be 6-times the pre-retirement gross pay.
  4. At 60 years old the average savings should be £270,100. The general rule is savings should be 8-times the pre-retirement gross pay.

As a side note, the self-employed should keep a savings pot equal to 3-months pay for an emergency when they are not able to work. 

Be a budget nerd 

In the cost of living crisis, saving is hard, as many workers cannot save the recommended 20% of take-home pay. Creating a budget will show where the money is being spent each month. Get on top of the finances by planning ahead; this is the first step to controlling spending and saving money.

ChildMax continues to ensure your salary and pays your take home salary while you’re on 12 months’ unpaid leave, caring for a sick child. It starts from £49.50 or for easy budgeting an initial payment of £8.25 followed by 11 monthly payments of £3.75.

 Visit at www.insurewithmax.com or call the UK call centre 0333 323 0098 for more information.

 Sources:

https://blog.moneyfarm.com/en/investing-101/average-savings-by-age-in-the-uk-how-much-should-you-be-saving/

https://debtfreefamily.co.uk/average-savings-by-age-uk/

https://yourmoney.lumio-app.com/uk-savings-statistics/

https://yourmoney.lumio-app.com/how-much-should-you-have-in-your-emergency-fund-uk/

Date: 08 January 2023 by Max Robinson