Best way to save for the future?

[Farmersswife]

I wondered if anyone could advise a good way to save for the future? I’m 25 self employed I could put between £25-£100 a month away. Would a pension be best? LISA ? Or put it into stocks & shares? Any help or advice greatly appreciated.

Any tax free way of saving so probably pension or isa.

Thank you I am a bit of a novice when it comes to money ect I did look at Hargreaves but seemed like a lot of fees but they invest for you

If you have no pension that would be good

Otherwise you just need t search for the best savings rate
Whilst considering

• are you happy to tie it away for a year or more or might you need instant access

Then every year or so you need to see what is a good rate and move your money around

If you want to take risks - where by you might lose all your money or no make very much , then you can think about stock market investments - many banks offer things like stocks and shares Isa - the isa is tax free savings and the standard products tend to spread the risk over many companies

I like a scaffolded approach to savings -

Long distance/long term savings -

1. Pensions offered by workplace
2. Personal pensions if not
3. Long term boring old tracker funds where you trickle Money in to track an index fund and leave it well alone

Mid term goal based savings

1. Saving for a house deposit (LISA if need be)
2. Tax efficient savings for “big goals”
3. Once all that exhausted savings you don’t intend to touch in high interest accounts

Short term easy access savings with high liquidity -

1. A proper rainy day fund for when shit happens
2. A holiday fund

And finally sinking pots which aren’t really savings but you save up for these once in a while expenses -

1. Events and celebrations and gifts
2. Car repairs and maintenance
3. Insurance premiums to pay annually to get better deals
4. Other things in this category

LISA makes a lot of sense if you will be saving for a house deposit, because of the 25% bonus.

A stocks and shares ISA with Trading 212 is a very good low cost alternative to Hargreaves Lansdown as there are basically no fees for UK investments and plenty of low cost funds to choose from. E.g.
there are several Vanguard index trackers with management charges under 0.1%. They don't offer a LISA or pension option unfortunately, just the standard ISA. One free share worth £10 - £100 with the referral link as well (here).

Hopefully you already have a good instant access savings account already. I have one with Tandem Bank paying 5%, possibly you can get a slightly higher rate elsewhere. Very easy to move money in/out of current account with the phone app.

I'd say Lisa just for the 25% bonus, and that way it's locked away until you either want to buy a house or until you are near retirement age. I started mine at 37 but really really wish I'd started it sooner as it's already doing really well (depending on where you open it, it's like a stocks and shares anyway so each month your company will invest it for you but you also get the added benefit of 25% extra from the government.

Don't do it if you'll ever need the money early though as big penalties for withdrawing.

Pension, and LISA.

Do both.

LISA is very straightforward.

Pension - if I were you and just getting started I’d open something like Nest or Nutmeg or Pensionbee. They’re not the best out there, but they’re easy to understand and open, and getting started is what you need to do. The sooner you contribute the more your savings will grow.

Then you can read up on SIPPs etc (check out the Meaningful Money podcast, it’s very helpful) and change things when you’re confident.

But really just getting started is the thing. You should be contributing roughly 12.5% of your income to a pension/long-term savings.

Thank you will definitely look into it. Unfortunately not saving for a house deposit & currently no savings account just my current account but this is also something I’m looking into. I’ve been looking on 212 so will look into what you have recommended. Thank you so much

If you don’t have a savings account, are you putting aside enough money for tax when it’s due?

No I’m probably not I’m new to being self employed and currently trying to sort it & wrap my head around it all to be honest. I’m going tip open a savings & put 20% of my earning into it. Is that the best thing to do for tax ??

You need NI contributions too, self employed ones can be paid monthly or annually.

start with saving enough for tax,

then save up 6 months living expenses in an ordinary bank saving account.

then start a pension

I put my tax into premium bonds.

Good list above about getting various pots going and don't just have one

Hey 👋
I always find that if I have money saved in my bank then I always end up using it, so now I've got a monzo account which is completely separate, I just add money to the account every month and whatever I sold on vinted the money now goes in there now too!

Out of sight, out of mind is the way Its helping me at the moment

I do 25% of earnings, into an interest-paying account, every time I’m paid. Then if you need less it’s a welcome bonus, and if it’s a bit higher than you anticipated you’re covered.