Small savings - any point?

Tennyten

I'm 29 and have £4,500 in savings. I rent a flat and only earn around £16,000 a year (this is set to go up but there'll be a maximum of £20,000. I can afford to save around £100 a month. I have no pension. Is it too late to start saving for retirement and will I ever have enough for a house deposit? I don't know where to start with any of that. I only started earning a salary at 27 (I started university late and spent a few years working for free while trying to get experience in my chosen field). My only debt is my student loan.

Broken_Biscuits

do you deprive yourself of things you want on 16k a year? If not, then surely whatever pay rise you get is pure profit for the savings pot.

I personally would pay in whatever you need to trigger the company contribution in your pension and then look at the best short term savings vehicle available to you, if a mortgage is a priority to you.

LeoTLion

I'm going to say yes, there is a point. If only for the fact that if you can afford to save £100 a month and don't, you'll just end up buying a load of stuff you don't need :rotfl:

My suggestion would be to get your current savings into a couple of high interest current accounts, then set up a regular savings account and put the £100 a month you save plus extra from your savings to make it up to the full amount allowed. This would maximise the interest you could get.

No-one knows what the future holds, but generally, having some money in savings is preferable to not having any, whatever happens.

xylophone

Your employer doesn't provide a pension scheme? If not, he'll soon have to.

https://www.gov.uk/workplace-pensions

Try high interest current accounts? Santander 123 might be a good place to start - you could open it with your savings and make sure to transfer over your utility direct debits for cash back?

PasturesNew

The point is that you don't know when, in the future, you'll suddenly find you are in a position to buy a house "...if only I'd saved...."

These moments are suddenly thrust upon you and have a small window of opportunity.

It might be in 10 years' time, maybe you'll move areas and suddenly find a well paid job where houses are cheaper ....

So, if you can, it's never a waste; it just seems pointless now. In 10 years' time it won't seem pointless at all.

mvarrier

Where do you live? If London, marry rich. If up north, there is hope.

Tennyten

Haha I do live up north. I couldn't afford to live alone on my current salary in London. No pension at work and I'm not sure how exactly the new scheme works. Does every single company have to provide one and when by? Are there any high interest accounts that I don't have to pay for? And where would I begin with a savings account? I just keep mine in a separate current account. I don't feel I'm depriving myself of anything (except holidays) but I don't really want much. I'm very low maintenance.

Tennyten

Also, thanks so much for the responses so far.

Eco_Miser

With £4500 I'd get a Lloyds Club account, plus the matching monthly saver, all at 4% AER.
Or TSB Classic Plus and matching regular saver both at 5% AER, for £2000 plus £250 a month, and the Nationwide FlexDirect for the other £2500, also at 5%. Note that you will need to bounce £1000 between the accounts, go paperless at TSB, and meet all the other Terms and Conditions of the accounts.

It's never too late to start saving for retirement, and you could already have enough for a house deposit - depends whereabouts in the great up north you want to live.

xdarata

Having a pension fund is very important. I have felt that retirement without a pension fund that can guarantee the cost of living in old age is a misery. If it is possible, we must prepare it since the age of 30 years. Otherwise, since when we can get started. The important is we have to have a pension fund and it should be prepared from now.

enthusiasticsaver

Personally I would start a pension fund with your employer if they contribute and put a monthly amount away in current accounts towards buying a house eventually.