How much do you save?

MaxiRobriguez

FirstTimeSolo said:

Thanks all who have replied. I understand this is not statistically relevant data but I am only looking for general feedback for my own understanding and I fully understand this is a small specific demographic represented on this forum - that's ok, I am part of the same demographic too I promise not to use this data to publish a paper or write an article!

The other thing to consider is %'s are somewhat irrelevant in the grand schemes.

20% of £1m is significantly more than 50% of £50k.

The "right" answer for most people should simply be "as much as I can".

george4064

Circa 44% of my post tax income, excluding capital part of my mortgage payments and core pension contributions.

FirstTimeSolo

For more relevant numbers, my salary is approx £80k + bonus. I have not included bonus in the % savings monthly. 

Savings during 'normal times' when travelling to work, holidays, going to restaurants, shopping etc. - approx 35% + 6-8% pension
Savings during lockdown - over 50% (lost track - but higher than 50%)
Savings now (Still wfh in London) - closer to 50% 

bostonerimus

It's impossible to generalize as the amount you can save depends so much on your circumstances. For example, if you are young with kids and a mortgage you are going to have more outgoings than a couple of empty nesters who have paid off the house. But early savings/investments are the best ones as they have more time to grow and compound. So a good initial target is 10% of your gross salary...and that does not include employer pension contributions. Every time you get a raise put it towards investments rather than spending it with the goal of getting towards 20%. 

During my working life I started off at around 15%, but at the end, after I had paid off the mortgage and I was earning a fairly large salary, it was in the region of 60%. I'm now semi-retired and save all my income from my part time job so my saving rate is still around 50%.

Alexland

FirstTimeSolo said:

For more relevant numbers, my salary is approx £80k + bonus.

At that level of income have you considered substantially increasing your pension contributions to reduce or avoid higher rate tax?

MX5huggy

It varies wildly month to month around pay day anything not spent is moved into previously PB’s or latterly S&S ISA. Guess about 30% currently. About 40% of my gross salary goes to pension but the other half pays only the minimum to get the maximum from employer as mine is more tax efficient so it’s about 20% of family income. 

FirstTimeSolo

Alexland said:

FirstTimeSolo said:

For more relevant numbers, my salary is approx £80k + bonus.

At that level of income have you considered substantially increasing your pension contributions to reduce or avoid higher rate tax?

I do make additional SIPP contributions in lumpsum from the savings I have already accumulated. Remainder of my savings pot is in S&S ISA, investment accounts, Premium Bonds and of course as cash in savings account. My monthly savings also go into investments. 

MaxiRobriguez

FirstTimeSolo said:

Alexland said:

FirstTimeSolo said:

For more relevant numbers, my salary is approx £80k + bonus.

At that level of income have you considered substantially increasing your pension contributions to reduce or avoid higher rate tax?

I do make additional SIPP contributions in lumpsum from the savings I have already accumulated. Remainder of my savings pot is in S&S ISA, investment accounts, Premium Bonds and of course as cash in savings account. My monthly savings also go into investments. 

At £80k you should be looking at putting at least £30k towards your pension to dodge the 40% tax. If you're in a salary sacrifice scheme and get yourself into the basic rate bracket then you may get perks that basic rate tax-payers get - like child benefit.

strawb_shortcake

I save at least 30% of my take home pay a month. I earn a bit above average, the only earner in the household. I have 3 children and a mortgage. I think I waste quite a bit of money each month so could really be putting away a bit extra.

Wrongly, in my opinion I still get a small amount of Child tax credit and child benefit, but I'm not going to turn down money and this is included in my savings above. 

I sometimes struggle to see how lots of others in a similar situations to myself aren't able to save at all but I guess we are all different with varying needs, wants and priorities 

FirstTimeSolo

@MaxiRobriguez
I don't have childern and no plan to have any. I am currently not a house owner and no plan to buy in the next few years but I will do at some point and I don't want to tie up all my money into pension. But you are right, pension would be the most effective way of maximizing savings. Currently my pensions contributions are 6-8% work pension which is a DB pension and another 15% into SIPP.