Top 10 savings hacks

What you need to know to boost your savings.

Every month this year we’re sharing a series of our favourite money hacks to celebrate our 10th anniversary.

This time Andy is looking at the tricks to make your savings grow – from some simple changes you can make to some product specific workarounds.

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Move savings into a separate account

It’s hard to know how much you’re got in savings if you keep that cash mixed in with your everyday current account. You could also be spending some of that cash each month without realising. Both will have an impact on how much you actually put aside.

The hack to get around this is one of the most simple, yet so many people don’t do it. Keep your savings in a separate savings account. In fact, you can have a number of different pots you move money too, perhaps a different one for each purpose.

You can also mix up different types of accounts, meaning you can have both easy access accounts, but also longer fixes or notice accounts that might pay more.

Pay yourself first

This hack is about helping you grow your savings by prioritising what you put aside each month as soon as you get paid.

Many people just put what’s left at the end of the month into their savings. The problem here is the amount will vary, and you could be tempted to spend more than you need to since the cash is sitting there in your main account.

But by moving it out of the account closer to pay day, you’re committing to adding to your savings funds over everyday spending. To find the amount you’ll want to first deduct essential costs from your take home pay, so mortgage or rent, bills, groceries and commuting costs.

Then look at the figure left over and decide how much you want to keep for non-essentials and how much you want to put in savings – and move the latter amount over. You can obviously change this if you find it’s too much, or even too little.

You should aim to do this via a standing order so it’s automated and moves each month. I’d also schedule it for a day or two after pay day. This delay is to allow for weekends or bank holidays if your salary is delayed by these.

Use AI and tech to add even more

There are three ways you can keep adding to your pot without actually doing anything.

The first is auto-savings via the app Plum. You connect your current account and Plum will analyse your spending habits to work out how much extra you can afford to save. It’ll then move that money over,. You can pause it if needed, or increase and decrease the saving rate

Those of you on Monzo could add on IFTT (If This Then That) which allows you to set up rules to trigger further auto savings. For example, you could push money across if your weather app says it’s raining, or fine yourself if your map app shows you’re popping to the pub.

Finally many banking apps also allow you to ’round up’ spending, with the difference moving to a separate savings pot.

Change the type of account you use

This hack stops you dipping into your savings when you don’t really need to, so is a good one for those with less self control. Put some of your money in one that locks it away for a certain time.

Notice accounts tend to range from a week to four months, though longer ones are available, and you need to say that far in advance to access the cash. Meanwhile fixed rates have a set maturity dates and you can’t use the money before then. You can also look at some regular savers for the same restriction.

And added bonus is these types of account will usually pay a higher rate of interest on top!

Drip feed

As much as I love regular savers, they are limited by monthly caps, usually ranging from £50 to £400. So they’re no good for lump sums.

However, it can sometimes work out better if you keep that money in an easy access account and then gradually add the cash month by month to a regular saver. This is know as drip feeding.

The gains over just putting it in a fixed rate account can be small – it all depends on the difference in the rates available.

If rates are similar, a benefit of drip feeding over a fix is some of these regular savers do allow you some access, so it gives you flexibility you don’t have with fixed accounts.

Earn interest in your current account

Hack one was to not keep savings in your current account. But you’re still going to need some cash in there to pay bills and expenses. So this hack is to change your everyday bank to one that does pay some interest. There aren’t many, but Starling pays 3.5% on up to £5,000, while Kroo pays 4.1% on larger amounts.

Get free cash from the government

This hack won’t work for all of you, but those eligible can get 25% added to their pot.

The first is the Lifetime ISA, which can be opened by under 40s buying their first home or for retirement. Our full Lifetime ISA guide has all the information you need to get started

The other us the Help to Save scheme for low earners. You’ll get a 50% boost from the government for four years on new deposits, with a cap of £50 a month,

Start an account at a building society

There are a handful of building societies that offer exclusive rates on savings for customers who’ve been with them for a certain time, often more than a year. I’ve seen these from the likes of Coventry, Principality, Skipton, Saffron and more. Nationwide has also offered an exclusive rate too.

They come and go, and new issues of these accounts might never appear, but if you want to be in with a chance of getting these accounts, it can be worth opening up a standard easy access saver and deposit £1. Then the choice is yours if they do return.

Boost returns as a couple

Some of the best paying accounts have restrictions on the balance where you’ll get that top rate. But couples can hack this to double, triple or even quadruple that cap.

The first way is obvious – they open up an account in their own name so there are two accounts between you.

But some accounts, including Cahoot’s Sunny Day Saver will allow you to have a personal and a joint account, giving you access to yet another account. Those three accounts boost you from £3,000 to £9,000 at 5%.

And take it one step further, you can get four of the 6% paying Santander Edge Savers. One solo account each via your own current accounts, and two joint accounts via a joint current account. That increases your total balance from £4,000 to £16,000.

Avoid the Santander Edge Saver fee

The final hack relates to that last account. The high rate you earn can be wiped out by the £3 monthly fee that comes with the required Santander Edge current account.

The easiest way to avoid this is by paying your bills via the the account as you’ll get 1% cashback that should be more than £3 a month. But if you don’t pay bills, or you open up multiple accounts as a couple, that won’t work.

However, you can get around the fee by not adding any direct debits to the account. Without these you won’t trigger the cashback, which means the fee won’t be taken. And that means you’re earning pure interest on the linked Edge Saver.