How to save for milestones

id

Life is full of exciting, and potentially pricey, moments. Whether you’re planning a big trip abroad, tying the knot, buying your first home, or expanding your family, here are some tips to help you save for milestones – and your long-term future.

Decide where the money’s going to come from

It might sound cliché, but having a budget could help you free up some money for your big moments.

Budgeting typically involves reviewing your income and outgoings and deciding how much money you’d feel comfortable putting away for particular things. Once you’ve earmarked money for a specific occasion, you might be less tempted to spend that money on anything else. Plus, when you create your budget, you might even spot areas where you can cut back on spending, potentially giving you more money to put towards your big life events.

There are even different budgeting methods people use, including the 50-30-20 method. This is where you put 50% of your income towards your needs (like food), 30% towards your wants (like streaming services), and 20% towards your savings goals. Savings goals will look different for everyone. You might have debts you want to pay off, you might want to make sure you have an emergency fund, or you might have a specific goal – like a wedding – in mind. Ultimately, it’s up to you to decide how much money to allocate to different things.

Oh, and one more thing. If you’re planning on having a baby, it’s worth checking MoneyHelper to see which benefits you could be eligible for, as this could really help you out financially.

Choose where to put your money

Once you know how much money you want to set aside for your milestones, you can decide where you want to put it. There are different savings or investment accounts that could potentially help your money work harder for you. We’ve put a few examples below – but ultimately, you’ll need to decide what’s right for you. 

For holidays, weddings, and more…

You could consider paying into something like an easy access savings account or an Individual Savings Account (ISA), like a cash ISA. With these, you can potentially earn interest on your savings. You might want to think about something like this if you have a relatively short-term goal, like a birthday trip. You can visit MoneyHelper to compare types of savings account.

If you’ve got a longer-term goal, you might prefer to have the type of ISA where your money is invested – meaning you could potentially achieve some investment growth over time. But be aware that the value of investments can go down as well as up and could be worth less than was paid in. 

For buying your first property…

Looking to get on the property ladder? One kind of account you could consider paying into is a Lifetime ISA (LISA). These are designed to help you save either for your first home or for retirement. You can start saving into a LISA between the ages of 18 and 39, and you can put £4,000 a year into one up until you’re 50. The government adds a 25% bonus to your savings, which is capped at £1,000 per year. Plus, you can earn tax-free interest on your savings. 

You can choose for some money to be invested if you wish. If you’re moving in with a partner who’s also a first-time buyer, you can each use a LISA, if you’re both eligible. To get the bonus, there’s some criteria you need to meet when it comes to buying your first home. To find out more, you can visit GOV.UK. But do keep in mind that rules can change. 

For your long-term future…

You might have some milestones that are right around the corner. But what about your long-term future? Your retirement could last for decades. 

There are different ways to save for retirement. A pension plan is one way – so if you’ve got one, it’s worth paying attention to it, no matter how far away your retirement might be. The earlier you start saving, the more you could potentially have in future.

You can use our pension calculator to check how much you could have in your pension plan in future and see if this matches up with your retirement goals. 

If you have a pension plan, it’s worth checking you’re comfortable with how much you’re paying in. If you want to change your monthly payments or make a single payment, you may be able to do this online or through your provider’s app (if they have one). Or you may need to call your provider or speak to your employer.

The information here is based on our understanding in November 2024 and shouldn’t be taken as financial advice.

Pension plans and some types of ISAs are investments.  Their value can go down as well as up and could be worth less than was paid in.

Standard Life accepts no responsibility for information in external websites. These are provided for general information.

Your own personal circumstances, including where you live in the UK, will have an impact on the tax you pay. Laws and tax rules may change in the future.