How To Save Money In The UK
New to the UK and looking to save some money? Knowing where to start isn’t easy, especially if you’re not familiar with the UK banking and savings system.
At Bloom, we aim to give people from all backgrounds the tools to thrive in the UK. So here’s everything you need to know about saving money in the UK.
What you need to save in the UK
You don’t need much to start saving in the UK. To get started, all you need is:
- A regular income — Steady money coming in means you’ll have enough to pay for your day-to-day expenses, and put some money in your savings.
- A safe place to keep your money — It’s important to keep any savings in a secure place, ideally a secure online savings account or app.
- Minimal or no debts — Pay off most of your debts before you start saving so you’re not accruing interest.
If you’re missing any of these, here’s what to do:
- Apply for a job — Getting a job is the best way to ensure you get a regular monthly income. Try to avoid zero hours contracts for the most stability and financial security.
- Claim any benefits you’re entitled to — Some UK residents are eligible for benefits like Universal Credit, Jobseeker's Allowance, and Carer's Allowance.
- Set up a savings account — Read our guides to ethical savings accounts and savings account alternatives, then choose a savings account to open.
- Clear high-interest debts first — Set up a payment plan to pay off any outstanding debts (excluding your mortgage), starting with those that charge the most interest.
When you’ve completed all of the above, you’re ready to start saving.
25 tips for saving money
Here are 25 of our top savings tips for new (or long-term) UK residents.
1. Make a budget
Saving is all about spending less than you earn. And with a budget, you can make that happen.
Track all your income and regular outgoings, then decide how much you can realistically save on a monthly or weekly basis. Put this money in your savings account as soon as you get paid, so you won’t be tempted to spend it.
2. Set a savings goal
Having a savings goal in mind can help you focus your saving efforts and keep you on track.
Decide to save for something you really want — whether it’s a trip, a home, or a wedding — and figure out how much you need to save.
3. Buy budget produce
When you’re shopping for food, stick to supermarket own brands and shop in the reduced section for discounted (but still fresh) fruits and veggies.
This will give you essentially the same products, but for a lower price — so you can pocket the difference.
4. Reduce fuel costs
If you drive, rising fuel prices may be a concern. But there are some changes you can make to make your fuel go further:
- Go to a supermarket petrol station — These tend to be cheaper than service stations or branded petrol stations.
- Minimise air conditioning — Open the windows rather than using the air con on hot days.
- Check your tyre pressure — Underinflated tyres can decrease fuel efficiency, so you won’t go as far on the same amount of fuel.
- Reduce car weight — Take any unnecessary heavy items out of the car boot or backseat.
5. Try a savings challenge
There are lots of viral savings challenges online. Take a look at your options and try out the one(s) that seem most realistic for you, and will help you achieve your savings goal.
6. Resist impulse buys
If you’re prone to impulse buying, do your best to avoid situations where this is more likely. For example, impromptu shopping trips and browsing your favourite online stores could trigger a shopping spree.
7. Cook and eat at home
Resist the temptation for takeaways, as they can seriously eat into your savings. Instead, cook and eat at home as much as you can.
8. Use price comparison websites
Make sure you’re getting the cheapest price for insurance, utilities, cars, and other large purchases by making use of price comparison websites.
9. Cancel unused subscriptions
Subscriptions are really popular in the UK. But because there are so many options, it can be tricky to keep track of how much you’re spending on a monthly basis.
Go through all your subscriptions and cancel any you no longer need.
10. Check what you’re paying for utilities
Household bills are usually a major expense. So make sure you’re getting the best deal on your broadband, gas, and electricity.
Price comparison websites like USwitch are a good place to find the best utility prices.
11. Do a weekly shop
Instead of small regular trips to the convenience store, head to a supermarket once a week to get your groceries. Convenience stores often charge more for the same products, so you can save money by doing a larger, less frequent shop.
12. Fill your freezer
Avoid food waste by making good use of your freezer. Make meals in advance and store them in your freezer for a quick evening meal when cooking isn’t on the agenda. (This is a good way to save on takeout, too).
13. Use any benefits you’re qualified for
Claim any benefits you’re entitled to in the UK. Use a benefits calculator to see which benefits are available to you.
There may also be local or national money saving schemes you can use, such as Healthy Start vouchers (which can be spent on healthy food for your young family) or the Winter Fuel Payment (which gives older people money towards their household bills in the colder months).
14. Look for deals for special occasions
If you have a birthday, anniversary, or another special occasion coming up, look for discounts on restaurants and gifts. Lots of places offer discounts if you book in advance, use a coupon, or book for a certain time or day.
15. Bring a water bottle
Take a refillable water bottle with you, so you don’t need to buy bottled water on-the-go. This is especially important on hot days, or if you’re heading out with kids.
16. Use reusable shopping bags
Don’t forget to take your reusable shopping bags with you to the supermarket. All stores now charge for single-use plastic bags, so avoid this by bringing a bag with you.
17. Draught-proof your house
Draughts can lead to higher heating bills, so take steps to minimise these throughout your home. Use draught excluders for doors and chimneys, and sealing tape for windows.
18. Shop second-hand
Need a new outfit? There’s no need to splash out on brand new clothes. Apps like Vinted help you get quality clothes for a fraction of the price of new clothes. You can also scour charity shops for bargain clothes, books, and games.
19. Quit smoking (and other pricey habits)
Smoking is an expensive habit. In the UK, there’s a lot of support out there for people who want to quit smoking, so you could save money and improve your health by cutting down on cigarettes.
Gambling and drinking alcohol can also cost a lot, so cut down to boost your savings.
20. Unlink your card from instant payment services
Apple Pay, Google Pay, and PayPal are very convenient — but they can sometimes make it too easy to pay.
Consider unlinking your debit card from some or all of these services so you have more time to think before you buy.
21. Invest in your home (if you own it)
If you own your home, consider investing in insulation, solar panels, triple glazing, or heat pumps to reduce energy bills in future years.
These investments can cost a lot upfront, so think about how long you’ll be living in your home before you make any snap upgrade decisions.
22. Plan ahead for special occasions
Eid, Christmas, Diwali — big occasions can come with big expenses. If you know there’s an expensive time of year coming up, try to plan ahead for the occasion.
23. Pay upfront if you can
Paying monthly for a car, insurance, or another big expense can help you spread the cost, but it’s often cheaper to pay upfront. So if possible, consider paying for big-ticket items in one lump sum.
24. Use instant access accounts sparingly
Instant access savings accounts are great for emergency funds, as you can withdraw your money whenever you need it. But try to avoid putting all your savings in an instant access saver, especially if you’re prone to dipping into your savings.
Instant access accounts also tend to have lower interest rates than ISAs, so you won’t get as much of a return on your cash.
25. Use savings apps
Apps (such a banking apps) are a great way to help you save. Having visibility of your savings on your smartphone can keep you on track, and help you manage any unexpected expenses easily. Plus, UK money apps are safe to use, especially compared with cash savings.
Where to save money in the UK
Here are some of the best places to save money in the UK.
An Individual Savings Account, or ISA, is one of the most popular places to save money in the UK. ISAs allow you to save up to £20,000 a year totally tax-free.
Some ISAs have a specific purpose. For example, you can save for retirement or buying a home with a Lifetime ISA.
2. Credit union savings accounts
UK credit unions are designed for people who can’t access traditional bank savings accounts, so they’re often used by new UK residents.
Credit unions are ethical and community-driven. They distribute any profits at the end of the year between their members, rather than paying large bonuses to senior staff.
3. Instant access savers
Instant access savings accounts are ideal for storing emergency funds. While you won’t make much by way of interest, you’ll be able to withdraw your money whenever you need it — for example, to pay for unexpected car repairs or boiler breakdowns.
4. Trust funds
If you’re saving for your children rather than yourself, opening a trust fund is a good way to save money. You can name a specific person who will benefit from the fund at a certain point, ensuring they receive the money you save.
See how to start a trust fund in the UK for more details.
Download Bloom to set up your contributions
Starting a money club is one way to hold yourself accountable to your money goals. And best of all, you can do it from your phone right now.
Search Bloom Money in your app store and download the app to get started.