Plan Debt
Savings
Retirement


Savings Calculator

  1. 1Enter the amount you can afford to save per month
  2. 2Enter your savings goal – e.g £1,500
  3. 3Click "calculate" to see how long you'll need to save
Saving is important but striking the right balance between saving and repaying outstanding debts is essential. Saving £300 a month into an ISA may seem a prudent move but if you owe thousands of pounds on a credit card it makes little financial sense.

However, once debt is under control, acquiring a savings habit can only stand you in good financial stead. Having a goal to aim for can help to keep you saving. Use the AXA Savings calculator to see how long it will take you to achieve your savings goal.

Get an indication of how much you should be saving throughout your various life stages




What to do

  1. Be honest. Calculate all debts, from credit cards to overdrafts and loans so you have a clear idea of how much you owe. Those debts with the highest rate of interest should be earmarked, so they can be paid off first, or the debt transferred to a lower interest arrangement.
  2. Write down details of any savings you hold, from endowments to ISAs and money in deposit accounts, including, where applicable, the rate of interest received on these savings. Make sure you have an emergency pot of money (3-6 months earnings) set aside which can be easily accessed if necessary. This will help you to see whether your savings would be better off used to reduce outstanding debts.
  3. Before you surrender or stop paying into any investment or savings account you should find out whether there are any penalties or charges for doing so. If you are unsure you should seek financial advice. Investment plans are often designed to run for a fixed period and making changes to the plan can often result in penalties.
  4. Work out both your income and expenditure and then set yourself a budget and stick to it for the next three months. You can then assess how it is going. Click here to use the AXA budget planning tool.
  5. It is only common sense but if you are regularly overspending, as most of us are, then you need to either cut back on your spending or earn more money. Work out how much you are overspending by and then look to cut this down. Do you really need to spend £2 on a latte every day? (Based on a 5 day week over 48 weeks that's £480 per year!)
  6. Once you have worked out your monthly expenditure, it should be easier to see how much "spare" income you have each month that can be put into your savings. Build up an emergency pot by putting money into an instant access cash ISA to take advantage of tax free growth.

Saving

Our research shows there is a real dilemma between the way we manage debt and savings in the UK. Some 12.5 million people are making regular savings into current accounts, ISAs, endowments, while at the same time servicing a huge amount of unsecured debt. In other words we are juggling financially and not always successfully*.

If you are considering saving, be it into an ISA or a basic deposit account, your first priority should be getting your debts in order. It makes no sense saving if your debts are still escalating.

Following these steps could help you to get the right balance between saving for the future and clearing your debts.

* AXA Avenue Second Quarter Review: Savings - striking the right balance. April 2006

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