Savvy saver Cracking ways to start or build up savings

Experts say £2,000 is the magic number to help guard against debt. But even £200 cuts the risk of falling behind on bills, writes

- Rupert Jones

Having £2,000 in savings means you are 60% less likely to fall behind on household bills and have a much lower risk of problem debt than someone with little or no money put aside. That is the headline finding of a study by the University of Bristol’s personal finance research centre: when it comes to the protective power of savings, “£2,000 is a turning point”, it said. If that feels unattainable, the good news is even small sums can make a difference. Savings of £200 can help reduce the risk of falling into financial difficulties, the researchers found.

We all know how important it is to save, and putting some numbers out there may help give people a target to aim for.

The study was commissioned by the Building Societies Association to mark UK Savings Week, which runs until tomorrow and aims to encourage people “to build better savings habits, whatever their starting point”.

Here are some of the more painless ways to start or build up a savings pot.

Work your money harder

There is thought to be hundreds of billions of pounds sitting in current accounts earning little or no interest. You need enough money in your bank account to cover bills and outgoings, but if there is any left over, move it into a savings account, where it can earn interest.

To keep the money from building up again in your current account, you could set up a monthly standing order to pay into a savings account just after you have been paid. Or, at the end of each month, sweep what is left in your current account into your savings.

There are ways to squirrel away money almost without thought, such as a 'roundup' tool or app

Saving little and often

You can squirrel away money almost without thinking about it by using a “roundup” tool or app.