1<\/p>\n Plum’s personal finance expert Rajan Lakhani explains how to start saving on a low salaryCredit: Plum<\/p>\n The Sun has chatted to Plum\u2019s personal finance expert Rajan Lakhani<\/a> about how you can start saving on a salary of around \u00a325,000.\u00a0<\/p>\n Here\u2019s what he said\u2026\u00a0<\/p>\n Work out how much you can afford to save\u00a0<\/p>\n The first step you should take is to sit down and work out what\u2019s affordable for you to save.\u00a0<\/p>\n You might want to do this manually by listing all your incomings – such as your salary and any benefits<\/a> you receive – and then all your outgoings, such as rent, bills<\/a> and average food costs.\u00a0<\/p>\n From here you can work out how much you have left over per month.\u00a0<\/p>\n Alternatively you can use an app like Plum<\/a> which connects to your bank account and can calculate how much you can afford to save based on your outgoings.\u00a0<\/p>\n Rajan says most people are surprised by how much they can save, but you shouldn\u2019t be put off if you can only afford to set aside \u00a35 or \u00a310 a month for now.\u00a0<\/p>\n \u201cThat might not sound like a huge amount but that money<\/a> will build, particularly if it’s earning interest,\u201d he says.<\/p>\n \u201cIt’s really important just to take that first step and then see what you can do.\u201d<\/p>\n Reduce your spending<\/p>\n If you want to give your savings an extra boost, you should look at where you can cut costs.\u00a0<\/p>\n Switch bank accounts for free perks<\/p>\n Many people saw their bills rise in April but there are some ways you can reduce the costs of essentials<\/a>.\u00a0<\/p>\n For example, you should use price comparison websites to look for better deals on your mobile phone, broadband<\/a> and energy<\/a> bills.\u00a0<\/p>\n Of course you\u2019ll need to take into account any exit fees if you currently have a contract with a provider.\u00a0<\/p>\n \u201cA lot of these organisations are relying on you not taking any action and just simply renewing. <\/p>\n “And actually, it really, really does pay to have a look, compare the markets<\/a>, compare the different prices,\u201d Rajan says.\u00a0<\/p>\n \u201cIf you really want to stay with your provider, there’s no harm in giving them a call and saying \u2018look I found this deal, I might switch to it, what’s the best offer that you can give me\u2019.\u201d<\/p>\n You should also do a sweep of your subscriptions to make sure you aren\u2019t signed up to anything you\u2019re not using.\u00a0<\/p>\n Another option to save money is to sign up to as many loyalty schemes<\/a> as you can – if you\u2019re happy with shops using your data.\u00a0<\/p>\n You can often get cheaper prices or build up points to spend in stores when you sign up to shopping loyalty schemes, such as Tesco\u2019s ClubCard or the Boots<\/a> Advantage Card.\u00a0<\/p>\n Check if you can get any benefits<\/p>\n You could give your income a boost by taking advantage of any benefits you\u2019re eligible for from the Government<\/a>.\u00a0<\/p>\n For example, lots of parents are unaware of the benefits available to them<\/a> such as 30 hours of free childcare, Child Benefit<\/a>, and extra Universal Credit<\/a> payments.<\/p>\n If you\u2019re married, you can get Marriage<\/a> Tax Allowance which could help you reduce the amount of tax you pay. <\/p>\n By cutting your outgoings and boosting your income, that can give you more breathing space to save extra.\u00a0<\/p>\n Have an emergency fund in place<\/p>\n If you\u2019re earning around \u00a325,000, it\u2019s really important to have an emergency fund<\/a> to fall back on in case you have an unexpected big expense or you lose your job.\u00a0<\/p>\n Experts typically recommend you have about three to six months worth of your salary set aside.<\/p>\n So if you\u2019re on \u00a325,000, this would work out at between \u00a35,316 to \u00a310,632 after tax.\u00a0<\/p>\n This emergency fund should be in an easy access savings account<\/a> so you can get it quickly if you need to.\u00a0<\/p>\n Rajan says it\u2019s better to have this money in cash savings rather than invested as you want your money to be secure in case you need to dip into it.\u00a0<\/p>\n He recommends looking for savings accounts that have interest rates<\/a> above 4% currently as these will give you a decent return on your savings.\u00a0<\/p>\n How much should you aim to save?<\/p>\n Exactly how much you can save will depend on factors like your outgoings, your lifestyle and whether you have children<\/a> or not.<\/p>\n Rajan says a ballpark figure you can use is the 50-30-20 rule.\u00a0<\/p>\n This means spending 50% on your \u201cneeds\u201d like housing costs and bills, 30% on your \u201cwants\u201d like clothes and entertainment, and 20% on your savings.\u00a0<\/p>\n So if your take-home pay is \u00a31,772.58 per month, you can expect to spend \u00a3886.29 on your \u201cneeds\u201d.\u00a0<\/p>\n Then you would spend \u00a3590.86 on your \u201cwants\u201d and save away \u00a3354.52 per month.\u00a0<\/p>\n However, Rajan says saving 20% of your salary can seem like a \u201clarge figure\u201d and whether that\u2019s possible depends on your circumstances.<\/p>\n For example, households have seen expenses like rent, energy bills<\/a>, council tax<\/a> and water bills increase recently.\u00a0<\/p>\n \u201cFor a lot of people, 20% will be very difficult to put aside. <\/p>\n “Having that 20% ambition can encourage you to save more but it depends on your circumstances and what works for you,\u201d he says.<\/p>\n \u201cThe key thing is just to start giving saving a go and you may be surprised by how much you are able to set aside.\u201d\u00a0<\/p>\n Small ways you can save<\/p>\n If you\u2019re not sure how to start saving, Rajan recommends using apps to automate setting money aside<\/a> for you.\u00a0<\/p>\n Plum has a round-up feature that rounds up every purchase you make to the nearest pound and then saves away the extra money.\u00a0<\/p>\n So if you\u2019ve bought something for \u00a31.60, the app will automatically save 40p for you.\u00a0<\/p>\n Another feature you can try is the rainy day rule, which sets money aside whenever there\u2019s a day it rains in the UK.\u00a0<\/p>\n Or there\u2019s the 1p Challenge<\/a>, which starts off by saving 1p on your first day and then sets aside a penny more every day.<\/p>\n It means you\u2019ll save up to \u00a3667.95 over the course of a year.<\/p>\n SAVING ACCOUNT TYPES<\/p>\n THERE are four types of savings accounts: fixed, notice, easy access, and regular savers.<\/p>\n Separately, there are ISAs or individual savings accounts which allow individuals to save up to \u00a320,000 a year tax-free.<\/p>\n But we’ve rounded up the main types of conventional savings accounts below.<\/p>\n FIXED-RATE<\/strong><\/p>\n A\u00a0fixed-rate savings account\u00a0or fixed-rate bond offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term.<\/p>\n This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account.<\/p>\n Some providers give the option to withdraw, but it comes with a hefty fee.<\/p>\n NOTICE<\/strong><\/p>\n Notice accounts offer slightly lower rates in exchange for more flexibility when accessing your cash.<\/p>\n These accounts don’t lock your cash away for as long as a typical fixed bond account.<\/p>\n You’ll need to give advance notice to your bank – up to 180 days in some cases – before you can make a withdrawal or you’ll lose the interest.<\/p>\n EASY-ACCESS<\/strong><\/p>\n An\u00a0easy-access account\u00a0does what it says on the tin and usually allows unlimited cash withdrawals.<\/p>\n These accounts tend to offer lower returns, but they are a good option if you want the freedom to move your money without being charged a penalty fee.<\/p>\n REGULAR SAVER<\/strong><\/p>\n These accounts pay some of the best returns as long as you pay in a set amount each month.<\/p>\n You’ll usually need to hold a current account with providers to access the best rates.<\/p>\n However, if you have a lot of money to save, these accounts often come with monthly deposit limits.<\/p>\n How to put your savings to work<\/p>\n Once you\u2019ve started saving, you should make sure you get the most out of your money.\u00a0<\/p>\n That means helping it grow by either putting it in a savings account where you are receiving interest above the rate of inflation<\/a>, or investing<\/a> it.\u00a0<\/p>\n For reference, the current inflation rate is 3.5%<\/a>.\u00a0<\/p>\n Rajan says you can get better interest rates by putting your money into a fixed-term savings account – but you should make sure you have an emergency fund set aside first for any immediate expenses.\u00a0<\/p>\n If you lock away your money into a fixed account<\/a>, your interest rate will typically be higher than with an easy access account.\u00a0<\/p>\n You should also shop around for the best rates.\u00a0<\/p>\n Often online-only banks offer higher rates as they have fewer costs, but you should check they are registered with the Financial Conduct Authority<\/a> and that your money would be protected by the Financial Services Compensation Scheme.\u00a0<\/p>\n Rajan also recommends looking at ISA accounts as you\u2019ll be able to earn interest on your savings tax-free up to \u00a320,000 per tax year.\u00a0<\/p>\n Plus, the interest rates on Cash ISAs<\/a> are some of the highest available right now.\u00a0<\/p>\n Another option is to invest your money<\/a>.\u00a0<\/p>\n Rajan says investments have typically outperformed cash savings over the years – but there are things you should consider.\u00a0<\/p>\n Firstly, you\u2019ll need to be willing to put your money away for a longer period of time – at least five years – because markets can fluctuate and it will give your money a better chance of growing if you keep it invested for longer.\u00a0<\/p>\n You should be aware that you can lose money by investing and be prepared to take that risk.\u00a0<\/p>\n Because of this, it\u2019s crucial to still have an emergency fund in case you have any unexpected expenses.\u00a0<\/p>\n Rajan says: \u201cThe most important thing for you is, is this something that I’m happy to do? Is this something that I’m comfortable doing?<\/p>\n \u201cWhen it comes to your savings it\u2019s really important to make sure that you are comfortable with the choices you make.\u201d\u00a0<\/p>\n How to get the best savings rates<\/p>\n![\"Headshot](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/06\/NINTCHDBPICT001002362069.jpg\")
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