The first and most important step is to clearly define what you are saving for. Be specific about both the amount you need and the purpose of the savings. Having a well-defined goal will help you stay focused and make it easier to create a realistic savings plan.

• What are you saving for?
• How much do you need to reach your goal?

• Property deposit: - £30,000
  This is a common goal for first-time homebuyers. The average price of a property in the UK is around £300,000, so a 10% deposit typically amounts to approximately £30,000. Depending on where you live, this amount may vary, so consider adjusting based on the average house prices in your area.
• Wedding: - £10,000
  The cost of a wedding can vary significantly, but the average cost in the UK is around £18,000 to £20,000. Many couples opt for smaller, more intimate ceremonies and aim to spend closer to £10,000.
• School fees: - £120,000
  Private school fees can be substantial. On average, yearly fees for private schools in the UK range from £12,000 to £18,000 per year. Over several years of education, these costs can add up to £120,000 or more.

The time it takes to reach your financial goal depends heavily on the rate of return your savings or investments generate. Higher returns can accelerate your progress — but they also introduce more uncertainty. Different financial products offer varying levels of stability, growth potential, and risk. Understanding these trade-offs is key to choosing the right strategy.

Savings accounts provide a stable and predictable return, making them a reliable choice for short-term goals. Interest rates typically range from 3% to 4% per year, although this can fluctuate with economic conditions. The main downside is that returns may not keep pace with inflation — meaning your money could lose purchasing power over time.

Because of this, savings are generally best suited to goals within the next few years. If your timeline is under five years, investing is usually not recommended due to the risk of short-term market losses. If your plannign on reaching your goal by saving have a read of our savings time to target guide instead.

Unlike saving, investment returns are more difficult to predict — but over the long term, they have historically delivered stronger growth. Equity markets, for example, have averaged annual returns of around 7 to 13% Based on annualised S&P 500 total returns (including dividends) as of March 2025:

• 5-year: 13.25%
• 10-year: 12.03%
• 15-year: 13.35%
• 20-year: 10.35%
• 25-year: 7.45%

Source: OfficialData.org .

This potential for higher growth is what makes investing more suitable for goals that are at least five years away. A longer time horizon allows your portfolio to recover from short-term market dips and benefit from the power of

To help standardise projections across financial products, the Financial Conduct Authority (FCA) sets illustrative growth rates The FCA's prescribed growth rates of 2% (low), 5% (moderate), and 8% (high) are regulatory benchmarks used in forecasts to ensure consistency and comparability.

They are not predictions or tailored to specific portfolios, but serve as reference points for evaluating investment potential. at 2% (low), 5% (moderate), and 8% (high).

These rates are particularly relevant for long-term investments like pensions and ISAs, where compounding can significantly amplify growth over decades. However, they are less appropriate for short-term investments, where market fluctuations have a greater impact and returns are less predictable.

The FCA's illustrative growth rates are intended for use with portfolios that include a moderate to high proportion of equities. Applying the higher end of the range to a cautious portfolio with limited equity exposure may be inappropriate. For instance, a portfolio with only 20% in equities is unlikely to achieve such a return.

Lower-risk portfolios, which lean more heavily on bonds and cash, tend to deliver more modest growth typically in the range of 2% to 4%. In contrast, funds with a higher weighting of equities carry more volatility, but also greater long-term growth potential, which may justify the use of higher projection rates.

The FCA provides guidance The FCA advises against using the same projection rates across products with materially different risk profiles or asset mixes. FCA COBS 13 Annex 2 to ensure that projections remain appropriate to the underlying investment strategy.

By this point, you've defined your goal, decided how much you can afford to contribute each month, and estimated your expected rate of return. Now it's time to run the numbers and figure out how long it will take to reach your target.

If you want to figure out how much to save each month to hit your target instead, check out our dedicated monthly amount needed calculator. It works in reverse and helps you find the monthly contribution needed to stay on track. But if you know how much you can afford to save, the formula for calculating time is below.

Formula: The formula for calculating the time it'll take to reach your goal is:

To simplify things we've developed a calculator below. If you want more control, try our stand alone time to target calculator.

When setting your goal, it's important to consider inflation as this will reduce the purchasing power of your money over time.

Inflation typically ranges from 2% to 3% per year, depending on the country and economic conditions. If you don't account for it, you may fall short of your goal, even if you hit your nominal savings target.

Formula: To adjust an amount for the effects of inflation, use the following formula:

Use our calculator to understand the effect inflation will have on your savings goal. As prices rise over time, the purchasing power of money falls, which means the same amount of money will buy less in the future than it does today.

If you want to save for the future, and you want that to have the same value it has today, you'll need to adjust for inflation. This tool helps you do that, so you can plan more accurately for the future.

For more features, check out our full future value calculator.

Your investment portfolio should reflect your financial goals, time horizon, and risk tolerance. Carefully considering all three will help ensure you have the money you need, exactly when you need it.

These factors shape your asset allocation Asset allocation refers to how your investments are split among different asset classes, such as stocks, bonds and cash, to balance risk and potential return.

A carefully considered allocation can help you achieve your financial goals while managing your comfort with risk and market volatility. . Your ideal mix depends on how long you plan to invest, your comfort with market ups and downs, and your financial objectives.

Broadly speaking, stocks offer greater long-term growth potential but come with more short-term volatility. Bonds generally provide stability and predictable income, making them better suited to investors with a conservative approach or shorter timelines.

Ultimately, the best asset mix varies from person to person, and creating your portfolio is a significant topic in itself. To explore the key differences between stocks and bonds in detail, see our full guide: Stocks vs. Bonds.

Successful investing requires regular attention - it's not something you can set and forget. Regular reviews help ensure you stay on track, adapt to changes, and make the most of your savings over time.

Before you start saving, check that your plan aligns with your goal, financial situation, and time horizon. The savings product you choose should reflect both your timeframe and your tolerance for risk.

Reviewing your progress regularly helps you stay on course. Changes in income, expenses, inflation, or interest rates may require you to adapt your plan to stay on target.

• Check your progress: - Set a reminder to review your savings at least once a year. Make sure your balance is growing in line with your expectations, and adjust your contributions if needed.
• Increase contributions when possible: - If you get a pay rise or manage to reduce expenses, consider putting more aside. Even small increases can make a big difference over time.
• Reassess your target: - Your financial goals may shift. If costs rise due to inflation or your priorities change, revisit your savings target and timeline.
• Rebalance your portfolio: - Review your investments annually. If your allocations have drifted from your intended mix, rebalance to maintain your strategy. For simplicity, consider a multi-asset fund A multi-asset fund is a single investment that combines different asset types such as stocks, bonds, and cash into one professionally managed portfolio.
  
  These funds are designed to maintain a balanced allocation and are automatically rebalanced over time, making them ideal for investors who prefer a hands-off approach. which will manage diversification and rebalancing for you.

A flexible savings strategy helps you stay in control, adapt to life changes, and stay focused on your long-term goals.