A holiday is one of the biggest one-off expenses most people face each year — flights, hotels, and spending money can add up fast. By starting early, you can lock in better prices on flights and accommodation, avoid the stress of last-minute costs, and reduce the temptation to rely on credit cards or loans.

Behavioural science shows that creating a dedicated “holiday pot” helps keep your plans on track. This is known as mental accounting — assigning money to a single goal makes you less likely to spend it impulsively elsewhere.

Research also shows that saving in advance can make a holiday more enjoyable. The process of building your fund and counting down to the trip builds excitement, making the experience feel more rewarding when you finally set off.

Use this calculator to estimate your total holiday cost. Add flights, accommodation, parking, and extras. Switch to all-inclusive mode to replace flights and accommodation with a single package price.

Having a clear savings timeline transforms a holiday from a nice idea into something tangible. When you know the exact amount you need to set aside each month, the goal stops feeling overwhelming and becomes something you can steadily work toward.

Behavioural research — including the goal-gradient effect A principle in behavioural economics showing that people naturally put in more effort as they feel closer to a goal. — shows that visible progress is highly motivating. Breaking your target into monthly milestones makes it feel achievable and helps you stay on track even when life's other expenses compete for attention.

Use the calculator below to find out how much you need to save each month, then consider automating this through a dedicated savings account so you're not relying on willpower alone.

The account you use to hold your holiday fund can make a real difference — not just to your returns, but to your discipline. An account with a competitive interest rate will help your savings grow quietly in the background, while features like instant access ensure you're not locked out of your money when it's time to book.

Consider easy-access savings accounts for flexibility, or regular saver accounts that reward consistent deposits with higher rates. Some digital banks also offer “goal pots” that ring-fence your holiday fund, helping you visualise your progress.

Behavioural studies show that keeping your holiday money in a separate account creates a mental barrier A concept in behavioural economics that makes you less likely to spend money when it's mentally assigned to a specific purpose. , reducing the temptation to dip into it.

In short, the best account is one that balances interest, access, and psychological separation — encouraging you to stay on track without overcomplicating your plan.

• Competitive interest: – Even small gains matter when you're saving over months.
• Flexible access: – Easy-access or short notice periods avoid penalties when booking.
• Regular saver perks: – Some accounts boost rates if you deposit monthly.
• Goal pots: – Digital banks with ring-fenced pots make progress more visible.
• Low or no fees: – Avoid accounts with charges that reduce your holiday fund.

Want to skip the research? Jump to Section 10 to see our hand-picked best accounts for short-term holiday savings.

Bigger trips usually require a larger budget — but the longer lead time before departure gives you more flexibility to optimise your savings strategy. By starting early, you can spread costs more comfortably and let interest — even at an easy-access rate of 4.8% AER — work quietly in the background to reduce how much you need to contribute each month.

Laddering strategies can be particularly effective for holidays planned well in advance. This involves dividing your savings across multiple accounts or fixed terms — for example, keeping part of your fund in an easy-access account for flexibility while locking another portion into 6- or 12-month fixed-rate accounts for higher returns. As each account matures, you “roll” the funds forward to the next rung in the ladder, maximising interest without sacrificing access.

Behavioural research highlights the impact of mental anchoring A cognitive bias where early milestones create a reference point, making progress towards a larger goal feel more achievable. . Laddering taps into this bias by creating smaller, tangible milestones — each maturing account feels like progress, which boosts motivation and reduces the temptation to dip into your savings early.

Use our savings calculator to experiment with timelines, monthly contributions, and interest rates. Even extending your saving window by a few months can significantly lower your monthly target, making the overall goal feel easier to reach while your money grows in the right account.

Building a holiday pot isn't just about cutting back — small, smart strategies can accelerate your progress without major lifestyle changes. Behavioural research shows that breaking goals into clear actions (like £50 from a side sale) feels more achievable than chasing one large target. Here are a few proven approaches:

Unlock cash by selling unused items on platforms like eBay or Vinted — even small sales can pay for extras such as airport transfers. Cashback apps and reward cards can turn everyday spending into bonus savings. If you receive a bonus, refund, or gift, channel it straight into your holiday fund to avoid impulse spending.

• Declutter: - Sell old tech, clothing, or furniture and earmark all proceeds for the trip.
• Cashback: - Use apps or cards with cashback rewards and move the rebates to your savings pot.
• Loyalty points: - Redeem supermarket or credit card points for flights, hotels, or vouchers.

Small adjustments, like swapping two takeaways a month for home cooking, can free up £50–£100 instantly. Techniques such as the 50/30/20 rule or envelope budgeting help ensure that savings are prioritised. Naming your account after your destination Known as “goal labelling,” this behavioural approach (e.g., naming your account “Maldives 2026”) strengthens your emotional connection to the goal and reduces the likelihood of dipping into it for unrelated spending. creates a powerful mental link, boosting your discipline and motivation.

• Cut low-value spending: - Cancel unused subscriptions or delay impulse buys.
• Use sinking funds: - Create mini-budgets for flights, activities, and spending money.

A holiday fund can quickly be derailed by unexpected costs or poor planning. Last-minute bookings, hidden fees, or relying on credit cards and loans can add unnecessary interest charges, leaving you paying for the trip long after you return.

Keep an eye on currency and payment fees. Using prepaid travel cards or fee-free debit cards can help you avoid poor exchange rates and avoidable charges abroad. It's also wise to check for hidden extras such as baggage fees, airport transfers, and travel insurance upgrades, which can all inflate costs if left unplanned.

Plan ahead where possible. Flights and hotels often rise in price as departure approaches, so locking in rates early not only saves money but also reduces stress. If you have flexibility, midweek travel and off-peak dates can offer the best value.

Consider adding a small emergency buffer — around 5 to 10% of your total budget — to cover any last-minute surprises without resorting to high-interest borrowing.

Every saving strategy has its strengths and weak points. Here's a balanced view of smart holiday-saving habits and common mistakes to avoid:

Once you’ve built your holiday fund, the next step is to spend it wisely. Timing your bookings, locking in good exchange rates, and avoiding hidden fees can stretch your savings further — sometimes by hundreds of pounds. These strategies ensure every pound you’ve saved goes as far as possible.

Prices for flights and hotels can swing dramatically depending on when and how you book. Planning your purchase carefully can make your holiday budget work harder.

• Set price alerts: – Use tools like Google Flights or Skyscanner to track fare changes and book when prices dip.
• Book early (or very late): – Booking flights 2 to 3 months ahead, or grabbing last-minute deals if you’re flexible, often secures the best rates.
• Be flexible with dates: – Shifting your departure by a day or two can lead to significant savings on both flights and accommodation.

Poor exchange rates and unnecessary fees can eat into your holiday fund. Preparing in advance helps you avoid the worst rates.

• Buy currency early: – Monitor exchange rates and purchase when they’re favourable instead of waiting until the airport.
• Use multi-currency cards: – Digital banks like Wise or Revolut let you pay in local currencies without extra fees.
• Pay in the local currency: – When given the option abroad, paying in the local currency avoids costly dynamic conversion fees.

By planning early, saving consistently, and booking smart, you can turn your holiday dreams into a reality without financial stress. With your fund ready, the final step is choosing the right savings account to keep your money working for you until the moment you book.

Look for accounts specifically designed for short-term savings—like easy-access accounts, challenger bank pots, or regular savers with no penalties. A dedicated holiday account makes it easier to track progress and avoid dipping into your fund.