Can you boost your savings with free money?

Workplace pension

There’s no downside to getting help with your pension contributions. That’s what happens when you pay into a workplace pension. It’s one big reason why, in 2021, over 22.6 million UK adults were paying into one. If you are too:

• Your employer will top up your workplace pension payments with at least 3% of your salary
• You're saving in a very tax-efficient way, because when you pay into your pension, some of the money that would have gone to the government as tax goes towards your pension instead which reduces how much income tax you pay

Paying into your pension might also cut down any student loan repayments you might be making, so you could save money there as well.

We go into more detail in our A Little Bit Richer podcast episode, Pensions - Exercising Control and Risk!

Personal pension

Not everyone’s on a payroll so not everyone can get a workplace pension. But you can still get a pension boost if you save into a personal pension.

• Your pension provider will claim 20% tax relief and add this to your pension pot. You can then claim back any additional tax relief through your annual self-assessment tax return.

You can choose when and how you pay into it, stopping and starting your payments as needed. And if you are saving into one, you’re in good company. In 2020/21, 6.8 million UK adults had a personal pension. They all know that just putting a little money into one now can make a difference later on. You can learn more on our pension tax relief and benefits page.

Lifetime ISAs

If you’re aged between 18 and 39, and saving for your first home, a Lifetime ISA or LISA could be right for you. You can put in up to £4,000 a year and get up to £1,000 extra from the government:

• The government will add a 25% bonus every year to any money you put into a Lifetime ISA (subject to their terms and conditions)

LISAs have only been around since 2017, so fewer people have signed up for them. Back in 2020/21, just over half a million UK adults were saving into one.

ISAs

Ok, so we’re cheating a bit with ISAs. Nobody just gives you money when you save into them. But you can still end up taking out more than you put in.

• Cash ISAs pay interest on your savings, so your money will grow over the years
• Stocks & shares ISAs let you invest your money, with the aim of achieving better growth over interest accounts. They're longer term investments of at least five years.

You can find out more about and compare them in our Cash ISA vs stocks & shares ISA article. 

Remember that for all the investment products we've mentioned, the value of your investment will go down as well as up. It isn’t guaranteed, so you might get back less than you put in. Tax rules may change in the future too, and are subject to your individual circumstances.

Help to Save

If you’re on Working Tax Credit or Universal Credit, you might not feel able to save. But even if you can only put away pennies, the Government will add to them through its Help to Save scheme.

• The government will add 50p for every pound you save for up to four years

You can save between £1 and £50 a month, and you’re free to stop and start whenever you choose.

What should I do next?

Hopefully that’s inspired you to get out there and join the millions who are already enjoying a savings boost from their employer, the government or both. Or if you’re already doing that, perhaps it’s set you thinking about other ways to save.

For more information, we’d recommend:

• A visit to the MoneyHelper website for some free savings guidance
• Checking out our Types of ISA or Types of pension articles
• Finding a financial adviser on the Unbiased website