How to boost your savings

RISING living costs are making it even tougher to get real returns on savings. Consumer price index (CPI) inflation hit 3% in September – the highest level in more than five years.

Here are some tips from Chris Atkinson, head of consumer distribution at Zurich, on how to get the most out of your savings:

Keep a portion of your savings in cash, but consider investing smartly, according to your income and outgoings. This can deliver real long-term returns and ensure your money grows.

Carry out a money “health check”. You may have built up a decent pot of money and your investments may have performed well originally, but it’s important not to become complacent. Carrying out a regular check on your finances will help identify any areas that need to be addressed, such as a savings account with poor returns or an investment that is losing money.

The key to making the most out of your savings – and protecting them – could be to “diversify”, which means spreading your money across a range of different investments. Bear in mind that taking a bigger risk can deliver a bigger payout, but you also have to be prepared to lose some or all of the money you have invested.

Don’t make knee-jerk decisions. Don’t let sudden rises or falls in the stock market panic you or lead you into making sudden investment decisions without the necessary research. If you have an investment plan, you can often trust it and, if necessary, simply make a few adjustments to protect your assets.

Make the most of tax-efficient savings, such as Isas and pensions. With a pension, you receive “cashback” from the Government in the form of tax relief on contributions that you make, and with a workplace pension, you can also benefit from employer contributions.