Money Makeover ‘I’m engaged, but how can we afford the wedding?’

As prices soar, a couple considers the best way to save up for their big day, as well as a new kitchen. By Ruby Hinchliffe

Like many who have got engaged during an era of high inflation, bride-to-be Emily Stilwell is suddenly wondering how she and her fiancé are going to pay for it all.

They hope they can save enough before their 2026 wedding. The 36-year- old bought a house with her partner back in November 2020. They put down a £ 9,000 deposit on a £217,500 house in Southampton, and fixed an interest rate of 2.99pc until November 2025. The joint-mortgage payments cost £735 a month.

Since then, the couple has spent all their savings on revamping the patio and paying down credit.

Now, with a wedding on the horizon and plans to renovate the kitchen next, they need to start saving all over again.

The two jointly pay into a shared, easy-access current account with NatWest each month. Stilwell, a university administrator, says she earns slightly more than her partner, who is a telecoms engineer.

After the mortgage, her £ 181 monthly car finance bill – 40pc of which she’s already paid off – and other outgoings, both parties leave what’s left of their salaries in their NatWest account as savings. The house is currently their only investment.

Stilwell says: “We want to know where we can save and what a good savings account is. But we also want to be able to move our money around and not be penalised for spending it.

“We’re with NatWest because my parents worked there in the 1970s and 1980s. It was my bank as a kid.”

She is also wondering what to do with her university pensions having worked in the higher education sector for 12 years, and wants to know whether to keep her pensions in separate pots or consolidate them. Stilwell says:

Earnings from the easy-access portion of the flexible Zopa Smart Isa

The interest you get from a Starling joint account on balances up to £5,000, whereas NatWest pays nothing “Pensions are another world to me. They’re so hard to know what to do with. I don’t even know how much is in it. It’d be good to, at the very least, find out where it is and how much is there.”

George Sweeney

Investing and pensions deputy editor at comparison site, Finder.com

Although it feels frustrating being back to square one with savings, you’re not alone. Half of people in the UK have less than £1,000 saved.

However, you’ve cleared your immediate debts, managed to get on the property ladder and it sounds like your pension is on track, setting you up well for the coming years. With your mortgage, higher rates could stick around.

If the Bank Rate and home loans stay near 5pc, it could mean paying a few extra hundred pounds a month. If your fixed costs do go up, keep in mind this will impact how much you’re able to save towards the wedding and kitchen.

For your savings, take an active approach instead of keeping whatever’s left. Ideally, both agree on a percentage of your salaries to save, and transfer into a separate account each payday.

This keeps things fair if you both earn different amounts. For budgeting and saving, I’m a fan of the 50/30/20 rule. So, 50pc of your income is for living expenses and bills, the 30pc is for guilt-free spending on whatever you like, and 20pc each month is saved. If you can, increase the saving percentage while trimming living expenses.

Setting up a cash Isa for your saving goals allows you to pay in up to £20,000 each year and any interest is protected from being taxed. An appealing option is the flexible Zopa Smart Isa. Reason being, unlike other Isas, you can spread your savings across easy- access and fixed- term pots. Currently, you can earn 5.08pc with the easy-access portion of this account and

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telegraph.co.uk/ moneynewsletter there’s no restrictions on the number of withdrawals, so you can dip in and out as you please.

The fixed- term Zopa Isa pots pay 5.32pc and 5.12pc for one and two years respectively. If you save up a lump sum for the wedding, you can lock that away at a decent rate. For your joint account, I’d recommend Starling instead of NatWest. Starling pays 3.25pc interest on balances up to £5,000, whereas NatWest pays nothing. Although this won’t be where you primarily save, it’s good to earn something on idle cash. Other benefits include Starling’s “round-up” feature and the ability to pay bills and direct debits from separate “spaces”.

Consolidation is a good idea for your pensions, but it depends on the providers. Presumably, they’re both defined contributions, yet being from universities there may be unique benefits. Having everything under one roof makes tracking and managing your retirement pots easier. But, it’s important to check for any costs, penalties or downsides – because these are specific to each pension plan. If you do consolidate, choose the option with the lowest fees, best investment choices and whichever gives you the most flexibility or perks.

James Corcoran

Senior chartered financial planner at Lumin Wealth

The first question about savings is whether to invest and take risk, or whether to utilise savings accounts that may not give as good a return, but guarantee your capital is safe.

In this case, Emily doesn’t have any savings and will need access to the funds in the short to medium term. She can’t really afford to take risks, so it is a case of maximising what she can through savings. Thankfully, there are decent savings rates available. She could look at a regular saver – the best

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You must be willing to be photographed for the article. interest rate right now is 8pc variable with Nationwide, although she would need to be an existing customer, and the maximum to pay in would be £200 per month.

Beyond that, looking at easy-access cash Isas or savings accounts you can get over 5pc – for instance, Metro Bank is offering 5.22pc on savings. The key thing, though, is to keep an eye on them, because once the rate term ends they will drop off and you’ll need to search for the best rate again.

In terms of the overall planning, there are a couple of options. For instance, if they were able to save £200 per month for the next five years then, based on a more reasonable growth figure of 3pc, this would get them to £12,948. Or, if they want to get married in three years and need £ 10,000, then we could work back from that point. So, if they saved £270 per month based on 3pc, again that would get them to £10,000.

On pensions, the first step would be for Emily to get hold of the missing information about the fund. She should be able to get that via her online account, or she can request an up-to- date statement from the pension providers.

The key things to ascertain here are the costs and charges of the plans, plus whether there are any particular benefits or restrictions in the plans. If they are relatively modern defined contribution plans, then they are unlikely to feature anything particularly unusual – such as guaranteed annuity rates – but it is worth checking.

Typically for ease of administration, cost efficiencies, and because you can sometimes qualify for fund size discounts, it does make sense to consolidate, but it is worth checking your plans in detail, as you don’t want to transfer and lose out on any valuable benefits that your plans may contain.