Having £2,000 in savings means you are 60% less likely to fall behind on household bills and have a much lower risk of problem debt than someone with little or no money put aside. That is the headline finding from an academic study highlighting £2,000 as a key turning point in the protective power of savings.
However, if reaching £2,000 feels unattainable, the good news is that even small sums make a difference. Savings as little as £200 can help reduce the risk of falling into financial difficulties, according to researchers from the University of Bristol’s Personal Finance Research Centre.
We all know how important it is to save, and putting some numbers out there may help give people a target to aim for. This research was commissioned by the Building Societies Association to mark UK Savings Week. Running until Sunday, the week is dedicated to encouraging people to build better savings habits, whatever their starting point.
Here are some of the more painless ways to start or build up your savings pot:
### Get Your Money Working Harder
There are thought to be hundreds of billions of pounds sitting in current accounts earning little or no interest. While you need enough money in your bank account to cover bills and outgoings, any leftover funds could be moved into a savings account to earn interest.
To prevent money from piling up in your current account again, consider setting up a monthly standing order to transfer funds into your savings account just after payday. Alternatively, you can sweep any remaining balance from your current account into savings at the end of each month.
### Save Little and Often
You can save money almost without thinking about it by using roundup tools or apps. Many banks and financial providers—from high street names such as NatWest and Lloyds to newer players like Starling and Chase—offer roundup features that round up your spending to the nearest £1 and transfer the difference into a savings pot.
For example, if you spend £3.60, you will be debited £4, with 40p going into your savings. Some banks, like NatWest, even let you multiply your roundups, sending two or five times the spare change to your savings account.
Apps like Monzo offer a “1p Saving Challenge,” where 1p is moved from your personal account to your savings pot on day one, 2p on day two, 3p on day three, and so on. If you keep it up for 365 days, you will have saved £667.95, earning interest (currently 3.5%) along the way.
### Get Into the Habit with Regular Savings Accounts
Regular savings accounts often offer some of the best interest rates. These accounts generally encourage you to put aside money each month for a limited period. While you may not have to save every month, these accounts tend to work best when you do.
For instance, putting away £50 every month into an account paying 6% interest would take about three years and one month to surpass the £2,000 mark, assuming interest is calculated daily and the rate remains unchanged. Note that many accounts’ headline rates last only one year, so you may need to open new accounts once the term expires.
Often, you need to hold a current account with the same bank to qualify. The Nationwide Flex Regular Saver offers 6.5% interest but requires an existing current account. However, some accounts do not require such relationships. For example, Yorkshire Building Society’s 50 Pound Regular Saver pays 6% interest and is open to all UK residents over 16. You can deposit up to £50 monthly over 12 months; by the end, you would have £619.50 including interest. This account can be opened in branches, agencies, or online (as the 50 Pound Regular eSaver).
### Stash a Little, (Maybe) Win Big
The chance of winning a prize can make saving more exciting. NS&I Premium Bonds are the best-known option: when you buy these, you’re entered into a monthly prize draw with tax-free prizes ranging from £25 up to £1 million. The minimum investment is £25.
The downside is Premium Bonds pay no interest, making them more vulnerable to inflation than other savings options. The prize fund rate—the percentage of the total invested paid out to winners—is currently 3.6%. While you could strike it lucky, there is no guarantee you will win anything.
Coventry Building Society has recently launched the Sunny Day Saver, an easy-access account paying 4.3% interest and offering 11 monthly prize draws (the first on 17 October). You can open the account with as little as £1, and there is no requirement to save every month. However, for each month you save at least £10, you qualify for a prize draw with ten prizes of up to £500. Those who save every month for 11 months will also qualify for an additional draw next summer with a top prize of £5,000.
The savings and investment app Chip offers a Prize Savings Account where, instead of interest, you have a chance to win cash prizes every month. The current monthly prize pot is £75,000, including a grand prize of £10,000. Every £10 saved earns one entry into the draw, but you need an average minimum balance of £100 to qualify.
### Benefit from Help to Save
Help to Save is a government-backed savings account designed for working people on low incomes who receive Universal Credit. It offers a 50p bonus for every £1 you save over four years.
You can save between £1 and £50 each month—you don’t have to save every month—and receive bonuses at the end of the second and fourth years based on your savings. The maximum you can save is £2,400 over four years, with a possible bonus of up to £1,200.
### Use ISAs for Tax-Free Growth
Individual Savings Accounts (ISAs) allow you to save money tax-free. The government sets an annual maximum you can save in ISAs, currently £20,000 per tax year.
Cash ISAs are among the main options, offered by banks, building societies, and other providers. You do not pay tax on the interest earned in these accounts.
Another option is the Lifetime ISA, which helps people save towards their first home or retirement. Its biggest draw is the government bonus: up to £32,000 in theory. You must be aged 18 to 39 to open one and can pay in up to £4,000 each year until you turn 50. The government adds a 25% bonus to your savings, up to £1,000 per year.
### Check for Forgotten Savings
You might already have savings you’ve forgotten about. Several online tracing services can help reunite you with lost accounts.
A free service called My Lost Account consolidates tracing schemes from UK Finance, the Building Societies Association, and NS&I into a single website. This means you only need to fill in one application form to search for forgotten savings accounts linked to your name.
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Building your savings pot can make a real difference to your financial stability. Even starting small and using some of these easy strategies can help you work towards that crucial £2,000 milestone—and beyond.
https://www.theguardian.com/money/2025/sep/27/seven-ways-to-start-or-build-up-your-savings
