Savings: Brits could get £1,000 bonus for ‘future prosperity’ | Personal finance | Finance

Many people will have important goals such as moving up the property ladder or setting aside money for retirement – ​​and these can be difficult to achieve. However, one expert has pointed to a formula that could help Britons find these goals more achievable.

Express.co.uk spoke to Rob Gardner, Chief Investment Officer at St. James’ Place Wealth Management, who provided additional insight.

He pointed to the lifetime ISA as a key way for Britons to climb the property ladder or help their children or grandchildren as prices continue to soar.

The account allows Britons between the ages of 18 and 40 to buy their first home or save for later, paying up to £4,000 a year up to the age of 50.

The government adds a 25% bonus to their savings, up to a maximum of £1,000 a year.

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He urged individuals to think about their daily vices, whether it be coffee, a Netflix subscription, getting their nails done or whatever.

Then people should calculate the annual price of this vice by taking what they spend per day and multiplying it over the year.

By reducing this for a decade, individuals can easily multiply the figure to see how much they could save.

But the expert pointed out that multiplying this figure by 1.25, then by 1.5 is perhaps the most important.

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This part of the equation, however, can only be achieved if a person implements an additional action.

Mr Gardner explained: ‘The figure you have is the amount of money you could keep and grow over ten years to buy a house.

“I asked you to multiply by 1.25% the amount you have saved over ten years, because the government wants you to save and gives you 25p for every pound in your LISA.

“So if you were to save £1,000, you get a free £250 top-up. And who doesn’t love free money?

“I then asked you to multiply that number by 1.5 – the amount of compound growth you could receive on your money if you invest and grow your savings over ten years by investing in a LISA of stocks and shares. shares.”

Mr. Gardner assumed an average growth rate of seven percent over 10 years through a diversified investment portfolio.

He added that individuals should be able to double their money every ten years and that on average the money saved regularly over this period increases by about 1.5 times.

He continued: “The cost of a coffee a day, or getting your nails done every month, or a drink after work every week could help you build up the deposit you need for a house – just.

“There’s absolutely no reason why someone on an average salary can’t save enough money in ten years for a deposit. You have only to exchange one of today’s vices for future prosperity.

“So if you’re thinking of saving for a house, know that coffee, the one you buy on the way to work every morning, doesn’t just cost you £2.50, it costs you nearly £4.70 against your future security deposit.

“That way you can make a better choice about what’s important to you.”