How Much Money Should You Have Saved By 24

Where you are at 30, may be very different to where your friends and colleagues of the same age are at in their lives.

But having an idea of what good savings look like for someone in their 30s, can help you work out where you need to prioritise.

In this article, we explain:

How much you should have in your pension
How much you should have in your emergency savings fund
Tips for helping you reach your savings goals

How much you have managed to save by 30 depends on your earnings, goals and lifestyle

How much does average 30 year old have saved?

It is tempting to think that, to be a successful saver, you must have a certain amount of money in your bank account by a certain age.

In reality, though, there is no one-size-fits-all figures you should have in savings and investments by the age of 30, as this will depend on each individual's:

annual income
savings goals
retirement plans including desired retirement age
lifestyle
student loans

According to the ONS the median range of savings for a 30 years old lies between £500 to £5,000 – this does not include pension savings.

Being armed with the right information about savings will enable you to build up as much of a nest-egg as possible for your future, even if you can't set age targets in stone.

How much should you have in your pension?

Your retirement savings should be twice your annual salary by your mid-30s, according to a study by the Transamerica Centre for Retirement Studies.

Retirement might seem a long time away, but what you can tuck away in a pension now will form the bedrock of your retirement income. That is because they will have a long time in which to grow.

The earlier you start, the bigger the difference it will make to your pension pot thanks to the wonder that is compound interest.

How much money should you be contributing to your pension?

An often-cited personal finance rule of thumb is to divide your age by two and put this percentage of your salary away every year.

For example: Starting saving at age 30? You should be looking to put away 15% of your income.

Remember: take advantage of any workplace pension to boost your retirement accounts – it's free money from your employer. Some companies will raise the amount they contribute if you are willing to match it – so look at that option.

Comparing your pension with the national average for your age may help you to see if you are on track, for example, these findings from PensionBee:

Generation Z (18-23)
- Average pension pot = £21,765
- Percentage who don't have any money saved = 3%

Millennials (24-40)
- Average pension pot = £22,049
- Percentage who don't have any money saved = 4%

Gen X (41-54)
- Average pension pot = £33,547
- Percentage who don't have any money saved = 6%

Top rated self-invested personal pensions (SIPPs)

Our independent ratings will help you find the right self-invested personal pension for you

Close Brothers Asset Management

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Vanguard Asset Management

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Aviva

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How much should you have in an emergency fund?

You need to balance your future savings, such as a pension, alongside what you may need urgently in the short term.

It's vital to have an accessible emergency fund, in cash for any unexpected bills or life events – if your car breaks down, for example, or you have to buy a new washing machine. It can also prevent panic if you lose your job.

Aim to have 3 to 6 months' worth of outgoings – housing costs, groceries and bills – in your emergency pot

The size of your emergency fund does not depend on your age, but rather your outgoings. If you have two kids and a mortgage at 30, you are likely to need more than your single friend who still lives at home.

Tips for reaching your savings goals

If you feel that your savings are not on track, it may seem daunting to get started with a pension or even an emergency fund.

Break your goal down into manageable chunks: Even small amounts can lead to a substantial fund over time
Take a look at your outgoings – using apps such as You Need a Budget or Money Dashboard can help, or simply by going through your bank statements
Identify unnecessary drains – get rid of the excess spend on your bank balance, such as unused subscriptions
Set up a separate account for your savings: This reduces the temptation to spend that money on everyday items
Set up automated payments into this new account: Do this early in the month, or using your bank's "sweep" facility to remove extra cash from your current account every month just after before are paid
Get appy – Some apps, such as Plum, also move money automatically into your savings account using an algorithm, meaning that you can save cash without even noticing

If you want to inspiration to save, check out our 20 simple ways to save money

Getting started with investing

If you are putting money away for the long term, investing in the markets will boost its growth potential.

The Barclays Equity Gilt Study shows that, over most of the five-year periods since 1899, the returns on money invested in the stock market have beaten those from a cash savings account.

Markets can be volatile and as a result so could the performance of your money. As such investing is not suitable for short-term goals. Longer-term goal, such as a house deposit, for school fees or home improvements, are ideal as you can put money away and hope it grows over time.

The difference that investment can make over the long term when compared with saving can be significant.

New to investing? Check out our guide through the maze

FINANCIAL GOAL

Saving for the average UK house deposit of £59,000
- Amount needed to invest each month over 10 years (assuming 5% annual growth) = £380
- Your contribution over 10 years = £45,600
- Investment growth in 10 years = £13,296
- Total you would have after 10 years if you had put the same each month into a savings account at 0.16 % = £45,964

A £10,000 emergency fund
- Amount needed to invest each month over 10 years to achieve this (assuming 5% annual growth) = £65
- Your contribution over 10 years = £7,800
- Investment growth in 10 years = £2,274
- Total you would have after 10 years if you had put the same each month into a savings account at 0.16 % = £7,862

Pay off the average student loan debt of £35,000
- Amount needed to invest each month over 10 years to achieve this (assuming 5% annual growth) = £226
- Your contribution over 10 years = £27,120
- Investment growth in 10 years = £7,908
- Total you would have after 10 years if you had put the same each month into a savings account at 0.16 % = £27,336

If you are new to investing, it is important that you understand what assets you are buying.

Some people invest directly in the shares of individual companies, while others choose funds that pool your money with that of others and invest in a diverse range of companies and assets.

Barclays Wealth Global Markets Portfolios

Coutts

Coutts Invest

evestor

eVestor portfolio

There's no time like the present

Whatever your age, you can make a huge difference to your financial resilience and your savings by taking a few simple steps.

Taking control of your finances when young gives you plenty of time to make a real difference when you are older, while building up an emergency fund makes it less likely that your plans will be blown off course.

A jar for savings — The key to savings is just to get started

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