Playing the long game - Brits prioritise long-term savings

Two in five (39%) Brits are currently more focused on building their long-term savings compared to just 17% who are prioritising their short-term savings, according to new research from Tesco Bank.

Of those who are concentrating on their long-term savings - to use in a year’s time or longer - retirement comes out as the top savings goal (43%). 41% are putting money away for long-term security, while 34% are building an emergency fund for any unexpected costs in the future.

Saving for the long-term is important to help achieve future financial goals. Not only does it give you time to contribute to your savings pot little and often, but it helps your savings grow over time if locking in competitive interest rates.

Some savers are currently more focused on their short-term goals, with the aim of using their savings within the next year. For these savers, going on holiday or travelling is the most popular reason for setting money aside (36%), in addition to building an emergency fund (36%). Other short-term things Brits are saving for include covering immediate financial needs (26%), whether that be household bills or food shops, as well as having some money to treat themselves for days out or shopping (18%).

Chris Henderson, Save and Pay Director at Tesco Bank, comments:

“Getting into a savings mindset is good practice. It helps keep us focused on our financial goals and what we’re spending our money on. It’s important to remember that everyone will have different savings goals in place at different moments in life. So, people need to make sure they keep focused on their own goals and try not to compare themselves to others.

Whether you’re saving for the short or long-term, having a structure in place which considers the cost of your goal, and how long it might take to get there, can help you feel more in control of our finances.”

It’s important to take a quick pit stop on your savings journey and check the interest rate on your savings account – or Cash ISA – is still fit for purpose. Checking the market for the best rates is an important first step so that all the money you are saving is working its hardest. No matter what type of savings account is right for you, it’s important to spend time shopping around to ensure you get a competitive rate.

Every year there is a deadline for using your annual ISA allowance, which is currently £20,000. The deadline is 5th April each year, and after midnight on this date the allowance resets with the new tax year. Customers who still have some ISA allowance left for the current tax year should therefore consider acting now. If you don’t take advantage of your allowance before the tax year ends, you’ll lose it and have to use next year’s allowance instead. Typically, the earlier in the financial year you can save into an ISA, the more opportunity there is for your money to grow tax-free. Remember you don’t have to use your full allowance – but it’s important to save what you can. If you invested £3,000 in a cash ISA which offered a fixed rate of 4% (paid annually) for 12 months, then you’d earn £120 in interest over the year.

Setting up a monthly transfer from your current account to your savings account will also help you to stay on track. This helps earmark money for savings, so you don’t spend it elsewhere. A good time to do this is right after you've been paid, so you could set up a standing order to go out on, or just after payday. Whenever you spend less than you think, consider putting the extra money straight into your savings pot, as that’ll help you reach your target faster.

An undisciplined approach to subscriptions and memberships is a sure-fire way to spend needlessly. You might want to keep a spending diary to help you track what money you have coming in, and what you spend it on each month. Look out for opportunities to slim down subscriptions like streaming services or unused gym memberships.

If you have a lump sum of savings and don’t need immediate access to them, it’s worth considering a fixed rate savings product. Fixed rate savings tend to offer higher rates than an instant access account and can help protect your savings if interest rates fall, as you’ll be guaranteed interest for a set time period. You can also choose how long you want to keep your money tucked away, whether 1, 2, or even up to 5 years, which could align with a long-term savings goal nicely. It is important to note, though, that this money normally won’t be accessible until the end of the fixed term, so you’ll need to be sure you won’t need to access it early!

Teamspirit

Olivia Nelson (onelson@teamspirit.co.uk, 07392106925)

Elisha Wijesekera (ewijesekera@teamspirit.co.uk)

TescoBank@teamspirit.co.uk

Research conducted by Opinium Research on behalf of Tesco Bank. Sample was 2,000 UK adults (aged 18+). Fieldwork was undertaken 6th and 9th May 2025. All data has been weighted to be representative of the UK population.

Tesco Bank began life in 1997 and now help around 3.8 million customers to manage their money a little better every day. This means creating products and services which make customers’ lives simpler, giving them more of what they value, and rewarding their loyalty through Clubcard. Today, through a long-term strategic partnership between Barclays and Tesco, Barclays provides customers with Tesco Bank branded banking products and services. Our colleagues serve our customers seven days a week from our three main centres in Edinburgh, Glasgow, and Newcastle, and we’re also available through online and mobile banking 24/7.