In my last article, I explained why protecting yourself – your biggest financial asset, is the foundation of a strong financial plan. Income protection, life cover and critical illness cover give you peace of mind if the unexpected happens. But once your income is protected, what comes next?
The answer is savings and investments. While protection gives you a firm base, savings and investments help you build towards your future.
Why savings and investments matter
Relying only on your income is not enough in today’s economy. With the cost of living rising and inflation reducing the value of cash, planning for the future has never been more important.
The Office for National Statistics (ONS) reports that the UK household saving ratio dropped to 10.9% in early 2025 – far lower than the levels seen during the pandemic. At the same time, inflation has averaged 4.1% this year, steadily reducing the real value of uninvested cash.
In short, if your money is not growing, it is losing value. Savings and investments ensure you are not just getting by but preparing to thrive.
Savings: your short-term shield
Savings are your first step towards financial security. They give you a safety net for life’s surprises, so you don’t need to rely on borrowing.
Key areas to focus on:
- Emergency fund – aim for 3–6 months of essential spending in an easy-access account.
- Short to medium-term goals – set aside money for things like a holiday, wedding or new car without disrupting your budget.
- Cash ISAs – save up to £20,000 a year tax-free. Cash ISAs provide security and guaranteed interest.
Investments: growing your wealth
Once your savings are in place, investing allows your money to work harder over the long term. Unlike savings, which are low risk but low growth, investments help you beat inflation and build real wealth.
Options to consider:
- Stocks & Shares ISAs – potential for higher returns through funds, shares and bonds.
- Pensions – one of the most tax-efficient ways to grow wealth, boosted by employer contributions and tax relief.
- General Investment Accounts (GIAs) – a flexible option once you’ve used your ISA allowance.
Over time, consistent investing can deliver significant growth. For example, investing £100 a month with an average return of 6% could grow to more than £16,500 in 10 years, and over £100,000 in 30 years.
Protection, savings and investments – working together
Think of your finances like building a house:
- Protection is the foundation.
- Savings are the frame.
- Investments are the bricks and mortar.
Together, they create a structure strong enough to support your goals, whether that’s buying a home, retiring early or leaving a legacy.
Start small, think long term
You don’t need thousands to begin. Starting with as little as £25 a month makes a difference – the key is consistency and time. As the proverb says: the best time to plant a tree was 20 years ago. The second-best time is now.
Building on your foundation
We insure our homes, our cars and our health. Protecting our income is the first step, but true financial wellbeing comes from planning ahead. Savings and investments are not just tools, they provide freedom, choice and confidence in your future.
You have laid the foundation. Now it’s time to build upwards.
Save smart. Invest wisely. Plan confidently.
All financial services provided by Tees Wealth are regulated by the Financial Conduct Authority.
This material is for informational purposes only and does not constitute an offer or solicitation for the purchase or sale of any financial instrument. It is not intended as accounting, legal, tax, or investment advice. The information provided is correct at the time of writing.
Tees is a trading name of Tees Financial Limited, authorised and regulated by the Financial Conduct Authority (FCA), Registered number 211314, and registered in England and Wales (Company number 4342506).
