Recent research has shown that the average Briton has just 52 days worth of savings – that is, if they were made unemployed today, their savings would only be enough to cover 52 days before the money ran out. Scarily, over a third of people were found to have just 11 days worth of savings. Another recent survey has shown that only around half of Brits are putting aside enough money to give them an adequate income for their retirement years.

So how much money do you really need? Most people do not have personal income protection so if they were suddenly made unemployed, they could be in serious financial trouble pretty quickly. Personal income protection is definitely worth thinking about as it ensures you have an income should something unexpected happen and you have to stop working.

If you aren’t keen on having personal income protection, an emergency fund is a must – and the funds in it should be easily accessible. Particularly in today’s climate, having your money tied up in non-accessible funds such as in equity in your house is not a good idea. Having some money in an instant access is definitely a wise move.

If you have some money spare, it is worth looking at higher rated interest accounts. These may not be instant access – you may have to give 30 days notice, or the money may be tied in for a given amount of time – however the rates of interest are generally higher than those on the instant savings accounts. Also look out for ISA accounts which are tax-free.

Pensions are also something to consider, although the amount you pay in may vary according to your circumstances. You will need to estimate what sort of income you require for a comfortable standard of living – obviously this figure will vary in each individual case, for example if you own your own house with no mortgage outstanding you may require less of an income than someone who is still renting. Taking into account inflation, you will then need to work out the rate of return and from this, calculate how much you will need in your pension pot. The earlier you start your pension the better – the later you leave it, the more it will cost you.

Overall, it is wise to take a look at your finances at least once a year, regardless of your financial position. This will ensure that you have the best rates for all your accounts and that you make the most of your money.

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