Session 4: To Save Or Not To Save
Start thinking: Which would you prefer?
£50 right now. In your hand today. No waiting.
£520 paid in one year. Guaranteed, but you must wait.
Why is saving so hard?
Why do people choose immediate rewards?
Discuss for 1 minute.
Why is saving
so difficult?
Why do people spend money they know they should save?
Saving means delaying spending today,
to achieve something bigger tomorrow.
It is hard because good savers need willpower and
a system to save consistently over time.
Today’s Big Question:
Why is it important to save a little now?
PATHWAY 1
To Save Or Not To Save
10 mins
PATHWAY 2
The Savings Menu
10 mins
Why is it important to save a little now?
Finished? Have a go at the Savings Guru minigame.
The Rule of 72
Small differences in rate have an enormous differences in outcome.
72 ÷ interest rate = number of years to double your money
1%
doubles in
72 years
a typical easy-access rate
4%
doubles in
18 years
a good savings rate
6%
doubles in
12 years
a strong long-term rate
72 ÷ interest rate = number of years to double your money
e.g. Mara puts £500 into an account paying 6%.
72 ÷ 6 = 12 years
After 12 years she has £1000. After 24 years she has £2000.
The Rule of 72
How long to double?
1. 8% - a good investment year
2. 3% - a decent savings account
3. 12% - very rare, high risk
4. 1% - a typical current account
1. 9 years
2. 24 years
3. 6 years
4. 72 years
Account | Rate | Access | Limits |
Easy Access Saver | 3% variable | Anytime, no penalty | £1 min, no max |
Regular Saver | 6% fixed, 12 months | Must pay in monthly. Withdraw early, lose the bonus rate | £25–£300/month |
Fixed-Rate Bond | 4.5% fixed, 1–3 years | Locked. No withdrawals | £500 min lump sum |
Cash ISA | 4% tax-free | Easy-access version allows withdrawals | £20,000/year |
Lifetime ISA | 4% tax-free + 25% gov bonus | First home or age 60 only. Otherwise penalty. Ages 18–39 | £4,000/year |
Financial Advisor Challenge
In groups, you will match every customer to the most suitable savings account and answer a bonus question about interest.
Maya, 24
Wants £200 for a new bike. Can save £25 a month, needs it in 8 months. She might change her mind about cycling, so wants to be able to get the cash back any time.
Work out: Which account would you recommend? Why?
Bonus: How much interest does it earn on £200 in a year?
Account | Rate | Access | Limits |
Easy Access Saver | 3% variable | Anytime, no penalty | £1 min, no max |
Regular Saver | 6% fixed, 12 months | Must pay in monthly. Withdraw early, lose the bonus rate | £25–£300/month |
Fixed-Rate Bond | 4.5% fixed, 1–3 years | Locked. No withdrawals | £500 min lump sum |
Cash ISA | 4% tax-free | Easy-access version allows withdrawals | £20,000/year |
Lifetime ISA | 4% tax-free + 25% gov bonus | First home or age 60 only. Otherwise penalty. Ages 18–39 | £4,000/year |
Sophie, 35
Already has £4,000 saved. Wants to start earning interest without losing any of it to tax. Wants to be able to access the money in an emergency.
Work out: Which account would you recommend? Why?
Bonus: How much tax-free interest does her £4,000 earn in a year?
Account | Rate | Access | Limits |
Easy Access Saver | 3% variable | Anytime, no penalty | £1 min, no max |
Regular Saver | 6% fixed, 12 months | Must pay in monthly. Withdraw early, lose the bonus rate | £25–£300/month |
Fixed-Rate Bond | 4.5% fixed, 1–3 years | Locked. No withdrawals | £500 min lump sum |
Cash ISA | 4% tax-free | Easy-access version allows withdrawals | £20,000/year |
Lifetime ISA | 4% tax-free + 25% gov bonus | First home or age 60 only. Otherwise penalty. Ages 18–39 | £4,000/year |
Adam, 45
Has a one-off £2,000 to put away. He's heard about an account where "the government tops up what you save" and wants that one. But he also wants easy access to his money.
Work out: Which account would you recommend? Why?
Bonus: How much interest does he earn on £2,000 in a year?
Account | Rate | Access | Limits |
Easy Access Saver | 3% variable | Anytime, no penalty | £1 min, no max |
Regular Saver | 6% fixed, 12 months | Must pay in monthly. Withdraw early, lose the bonus rate | £25–£300/month |
Fixed-Rate Bond | 4.5% fixed, 1–3 years | Locked. No withdrawals | £500 min lump sum |
Cash ISA | 4% tax-free | Easy-access version allows withdrawals | £20,000/year |
Lifetime ISA | 4% tax-free + 25% gov bonus | First home or age 60 only. Otherwise penalty. Ages 18–39 | £4,000/year |
Chloe, 33
Saving £150 a month, for either a first home or an early retirement. Wants the government bonus and won't touch the money for years.
Work out: Which account would you recommend? Why?
Bonus: How much government bonus money gets added to her savings after a year?
Account | Rate | Access | Limits |
Easy Access Saver | 3% variable | Anytime, no penalty | £1 min, no max |
Regular Saver | 6% fixed, 12 months | Must pay in monthly. Withdraw early, lose the bonus rate | £25–£300/month |
Fixed-Rate Bond | 4.5% fixed, 1–3 years | Locked. No withdrawals | £500 min lump sum |
Cash ISA | 4% tax-free | Easy-access version allows withdrawals | £20,000/year |
Lifetime ISA | 4% tax-free + 25% gov bonus | First home or age 60 only. Otherwise penalty. Ages 18–39 | £4,000/year |
WE HAVE COVERED:
Learner Journal
Part 1: Three Things I Learnt Today
Open your Learner Journal. Write down three things you learnt. These can be facts, ideas, or things that surprised you.
What is one automated system or
habit you could set up this week to start saving for your future?
Write your response in your Learner Journal, then finish sections 3-5.
Learner Journal
Part 2: Reflective Question
“Do not save what is left after spending, but spend what is left after saving.” Warren Buffett, investor (1980s)
Lock-In Quote
Good savers don't rely on willpower or leftover cash at the end of the month - they build systems that automate their savings first.
Extension Activities
Extension 1
Extension 2
The Kingdom That Forgot To Save
The Great Acorn Heist