How to save 10k in a year in the UK: 6 achievable steps

Why should you aim to save £10k in a year?

Saving £10,000 in a year may seem daunting, but with the right strategy, it’s achievable and potentially life-changing.

Whether you're building an emergency fund, planning to buy a home, or preparing for financial independence, reaching this milestone can give you peace of mind and greater opportunities.  

Successfully saving £10k in a year requires a balanced approach of cutting unnecessary expenses and boosting your income to accelerate your savings. 

We’ll explore practical tips for streamlining your budget and finding simple ways to earn extra cash, helping you reach your goal one step at a time.

What are the steps I should take to save £10k in a year?

If you want to know how to save £10k in a year, follow these steps:

1. Set a savings goal and track your progress

To save £10k in a year is a significant undertaking, and having a well-defined goal with measurable milestones will keep you motivated and on track.

Breaking down your £10,000 goal into smaller, manageable targets will make the journey less daunting and more achievable.

• Break it down: Divide your £10,000 annual goal into monthly targets (£833) and weekly targets (£192) to create measurable goals.
• Track your progress: Use well-known and trusted budgeting apps or a spreadsheet to track your income, expenses, and savings.
• Visualise your goal: Create a visual representation of your savings goals, such as a progress bar or a chart. You could also try visualising or planning what you want to achieve with your savings to help boost your motivation.

2. Create a realistic budget

The best way to start saving £10k in a year is by creating a personal budget.

Before you start allocating funds for your savings target, take these two steps.

1. Eliminate debt: High-interest debts, such as credit cards, can hinder your progress, so prioritise paying these off to free up more money for your savings.
2. Establish an emergency fund: Aim to save three to six months' worth of expenses, including rental or mortgage costs, groceries and any bills, in an easy-access account to cover unexpected costs.

Here's how to build a budget that aligns with your savings goal. First, analyse your bank statements and categorise expenses (e.g., rent, utilities, groceries, transport, entertainment) to get a clear picture of where your money is going.

Next, you must identify essential and non-essential spending. The 50/30/20 rule (allocating 50% on what you need, 30% on what you want and 20% on savings) or a similar framework can help you allocate your income effectively.

Lastly, treat your savings like a fixed expense. So, set up an automatic monthly transfer to your savings account to ensure consistent contributions towards your £10,000 goal.

3. Cut unnecessary expenses

One way to save £10k in a year is to reduce your expenses, which will likely require adjustments to your spending habits.

You can begin by evaluating your subscriptions. For example, do you need multiple streaming services, a subscription box, or a gym membership? Identify the services you don’t use or don’t get value out of, and cancel them.

Next, focus on meal planning and food waste. Plan your meals in advance, create shopping lists, and avoid impulse buys at the supermarket. You can also cook at home more often and make the most of leftovers to reduce food waste.

You may also be able to cut your utility bills with a few simple changes, such as switching the lights off and unplugging devices when they’re not in use. It’s also worth considering whether you should fix your energy bill as you may save money, but do your research first. 

Another area to consider is your commute. If you can walk, cycle, or use public transport instead of driving, it might be worth considering. Carpooling with colleagues or working from home a few days a week may be worthwhile investigating.

4. Increase your income

Boosting your income significantly accelerates your progress toward saving £10k in a year. There are numerous ways to do this, including offering freelance services based on your skills, such as writing, design, or programming. You could also do online tutoring or sell arts and crafts.

Another avenue to explore is renting out assets you own. If you have a spare room available, renting it out may be a good source of income. The UK’s Rent a Room scheme allows you to earn up to £7,500 tax-free from letting out furnished accommodation in your home, so you could make huge progress on your goal without incurring additional tax liabilities.

If you have a parking space in a sought-after area, you could rent it out, while equipment such as cameras, tools, or bicycles could also bring in additional rental income. It’s worth checking whether you have any tax liabilities when earning extra income so you can contact HMRC or seek expert advice if needed.

You may also be able to take advantage of any cashback or reward schemes, as this can potentially give you extra cash to save, but it’s worth doing your research first. 

5. Find the right savings account

Finding the right savings account is among the best ways to save £10k in a year, so look for high-interest options such as regular savings or individual savings accounts (ISAs). For example, with a 3.5% fixed interest rate, your monthly deposits could earn you over £175 in interest over the course of a year.

If you tend to spend impulsively, a savings account with limited withdrawals may help you stay on track. Once you’ve built up your savings and don’t need easy access, you could consider a fixed-term account, but you won’t be able to access your money for a set period. 

A minimum investment is typically required for a fixed-term account, and penalties may apply if you withdraw funds early. In return, these accounts generally offer higher interest rates than other savings accounts.

6. Review your progress

It’s a good idea to review your progress against your savings goal and make adjustments if your circumstances change. If you’re comfortable doing so, you could discuss your progress with trusted family and friends to help keep you on track.

Get expert financial advice

By combining smart money management with earning additional income, saving £10k in a year is achievable for many people. By reducing your expenses, having the right type of savings account, and having a disciplined approach, you can grow your savings in a transformative way. 

If you want to save £10k in a year or want expert advice to help you become more financially secure, let Unbiased match you with a professional financial adviser best suited to your needs.