A delay of 10 years could half your savings pot at age 65

With Christmas out of the way for another year, there's time for people to turn their attention to saving again - not just for next Christmas, but also for the longer term.  Many don't want to lock their retirement fund away into a pension, but it is vital to save for retirement, as living off the basic state pension is not ideal.  If you want to have access to your money ‘just in case', saving into a cash account can be lucrative with a little bit of shopping around.

If you were to save £200 per month from the age of 25 to 65, assuming an average rate of 5% gross, you could save over £300,000 - a nice little pot for retirement.

However, if you start just 10 years later at age 35, you'd end up with around £167,000, almost cutting your nest egg in half, or you'd need to save £360 per month instead of just £200.

Gemma Stanbury, Head of Savings at Confused.com says "It's staggering how important the early years of saving are.  Compounded interest means that the earlier you start, the easier it is to build up a substantial savings pot for the future"

Even though the base rate is at a real low at the moment, providers are still offering some enticing rates.

Stanbury adds "Of course it could be difficult to find a savings account to offer 5% on an ongoing basis at the moment; so it's vital to shop around for the best rates available and use your cash ISA allowance each year, to keep as much as possible in out of the grasp of the tax man."