You can open a savings account in the UK with just a £1 deposit, and there are hundreds of banks and savings companies that will happily invest it for you. If you are building up a more serious amount though, then there are some things that you should consider first.

While you can look around for the best place to put your money yourself, the smartest thing to do when you arrive in the UK is to speak to an Independent Financial Adviser (IFA), they can offer you plenty of independent professional advice about the many different products that are out there and which ones will suit your own individual circumstances best.

IFAs are regulated by the Financial Services Authority (FSA) so if you are going to deal with one make sure that they are r3egistered with the FSA first. You can start by looking in our “Find a…” section here.

The 3 main savings options that you have here the UK are ISAs, Savings Accounts and Premium Bonds.

Savings Accounts

All the major banks and building societies – the ones you will see as you walk down any high street in the UK - will provide savings accounts. These banks invest your money for you and will all provide different incentives and interest rates to attract new customers. The interest that your money earns is paid to you once a year, currently in 2008 this can be anywhere between 4 – 6%.

Premium Bonds

There is also the option of using your money to buy government savings bonds, known as Premium Bonds. These are completely secure, as your money is guaranteed by the government, but you will not earn interest on your money. Instead each month they hold lottery draws and hand out cash prizes of up to £1 million.

Many people prefer to sacrifice the slow accumulation of interest, which they would receive from a savings account, in favour of the dream of winning big on the premium bonds. What you decide to do with your money ultimately depends on what type of person you are.

Individual Savings Account - ISA

ISAs are savings accounts that allow each person to save up to £7,000 a year tax-free. You can either keep your savings as cash (similar to a savings account), in a life assurance policy – such as an endowment – or as an investment in the stock market.

The stock market is the most popular ISA investment and is suitable for medium to long term investors who want a higher tax free income and for their capital to grow. You can invest in any number of different shares or into a managed fund in any stock market in the world.

You are responsible for any ISA products that you buy and should therefore only be undertaken under the strictest of guidelines and advice. You can have a look for advice on ISAs in our "Find a..." section.

At present the interest rates are linked to the ups and downs of the UK stock market, commonly known as the FTSE 100. The British spend quite a lot of time monitoring the fluctuations of the stock-market; in fact they devote more pages to financial and business news in the UK than they do to sport.

But as you can see there is much to consider when deciding where to keep your savings, so it really makes sense to take some well-informed professional advice first.

By John Hillman

USEFUL WORDS

lump sum = single, large payment

endowment = combined insurance and savings plan that pays out after a fixed period

share portfolios = combination of stocks and shares of different kinds

life-savings = money saved over many years

golden handshake = large payment to someone on leaving a job

monthly outgoings = the amount of money you need to spend regularly (e.g. on monthly bills)

deposit = to put money into a bank account

making money = earning or gaining money

bank manager

GRAMMAR SPOT

Future in the Past
Use was/were going to to talk about intentions that didn’t happen:

I was going to save £100 every month, but I spent it on new clothes (I intended to save  £100, but I didn’t)

I was going to go and talk to the bank manager tomorrow, but I’m afraid I can’t now (I had a plan to see him tomorrow, but I won’t see him tomorrow)

Use was/were about to and was/were on the point of +ing to talk about intentions that you thought would happen very soon, but didn’t happen:

I was about to buy some shares when the stock market crashed (I was just going to buy some shares, but the market crashed so I didn’t)

We were on the point of leaving to go to the bank when we realised that it had just closed (we were just going to leave the house to go to the bank, but we realised it was closed)

Use was/were due to to talk about an arranged plan which didn’t happen:

He was due to deposit the money last Wednesday, but he had to pay for repairs to his car instead (he had planned to deposit the money, but he didn’t)