Side hustle secrets revealed
69% of savvy Brits are earning extra cash – here’s how...
It can feel like there’s so much going on in life, and so much to pay out for. A much-needed treat, a milestone birthday, a special holiday… Christmas!
For some the 9-5 is enough, but 69%1 of Brits are turning to a side hustle. Here’s why…
A recent survey by Portafina revealed 32% of Brits who undertake extra work on top of their normal job, do so to bolster their savings. 11% of Brits even pop the money made straight into their retirement fund.
The top 5 reasons Brits take up a side hustle are:
- To save for Christmas (34%)
- To add money to general savings (32%)
- To save for a holiday (31%)
- To treat themselves (26%)
- To save for birthdays (18%)
You’ve done all the hard work earning the money, why not make sure the money continues the hard work for you.
3 ways to make your savings work hard for you
It’s helpful to think about your savings in three ways: everyday savings; an emergency fund, and your longer-term future. Jamie Smith-Thompson of Portafina reveals how you can make these savings work for you.
“Whether you are saving for a new car, a holiday, or have another short-term goal, an easy-access bank account will come in handy. You’ll need to check how much you need to open the account, how much you can add to it, and how many withdrawals you can make.
“Your bank may also offer a standard savings account. Whilst the interest rates could be slightly higher than an easy-access account, you’ll likely be faced with less flexibility with how you take your cash out.”
“An expensive car repair or unexpected household bill is never pleasant. Setting up an emergency fund will give you peace of mind that should you have a nasty surprise, you’ve got the cash to cover all, or a large part, of the expense. It also means in most cases you won’t need to dip into your day-to-day living costs, and any other savings will largely be kept intact.
“As a rule of thumb, you should aim for an emergency fund that’s big enough to cover all your living expenses for between three and six months.
“If you choose an account that you can tap into at any time, you’ll need to be strict with yourself that this pot is for emergencies only.”
Saving for the future
“Whilst it’s exciting to save for short-term events like Christmas or a holiday, saving for your future can feel less rewarding because you have nothing immediately to show for all the money you are putting away. Don’t let your brain fool you! Saving for the future is hugely important and you will reap the rewards. That’s where ISAs and pensions come in.
“If you’re looking for a short-to-medium term slush fund and don’t want to take any risks with your money, a cash ISA could be for you. You can save up to £20,000 tax free each year, but the returns aren’t always that much better than regular savings accounts. You’ll also need to weigh up whether you’d rather a slightly better interest rate or the ability to instantly access your cash.
“Then there are stocks and shares ISAs which are all about investing. These can provide better growth than a cash ISA, but as a rule of thumb you should look to keep the money invested for a minimum of 5 years and you will be managing the investment decisions yourself.
“If you’re looking further into the future and thinking about your retirement, a pension is the most powerful savings tool most of us will ever have. Saving little and often over many years can make a massive difference to your quality of life.
“Let’s say, from the age of 25 you put £20 in a jar each month. By the time you reach 65 you’ll have £9,600.
“Now, let’s say you save that £20 in a pension that grows, on average, at 6% per year. By 65 you’ll have over £38,000. That’s the power of a pension. And it’s why it’s so important to regularly check your pension to make sure it’s tailored to you every step of the way.”
Top 10 most profitable side hustles revealed
If you’re like 1 in 10 Brits and are thinking about how you can earn a little bit extra, here are the top 10 most profitable2 side hustles for you to consider:
1. Renting out home/room for holiday rentals e.g. Airbnb - £2,460.31
2. Taxi driving e.g. Uber - £2,037.56
3. Tutoring/coaching - £2,034.60
4. Web design/development - £2,029.77
5. Freelance writing - £1,959.14
6. Photography – £1,882.43
7. Cleaning – £1,872.04
8. Alterations - £1,827.21
9. Making and selling home baked goods - £1,784.75
10. Childcare - £1,611.88
How much is enough?
There’s no easy way of knowing how much money you are going to need to lead the type of life in retirement that you want. There really is no time like the present to plan for the future.
How much you need to save for retirement very much depends on who you are and how you want to live your life. One thing we can be sure of is the longer you save into your pension, and the more you can put into your pot, the better.
Check out our handy calculator and see if you’re sitting as comfortably for your retirement as you think you are.
PR and Content Executive
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1 2,000 UK adults in employment or retired. Surveyed by TLF
2 Respondents gave an estimate of the total money they have made from their side hustle overall. An average amount has been taken per side hustle.
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