Giving up bad habits for Lent could make you £75,000 richer over the course of your working life, according to new research.
Giving up cigarettes, alcohol, and treats such as chocolate and take-away coffee over Lent can add up to savings of £376 per person, according to insurance company AXA.
Putting out a cigarette habit would account for the lion's share of the saving, at £220 on average. While giving up booze saves £78, shop-bought fresh coffee £56 and chocolate bars £20.
Save the total every year over the course of your working life and you could end up with £18,000 in the bank.
However, invest the savings in a stocks
and shares Isa
every year and AXA research has found that upon retirement, you could have an extra saving of £74,612.25 - a cash boost of more than £56,000.
Andy Zanelli, head of retirement planning at AXA, said: "Small sacrifices, even during the relatively brief 46-day period of Lent, can mean major savings – and these savings can be maximised if invested in appropriate ways, such as through an Isa rather than simply storing savings in a current account
, especially at a time of low interest rates."
In the UK, stocks are fixed-interest securities such as corporate bonds and government gilts. In the US, stock is the most widely used term for shares; a diminutive of the term “common stock”.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.