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Saving for summer - without sacrificing your future

Maria Collinge

by , Freelance Editor

Harper’s Bazaar, The Telegraph, inews, Metro.

06 June 2025 /  

A yellow piggybank wearing goggles, surrounded by a rubber ring, on a beach.

Summer offers a prime opportunity for relaxation and enjoyment. While holidays can provide much-needed respite, they can also lead to extra spending. Last year, the average family of four faced a bill of almost £5,000 for a holiday abroad.

But these outings can often contribute to impulsive financial decisions. What you may not see in the moment is how these summer splurges impact your long-term financial wellbeing.

Striking a balance between short-term enjoyment and long-term financial security is key. Here’s how to enjoy a fulfilling summer while keeping your savings on track.

Set clear financial priorities

Ahead of your holiday, take some time to assess and categorise your finances. Prioritise essential costs such as rent and debt payments. While also setting aside funds for long-term savings and pension contributions. Try to stick to a budgeting rule, like the 50/30/20 framework which allocates:

  • 50% to necessities;
  • 30% to fun; and
  • 20% for savings, investments and retirement.

This way, you leave fun for summer activities without the financial strain that can loom after.

Create a holiday savings pot

Setting up a dedicated holiday fund could help you to avoid a financial headache later in the year. With a separate high-interest savings account or easy access ISA account, you have the opportunity to grow your money while keeping it accessible. You could also consider automating contributions to help you save consistently. This might make it easier to budget for activities and trips which can eat into your household budget.

Budgeting apps are also a great way to track progress and prevent overspending. When using them, try to differentiate between necessary savings and discretionary spending. In other words, those emergency savings should be kept aside for unforeseen situations. For example, if the car breaks down or the washing machine packs in.

By keeping these savings separate, you can see how much is available for holidays and activities without overspending.

Keep pension contributions on track

Summer might feel like a tempting time to deprioritise long-term savings like your pension. But doing so can have consequences. Keeping up with regular contributions means that retirement savings continue to grow in the background. This is thanks to potential investment growth and from the magic of compound interest.

There are other benefits to keeping up with pension contributions, like tax relief. This is one of the main benefits of saving into a pension and is essentially ‘free’ money from the government. Usually basic rate taxpayers get a 25% tax top up. This means HMRC adds £25 for every £100 you pay into your pension making it £125.

Higher and additional rate taxpayers can claim further tax relief through Self-Assessment. Try PensionBee’s Pension Tax Relief Calculator to understand how much you could get on your pension contributions.

If you’re employed and eligible to be enrolled into a workplace scheme, you’ll also benefit from employer contributions. With most workplace pensions, your contributions are taken directly from your salary. Your employer then adds a percentage on top. Under Auto-Enrolment rules:

  • the minimum employee contribution is 5% of your ‘qualifying earnings’; and
  • the minimum amount your employer has to pay is 3%.

However many employers offer matched pension contributions, so it’s worth reaching out to your HR team to see if they do and what the maximum limit is.

If you opt out or pause your contributions, you’ll also miss out on money from your employer. So before considering cutting back on contributions, try to identify other areas in your budget to adjust.

Making the most of investments and savings

Investing is a powerful strategy for achieving long-term financial stability. But it can be hard to balance investing while you’re paying for shorter term things like holidays. If you have cash savings, this money can be eroded by the rising costs of everyday goods and services - otherwise known as inflation. Whereas investments have the potential to grow over time and out pace the rate of inflation. So having a balance of the two is key.

Here’s why investing is a smart strategy:

  • The power of compound interest - regular investing takes advantage of compound interest. This is where you earn interest on the interest gained. Missing contributions could slow down this momentum.
  • Consistency builds wealth - trying to pause and restart investments based on seasonal spending can lead to missed growth opportunities. Staying invested, regardless of short-term priorities, keeps your investments on the right path.
  • Balances summer spending with future savings - while summer costs are temporary, financial stability lasts a lifetime. Keeping some money invested can help you enjoy the present without compromising your long-term finances.
  • Avoids emotional spending decisions - keeping investments automated to ensure summer spending doesn’t eat into your investments.

Building financial resilience beyond summer

Building mindful spending habits can help you balance short-term spending and long-term financial security. A well thought out budget and regular pension contributions can go a long way to protecting ‘future you’.

If seasonal costs squeeze your budget, consider what other adjustments you can make. For example, to your everyday expenses. As opposed to cutting back on your investments and pension contributions. That way, you can build your financial future while making room for that summer fun you deserve.

Maria is a Freelance Editor and Writer who previously worked as Global Editor at Female Invest. Her writing focuses on gender equality in finance. She’s also written for a variety of other publications including Harper’s Bazaar, The Telegraph, i news, Metro, Glamour and more.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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