Tips For Making Savings In 2025

With economic pressure continuing to affect households across the UK, finding effective ways to lower expenses and build financial security has become very important.

Optimise your transportation costs

Transportation is usually one of the largest household expenses, making it a prime target for significant savings. If your household maintains multiple vehicles, you can consider downsizing your fleet if it makes financial sense. Many families discover that transitioning from three to two cars—or even two to one—can lower overall expenses. So, when evaluating this option, don’t just consider the immediate savings on fuel. According to The Car Expert, the average car costs about £3,000 to run when accounting for insurance, tax, maintenance, and depreciation. If you decide to sell your car, the resulting capital can be redirected toward debt reduction, emergency savings, or investments. The timing for such decisions appears favourable, as the UK’s used car market remains solid, with sales potentially reaching 7.7 million in 2025.

Embrace energy efficiency at home

Home energy cost is another significant opportunity for savings. The Great British Insulation Scheme continues to offer substantial funding for home insulation improvements, with eligible households potentially saving hundreds of pounds annually on heating bills. Besides insulation, simple behavioural changes can yield impressive results. A study by University College London states that lowering your thermostat by just 1°C can lower your heating bill by £130.

Invest wisely for future security

While cutting expenses gives you immediate relief, strategic investing is still important for long-term financial health. Review your pension arrangements regularly, especially if you’ve accumulated multiple pension pots from different employers. Consolidation can improve oversight and potentially reduce administrative fees. You can also consider diversifying investments across various asset classes based on your risk tolerance and time horizon. Even modest regular contributions to tax-advantaged accounts like ISAs can accumulate substantially over time through compound growth.

Adopt frugal living practices

Implementing mindful spending habits in daily life often has surprising cumulative savings. Meal planning and preparation can lower food expenditure quite a bit. Households that regularly prepare meals at home usually spend much less on food than those who frequently dine out or order takeaway. Subscription services are another area ripe for optimisation. The average UK household spends over £700 per year on subscriptions, according to research, and this number continues to escalate. Many of us use less than half of these subscriptions regularly, so conducting a quarterly subscription audit can identify unnecessary recurring expenses.

When you systematically use these strategies, you can achieve meaningful financial improvements throughout the year, building greater resilience against economic uncertainty while progressing toward long-term financial goals.