FAQ

Having an emergency fund covering 3-6 months is a sensible and common approach to financial planning. Saving Tool Advanced does not have native support for defining your emergency fund. However, you can define a liability in a scenario that represents directing income to your emergency fund.

There is no native support for defining this, however, you can effectively apply the financial impact by defining a Liability (or Windfall) in the Expenditure tab. You will need to calculate the financial impact yourself, then apply this number using a Liability or Windfall to the relevant year.

Saving Tool Advanced allows you to do this. You can specify Windfalls for expected future income (e.g. inheritance, capital gains) and Liabilities for expected future expenses (e.g. home improvements). In general, it's recommended to specify all your regular income and outgoings using the You and Expenditure tabs, and only using Windfalls/Liabilities for one-off or unusual, larger income/expenses.

Yes - simply edit the Tax Residency of the scenario to control this, under Simulation Settings.

Both Defined Contribution and Defined Benefit pensions are supported by Saving Tool Advanced. Simply select the pension type you have in the Workplace Pension section.

You can apply a tapered pension allowance to a scenario by manually working out your annual contributions, then specifying this as an absolute amount (by selecting the £ icon in the input field). Alternatively, you can specify Pensionable Income in the Workplace Pension section. Saving Tool Advanced will not automatically calculate pension tapering.

Currently, you can only define one type of pension as your active (current) Workplace Pension. In this situation, it's generally recommended to specify the Defined Benefit pension part, since that is typically the significant portion of value. If you specify a Defined Benefit pension, you will have the option to set a cap/threshold or manually define Additional Voluntary Contributions (AVCs).

All the numbers you see in a scenario are in real terms, i.e. are in today's money. In other words, everything is adjusted for inflation.

An ISA is a tax-efficient savings and investment account available to UK residents. It allows individuals to save or invest money without paying tax on the interest, dividends, or capital gains earned within the account. There are different types of ISAs to cater to various saving and investment needs, including Cash ISAs, Stocks & Shares ISAs, Innovative Finance ISAs, and Lifetime ISAs.

A Stocks & Shares ISA is a type of Individual Savings Account that allows individuals to invest in a range of financial products such as stocks, bonds, and funds. The key advantage of a S&S ISA is the ability to grow investments free from UK capital gains and income tax, up to a certain limit each tax year. The Saving Tool Advanced Default Strategy makes heavy use of S&S ISAs.

A Cash ISA is a type of Individual Savings Account that offers a tax-free way to save money. Similar to a traditional savings account, it pays interest, but the interest earned is not subject to UK income tax. Cash ISAs are often seen as a safer, more stable investment compared to Stocks & Shares ISAs, though they typically offer lower returns. The Saving Tool Advanced Default Strategy does NOT use Cash ISAs.

A Lifetime ISA is designed to help individuals save for their first home or retirement. UK residents aged 18 to 39 can open a LISA and contribute up to a set limit each tax year, receiving a 25% bonus from the government on contributions. Funds can be withdrawn tax-free to purchase a first home or after the age of 60 for retirement purposes. Early withdrawal for other reasons is subject to a penalty. The Saving Tool Advanced Default Strategy does NOT use Lifetime ISAs.

A Defined Benefit (DB) Pension, sometimes known as a final salary pension, provides a guaranteed retirement income based on your salary and the number of years you have been a member of the scheme. The employer bears the investment risk and is responsible for ensuring there is enough money at retirement to pay the promised benefits.

A Defined Contribution (DC) Pension is a retirement savings plan where both the employee and employer contribute to an individual's pension pot, which is then invested. The amount available at retirement depends on the contributions made, investment returns, and any charges taken from the pension pot. Unlike DB Pensions, the individual bears the investment risk.

Financial Independence refers to the state of having sufficient personal wealth to cover one's expenses, without having to work.

Using the offline scenario will only store your scenario in your browser's storage, but you also have the option to import or export the scenario. This means you can download the scenario as a file that contains the scenario information, and later upload it. This allows you to be in control of your offline scenario and use different devices. Please note that you still need to visit Saving Tool Advanced to upload/open your offline scenario - it is just the scenario data that stays offline.

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