What this guide is about
Saving = keeping money to use later instead of spending it now. You can keep saved money in a jar, a piggy bank, a bank account or a Junior ISA. If you keep it in a bank, the bank pays you a little extra each year — called interest. Small amounts saved regularly become surprisingly big amounts over time.
What is saving?
Saving is the simplest idea in money. You have some money. You don't spend it. You keep it for later.
That's it. Really.
Adults make it sound complicated by talking about ISAs and interest rates and investments. Those are different ways to save. The basic idea is the same: keep money to use later instead of spending it now.
People save for lots of reasons:
- To buy something bigger than they can afford in one week
- For emergencies they didn't plan for (the car breaks down, the boiler stops)
- For things in the future (a holiday, Christmas, a house, retirement)
- Just to feel safer — knowing they have something put aside
Where to keep saved money
You have a few options. Each has good and not-so-good bits.
| Where | Good | Not so good |
|---|---|---|
| A jar or money box at home | Easy. You see it growing. | Easy to spend by accident. No extra money added. |
| A grown-up "looks after" it | Safer than at home. | You can't see it. Easy to lose track. |
| A children's savings account at a bank | Safe. Earns a little extra each year (interest). | Need a grown-up to set up. Slightly slower to use. |
| A Junior ISA | Best interest. No tax on the extra you earn. Locked until 18 — can't spend by accident. | Locked until 18. Big plus and big minus at once. |
Most 8-9 year-olds use a jar at home and have a children's savings account or Junior ISA. Jar = short-term saving for things in the next few months. Bank or JISA = long-term saving for years away.
What is interest?
When you keep your money in a bank instead of at home, the bank pays you a little bit extra every year. This extra money is called interest.
The bank pays interest because they actually use your money — they lend it to other people (for buying houses, for example) and charge those people more interest than they pay you. The difference is how the bank makes money.
Interest is usually shown as a number with a percent sign:
- 4% means for every £100, you get £4 extra each year
- So £50 would earn £2 in a year (because 4% of 50 is 2)
- £20 would earn 80p
It doesn't sound like much. And it isn't, at the start. But it gets more interesting over time, because of something called compound interest.
Compound interest — the magic part
Here's where it gets cool.
Imagine you save £100. The bank pays you 4% interest in year 1, so you get £4. You now have £104.
In year 2, the bank pays 4% interest on the full £104, not just the original £100. So you get £4.16 of interest. You now have £108.16.
In year 3, the bank pays 4% on £108.16. You get £4.33. You now have £112.49.
The amount of interest goes up each year, even though you didn't add any more money. Why? Because you earn interest on the interest. This is what compound interest means.
| Year | Money in account (4% interest) |
|---|---|
| Start | £100 |
| 1 | £104 |
| 5 | £122 |
| 10 | £148 |
| 20 | £219 |
| 40 | £480 |
Look at year 40: nothing added after the first £100, and yet it's £480. That's the power of compound interest. The earlier you start saving, the more time compounding has to work.
Small amounts add up too
Forget £100. Most 8-9 year-olds save much smaller amounts — and that's totally fine. Look at this:
You save £1 a week. After 1 year: £52. After 10 years: £520 in a jar, but in a bank with 4% interest, more like £630.
You save £2 a week. After 1 year: £104. After 10 years: ~£1,260 with interest.
You save £5 a week. After 1 year: £260. After 10 years: ~£3,150 with interest.
That last one — £5 a week from age 8 to 18 — could be enough for your first car, a big holiday, or a really good gap-year start. From £5 a week. Just by being patient and starting young.
How to start today
- Get a jar or money box. Or use part of your wallet. Anywhere that's separate from your spending money.
- Pick an amount. Whatever feels possible — even 50p a week is a start.
- Set a regular day. Pocket money day, or every Sunday. Put the amount in.
- Don't take it out for impulse buys. If you want something, ask the spend pot first. Saving is only for the goal.
- Ask a grown-up about a bank account. Once you have £20-£50 saved, see if a parent will help you open a children's savings account.
For teachers: curriculum links
- England — PSHE Association KS2 L17 (managing money), L18 (financial decisions)
- England — Maths KS2 (money, percentages basics, multiplication)
- Wales — Curriculum for Wales Progression Step 2-3 (Maths & Numeracy, HWB)
- Scotland — Curriculum for Excellence MNU 2-09a, HWB 2-21a
- NI — PDMU KS2, Mathematics KS2
Full mapping in the curriculum map.
UK Tax Drag (2026). How saving really works. Ages 8–9 guide. Available at: https://kids.uktaxdrag.co.uk/ages-8-9-first-saving.html
Curriculum mapping: see UK Financial Education Curriculum Map (Version 1.0).