Bank account holders urged to observe easy ’65-20-15′ financial savings rule
Financial expert Nischa Shah shares a simple budgeting method on The Diary of a CEO podcast for managing your money
Saving is more important than ever amid a rising cost of living(Image: seksan Mongkhonkhamsao via Getty Images)
As the cost of living continues to rise, saving money is becoming an increasingly challenging task for many households. This makes penny-pinching more crucial than ever, and Brits are on the hunt for practical ways to save.
Financial expert Nischa Shah claims to have unveiled the most effective method yet, and it’s surprisingly straightforward. Shah is encouraging people to adopt a simple income-splitting rule to revitalise their budgeting and enhance long-term financial security. She refers to this money-saving trick as ’60-20-15′, a practical starting point for anyone with a bank account.
During an episode of The Diary of a CEO podcast with Steven Bartlett, Shah explained that the rule is based on your net income – the pay you take home after taxes and National Insurance contributions, not your gross salary.
She suggested that approximately 65 per cent of that net income should be allocated to your essential living costs. These include all the necessities like mortgage or rent, utilities, and groceries.
The expert then advised that 20 per cent should be set aside for what she terms “fun spending”, such as entertainment, events, and personal hobbies. “That’s for tickets, pilates classes, all that should makeup about 20 per cent of your take-home pay”, she says.
The remaining 15 per cent is designated for your future self, including savings, investments, and paying off any additional debts.
Shah stresses that this pot is to “plant seeds for tomorrow’s you” and is the most crucial method to build financial resilience and wealth over time.
She acknowledges it’s not always this straightforward: “If you’re living closer to pay cheque to pay cheque, those numbers might look slightly different, start with what you can” even if that means saving just 2 to 3 per cent initially.
“Great advice,” posted one fan in the replies, while a second added: “This habit building actually works and you can reap the rewards.”
A third said: “Loving the idea of planting seeds for a future you, love it!”
The necessity for disciplined saving is underscored by recent UK savings data. According to Aldermore Bank’s Savings Tracker, the UK savings ratio – the proportion of personal income saved – was approximately 8.5 per cent in 2024, with the average Brit stashing away roughly £2,274 over the past 12 months.
Finder’s 2026 data reveals the average UK adult has around £19,214 in savings, yet 39 per cent have merely £1,000 or less saved, and 16 per cent have no savings at all – a risky position if unexpected expenses crop up.
NatWest’s Savings Index indicates the average monthly savings are about £226, suggesting many Britons are setting money aside but still fall short of Shah’s widely recommended financial targets.
