Are you saving too much for a rainy day?

Saving for a rainy day, (or house, holiday, car or college fund), is something that we are generally encouraged to do, but the problem with saving money is that it’s not as fun as spending it!

There is a school of thought which suggests that people who are saving as much as the financial services recommend could be saving more than they actually need to. Some experts suggest that most retirees will need at least 80% of their pre-retirement incomes in order to be able to live comfortably when they stop working, but others say that most pensioners will require less than this amount as their mortgage is likely to be paid off and kids will have left home.

However, there are many academics and economists who believe that most people aren't saving enough to support themselves upon retirement and there is concern that the state pension will decline as the population ages, meaning that there will be even more people depending on pensions paid for by even fewer earners.

It is also important to remember that every situation is different and how much or how little you save will depend upon many factors. For example: the time you have until retirement, your present income, your debts, how much you have already saved, the value of assets you own and the type of pension you have.

It seems the best plan of action would be to err on the side of caution. Rather than squander all of your money and save nothing for the future it would make sense to put away as much as you comfortably can. After all - if you find you do have more than you need in future you can always spend it then! But if you find that you're not left without enough money to live on in years to come, there is very little you can do to remedy the situation.

That said, if you're not already saving now, set up some form of savings account and try to put part of your monthly income into it. There are hundreds of different options on offer from banks and building societies: ISA accounts, online savings accounts, bonds, instant access savings - whatever your financial situation there is a savings account for you!

Adam Singleton is an online, freelance journalist and keen amateur photographer from Scotland. His interests include travelling and hiking.