There are very good reasons to have an effective savings plan in place, like paying for significant bills in the future such as college fees for your children. It can also provide peace of mind that there is an emergency “rainy day” fund in place should it be required.

The length of the savings plan is chosen by you, but many plans are medium to long term investments, with a recommended minimum term of 5 years.

It should also be noted, in the event that you need access to your funds before the end of the plan, surrender values especially in the early years can result in less than the amount that you have paid in.

This can include working out:

• What is the financial goal of your savings plan?

• Do I need to make changes to my own spending habits to meet these goals?

• How long should I save for to meet significant bills in the future?

• How much should I save on a regular basis?

• Can I cash in or stop the payments if my circumstances change?

• Do I have a separate “rainy day” fund?

It is important to work these things out at the beginning as the final value of your savings plan depends not only on how much you have saved but also the overall performance of the investment funds you buy into.