Build a ‘financial buffer’ to ‘safeguard’ against costs, savers told

A key money tip is that Britons should put aside some cash for a rainy day, as it could provide protection when they need it. New research by Fidelity International has shown three in 10 Britons are now doing so to protect themselves from the rising cost of living.People are looking at how they can bolster their savings as individuals lean on the cash they have put aside more than ever before. But how can Britons build a savings buffer and strengthen their finances this winter? Emma-Lou Montgomery, associate director for personal investing at Fidelity International, shared key tips exclusively with Express.co.uk.Firstly, Ms Montgomery urged Britons to create a winter budget, and the first step could be reviewing one’s shopping habits.READ MORE: State pensioners set to miss out on another bumper triple lock boost Money saving tips: How you could build a ‘financial buffer’ this winter and into 2023 – top tips (Image: Getty)She explained: ‘As the seasons change so will your household budget, but with the cost-of-living soaring careful planning will likely be required. ‘Remember, one of the things you can control is where you shop and what you buy. ‘More people are naturally finding – whether through necessity or choice – that they are more engaged with their spending habits. ‘So, while you may have a clear idea on exactly what your weekly budget is, now is the time to factor in the festive season and review each outgoing with the next three months in mind. DON’T MISSThousands of Britons face ‘quiet scandal’ as overpaid tax in millions [ANALYSIS]State pension payment date changes will take place next month [LATEST]’Good news’ for pensioners as Bank of England hikes interest rates [UPDATE] Money saving: Interest rates have risen consecutively recently (Image: EXPRESS)For those who invest, it is important to stay so for the long-run, Ms Montgomery said, as panicking could make the situation worse.She added: ‘During this turbulent time, it’s understandable if you have the urge to pull back on your regular investments – however, it’s important to keep a cool head, avoid knee-jerk reactions, and focus on your long-term goals. ‘Adopting a more defensive strategy may support you in achieving the best outcome in the long term. A well-balanced portfolio in uncertain times is also important as this will ensure you’re well diversified and can protect your investments against social, political, and economic changes.’Finally, it is important for people to be smart about their retirement plans, particularly given the current climate.Those who have retirement in their path within the next few years will need to decide exactly how they plan to take retirement income.Ms Montgomery suggests retirement plans should allow a person to cover the cost of essential spending with income that can rise as prices do.While drawdown continues to be a popular option following pension freedom rules, some may wish to consider an annuity for more stability.The expert concluded: ‘You can get an annuity that pays an income linked to inflation – but that comes at a cost. Or it might simply mean leaving your pension pot invested for longer.’