My Financial Life – Maximising your 30s

AJ Bell Money Matters is designed to help every woman feel good investing, whatever their age. We’ve put together a series of articles which break down some of the financial pressures you’re likely to face as you step into the different decades of your life and provide you with tools to help you navigate that journey.

This article focusses in on your 30s, and thinking back, for me, those years came with some seriously massive demands on my finances. It was the decade I bought my first house; I splashed out on a white wedding in the Scottish Highlands, and I took time out of the workplace when I had my two children.

It’s fair to say I wasn’t prepared for the impact all those changes would have on my finances. I hadn’t talked to my partner about how we would manage things like childcare costs, and I hadn’t considered how taking maternity leave would impact my pension.

Much of that planning would really have been better done in my 20s – so if that’s still you look out for the article which drills down into that decade.

But if you are in your 30s right now, there are some simple things to think about to help you better deal with what you’re likely to be facing right now as well as setting you up for later life.

Firstly, it’s really important to remember that no two financial lives are the same; we’re all individuals and we all make different choices, but some of the same themes are probably going to come up.

It is likely you are settled in your career and are hopefully earning considerably more than you did in your 20s but those additional cost pressures can be overwhelming so, as ever it makes sense to take a bit of time to make a plan.

Work out when you want things to happen because different time frames will require different steps. If trying to get on the housing ladder is your priority then you’re probably squirreling every spare penny away for a deposit. I know how lucky I was to have been part of a generation when house prices were still reasonable and 100% mortgages commonplace.

Recent figures from the Institute for Fiscal Studies found that the number of 25–34-year-olds still living with their parents had risen by over a third in two decades and that nearly a fifth of people in this age range now were back at home last year (2024). Many of that 18% find living back home is the only way they can even begin to save up enough money for a deposit on a home of their own and there has been a lot of criticism about one of the tools created to help people save for their first home.

The Lifetime ISA replaced the Help to Buy ISA and on paper it’s a tax efficient way to save up to £4,000 a year and get a 25% government bonus on your savings – that’s up to £1,000 of free cash every year.

But you probably won’t be surprised that there are a couple of important caveats.

You must use the cash to buy your first home and one that you are going to live in, and that home can’t cost more than £450,000, which might sound like a lot but there are a growing number of areas where that won’t be enough, and even if you’re going in with your partner that limit stays the same.

If you don’t meet the criteria and need to pull out your cash, you’ll be charged 25% of the whole pot, which will add up to the government cash plus a chunk of yours as well. Of course, you can leave it in there until you turn 60 and not get penalised, but if you’re saving for a house, it’s a pretty sure bet you need that cash to make that dream a reality.

AJ Bell is actively lobbying the government to get them to reduce the exit fee to just the government bonus and to raise the house price limit which has remained the same since LISAs were introduced back in 2017.

If you’re thinking of a wedding in a year’s time, you’ll probably want to keep your savings in cash. Just make sure you’re hunting out the best interest rate you can and don’t get caught out by the taxman.

Remember you will pay tax on interest earned on your cash savings that exceeds your Personal Savings Allowance which currently stands at £1,000 for basic rate taxpayers and £500 for higher rate earners. When you think about how much a wedding costs you might have £10,000 or more put by and if you’ve got rates of around 5% it could be enough to potentially trigger a tax liability if you’re in that high-rate bracket. And with the average wedding last year costing £20,775 according to wedding planning app Bridebook, it’s easy to understand how some people can get caught out. If you are saving over a number of years think about using a tax wrapper like an ISA and remember a stocks and shares ISA offers the potential for growth over time.

Marriage isn’t for everyone and in fact, the 2021 census found that the number of UK adults married or in a civil partnership had fallen below 50%.

Similarly, not every woman will choose to have children and our recent research showed that finances are playing a huge part in that decision with a fifth of people saying they’re planning not to have children because of the financial implications.

But if you are hoping to have children you can take a couple of pro-active steps you can take to get your finances ready for the changes heading your way.

Try to pay off or at least down any debt like credit cards, store cards or buy now pay later debt and if you can give yourself an emergency fund – enough money to cover at least three months of expenses so you’ve got a cushion to fall back on.

Research your company’s maternity policy and ask your partner to do the same. Discuss how much time you can realistically take off work and if your partner can/wants to share the time and figure out if returning part-time at least for a period of time, might be the right option for you.

Our research found that only 55% of women went back to work full time after they had their first child compared to 92% of men and that number fell significantly with subsequent children.

So, whilst retirement is probably one of the last things you’re thinking about in your 30s, if you can pump up your pension payments by even a couple of percent before the patter of tiny feet run through your world, you’ll be doing your future-self a massive favour.

With time on your side, it’s a brilliant opportunity to take a bit more risk and invest for growth because you have time to recover from any potential losses.

And don’t forget to enjoy every moment of the journey because with all the changes heading your way this is a decade that will pass in the blink of an eye.

My Financial Life - 30s checklist

1. Build an emergency fund - this is a financial buffer that can help you deal with all the changes coming your way.
2. Prioritise - it’s easy to get overwhelmed by the number of financial pressures but making a list can help you see things more clearly.
3. Invest for the future - whether it’s buying a house in a few years or your retirement way off in the future, be savvy and use pensions, ISAs and LISAs but check they work for you first.
4. Be kind to yourself - your 30s come with a lot of pressure to follow the herd but do things when they work for you.
5. Be prepared and don’t do it alone – if you’ve got a partner make sure your conversations about the future include who will pay for what.