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How much money will I save by quitting smoking?

John Fitzsimons
by Lovemoney Staff John Fitzsimons on 12 March 2014  |  Comments 10 comments

Today is No Smoking Day. How much money can you actually save by giving up smoking for good?

How much money will I save by quitting smoking?

Today is No Smoking Day, so if you're packing in the fags, let’s take a look at how much money you can save by quitting smoking.

The cost of your habit

I’m going to use the example of my father-in-law, who has been a smoker for decades and usually has a go at packing up the cigarettes each year.

He smokes Lambert & Butler, a range I am assured is fairly middle-of-the-road price-wise, which sets him back £7.64 for a packet of 20. On an average day he smokes 30 cigarettes. That means he is spending more than £80 a week just on fags.

The NHS Smokefree website has a calculator which you can use to see how much smoking is costing you. It also has all sorts of advice and information, including free Quit Kits and smartphone apps to help you kick the habit.

So simply packing up smoking would save my father-in-law in the region of £4,160 a year just through not buying cigarettes. Not a sum to be sniffed at.

But he could turn that extra cash into an even bigger sum.

Instant access savings

An obvious choice is to stick the money in an instant access savings account. That way he can earn a little interest, and still have the money within arm’s reach if he needs to spend it.

Currently, the top account my father-in-law could open (minimum deposit of just £500) comes from Britannia, paying a rate of just 1.50% before tax.

After a year (assuming the rate stays the same, which is far from guaranteed), assuming he puts away £346 a month, after tax he’d be left with a balance of £4,174.

Tax-free savings

What about an ISA? These accounts offer a tax-free return, and some offer instant access too. What’s more, the money he’d save from giving up smoking is not bigger than the current ISA limits (£5,760 in cash, £11,520 overall).

The top instant access ISA today that he could open with £1 comes from Stafford Railway Building Society, and pays 1.75%. Putting in £346 a month, at the end of the year he’d be sat on £4,185, an improvement of £11 on the instant access account.

Read Where to earn most interest on your cash for more on cash savings options.

Saving by spending

A savings account isn’t his only option though. Perhaps he has outstanding debt on a credit card, and paying this extra money towards his bill will help him clear that debt earlier, meaning he’ll be paying less in interest.

Or perhaps he could overpay on his mortgage. Many mortgages allow overpayments of up to 10% of the balance each year, and doing so means that you’ll slash the amount of interest you pay and pay the mortgage off earlier!

Or maybe he fancies a bit of a punt by investing that cash. He could stick it in an ISA that tracks the FTSE, for example, or head over to a site like FundingCircle or Seedrs and put his money behind a small business. If all goes to plan he’ll pocket a decent return on his money, and help the economy to boot.

Another huge boost

However, the money he'll save from not spending on cigarettes could be significantly boosted after 12 months by a drop in his life insurance premiums too.

Sainsbury's Bank has calculated that a 50-year-old non-smoker taking out £100,000 of cover via a 20-year policy would save £6,770 over the 20 years. For a 30-year-old the saving would be £571. That's big money and more that can be put away for the (healthier) future.

If you've given up for 12 months, without using any nicotine replacement products, it's time to have another look at your life insurance premiums.

The point is that with thousands of pounds a year extra in his pocket, there are all sorts of exciting options available to him. Hell, he can blow it all on a holiday if he wants. But the only way to get that money is to give up smoking, and stick to it.

If you are giving up smoking today, we wish you the very best of luck.

Get a free, no-obligation life insurance quote

This is a classic lovemoney article that has been updated

More money-saving tips:

How to save money on your food shopping

25 ways to cut your car insurance

How to find cheaper diesel and petrol

Watch free movies legally online

How to get free and cheap cinema tickets

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Comments (10)

  • electricblue
    Love rating 769
    electricblue said

    Do your bit to help young smokers quit. As someone who regularly compliments people if they are well presented (of whatever age) and tries to spread a little cheer, I have to say that I am rather less pleasant when it comes to seeing young girls smoking. If more people said to them 'You're cute - just a pity you stink', they might soon catch on that smoking isn't clever. Before anyone comments on picking easy targets, I was just as willing to confront Neanderthal type men when smoking was legal in restaurants and I was just finishing a meal when someone lit up. It was always bad manners and legality was a pitiful excuse.

    Report on 12 March 2014  |  Love thisLove  0 loves
  • FoodFish
    Love rating 0
    FoodFish said

    I don't think I qualify as an ex-smoker yet but today is my 44th day using an electronic cigarette and even with the cost of that I have so far saved £277.28. I have smoked for around 34 years so I hate to think how much it has cost me over the years! As if this isn't enough to convince me to stay off the cigarettes I am already noticing how much smokers stink. I have no intention of starting again and one day will give up the electronic version too but in my own time :)

    Report on 12 March 2014  |  Love thisLove  0 loves

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