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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

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Comments (10)

  • Mike10613
    Love rating 626
    Mike10613 said

    If he's smoking 30 a day at that price that's £10 a day or £70 a week. He would save around £3,500 a year by giving up. Unless he only smokes on weekdays!

    This is a terrible time of year to give up, especially with this damp weather. It's much better to give in in spring or summer. It can be a good idea to save the money for a reward(s).

    Report on 05 January 2013  |  Love thisLove  0 loves
  • jacquie1963
    Love rating 0
    jacquie1963 said

    I think it is a great idea to put the money you would have spent on smoking into something positive. My husband and I gave up smoking and put the money we spent on cigarettes instead into a mortgage on a small flat in Brighton. We told ourselves that now we had this mortgage we couldn't possibly afford smoking as well. That was 17 years ago. We paid £22,000 for the flat. It's now worth £122,000. We also receive £600 a month in rent as have paid off the mortgage.

    I know it's not possible to buy such cheap property now but there are plenty of ways to invest your fag money into profitable returns and also live longer to appreciate them.

    Report on 05 January 2013  |  Love thisLove  0 loves
  • tuttogallo
    Love rating 99
    tuttogallo said

    Smoking is just so injurious to health in so many different ways that it is in fact delayed action suicide, as well as costing a 30 a day man £3,500 per year of fully taxed income.

    Many smokers are in denial about how dangerous their habit is. Just because Aunty Annie smoked 100 a day and lived to be 95 does not prove that smoking is a safe activity (some people survided the Titanic, but was the Titanic a safe ship?).

    Almost all of the doctors in the original 1950s study are now dead and the figures are in. Smokers live, on average, 10 years less than the rest of us.

    So stop subsidising the rest of us by paying tobacco tax, do you body, those around you and finances a favour and GIVE IT UP.

    Report on 05 January 2013  |  Love thisLove  0 loves
  • yocoxy
    Love rating 152
    yocoxy said

    Let's face it, you've got to be pretty thick to smoke. It'll kill you, it makes you stink and it'll cost you a fortune.

    Mind you.. if you're unemployed, once you've spent your benefits on fags, you can go to the food handouts and claim poverty.

    Report on 13 March 2013  |  Love thisLove  0 loves
  • oliverw
    Love rating 8
    oliverw said

    Quote from http://www.surgeongeneral.gov/initiatives/tobacco/ : "January 11, 2014 marked the 50th anniversary of the first Surgeon General’s Report on Smoking and Health. The 1964 landmark report, released by Surgeon General Dr. Luther Terry, was the first federal government report linking smoking and ill health, including lung cancer and heart disease."

    That resulted in my mother giving up smoking, but my father continued, switching from cigarettes to one small cigar per day.

    As a result of that report and huge amounts of information since then, I regard anybody who has smoked any cigarette in the past (at least) 30 years as a fool. If they say they can't give up because they are addicted, the addiction was created by themselves when they started smoking. If they want to kill themselves, smoking is a very slow way to do that - in fact they are likely to die of something else before the smoking kills them.

    On the other hand, I sometimes think (cynically, of course) that smoking should be encouraged because the world is overpopulated. The problem with that is that some of the smokers will consume resources by being given medical treatment as a result of the smoking.

    Report on 12 March 2014  |  Love thisLove  0 loves
  • PlasticPup
    Love rating 9
    PlasticPup said

    I don't smoke so had no idea the cost of a packet was over £7! I remember when I was younger and my dad would send me to the shop to buy them for him, he vowed then he'd give up if they ever reached £1, sadly he never did.

    BTW, Mike how did you get to £10 per day? It's bugging me, no matter how much I look at it John's sums are right. £7.64 x 1.5 = £11.46 or to go the other way £7.64 divided by 20 and multiplied by 30 come to the same.

    Report on 12 March 2014  |  Love thisLove  0 loves
  • Simon Ward
    Love rating 8
    Simon Ward said

    PlasticPup, Mike's comment is referring to an older version of the article when cigarettes were (slightly) cheaper.

    Report on 12 March 2014  |  Love thisLove  0 loves
  • PlasticPup
    Love rating 9
    PlasticPup said

    Thanks Simon, I didn't notice the original dates. Just thought I was going mad ;-)

    Report on 12 March 2014  |  Love thisLove  0 loves
  • 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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