The Lazy SaverSinking funds (UK): the lazy fix for annual bills
Updated 14 October 2026 · 4-minute read · UK
A sinking fund is money you set aside each payday for a cost you KNOW is coming. Car insurance renewal, MOT, Christmas, birthdays: not emergencies, just lumpy.
UK costs people forget
MOT and servicing, car tax, car and home insurance renewals, the TV licence (if you pay annually), boiler service, Christmas and birthdays, school uniforms, pet insurance or vet bills, holidays, passport renewals.
The formula
Target ÷ paydays left = what to put aside each payday. Say car insurance is £540 in 9 months: about £60 a payday. Add up all your pots for one "per payday" number.
A 6-page printable with a payday bill calendar, subscription hit-list and a 30-day challenge. Free by email.
Get the free plannerWhere to keep them
Most UK banking apps let you create named savings pots. One pot per fund keeps it clear, and many people keep them in an easy-access savings account.
Combine with renewals
When a renewal comes up, compare quotes before auto-renewing. A cheaper renewal means a smaller sinking fund next year.
Our 20-second UK calculator adds up takeaways, unused subscriptions and not switching. The yearly total is usually a shock.
Try the calculator →UK Budget Tracker (£9.99): an automatic Excel/Google Sheets budget built on UK paydays. Built for UK paydays and the 2026/27 tax year. Instant download.
See it in the shop →FAQ
What is the difference between a sinking fund and an emergency fund?
A sinking fund is for known, planned costs (like the MOT). An emergency fund is for the unexpected (like a broken boiler).
How many sinking funds should I have?
Start with your three biggest annual costs. Add more once those are on autopilot.
Should sinking funds go in a savings account?
Keeping them separate from your current account helps you avoid spending them. An easy-access account or named pots are popular choices.