Valentine's Special: For better or for purse

With weddings now costing a small fortune, Professional Adviser asks the experts for advice on how to save for the big day.

Valentine’s Day will have seen plenty of people get down on one knee and pop the question. But, with the average wedding costing between £15,000 and £25,000, how can young couples today save for their big day? Industry experts reveal their top tips

Danny Cox , head of advice at Hargreaves Lansdown
“This is a subject close to my heart with my daughter getting married in September this year. The number-one priority is set a budget then stick to it. A wedding can soon become an endless money pit, so right from the outset I made it clear what my support was going to be.

Perhaps the best savings vehicle is an immediate access cash ISA. The interest is tax-free and monies can be withdrawn at any time to meet costs as they arise. Each can save up to £5,100 in cash ISA this tax year and £5,340 next tax year, more than enough to cover the average cost of a wedding.

Parents and grandparents can also take the opportunity to make inheritance tax efficient gifts. Wedding or civil partnership ceremony gifts are exempt from inheritance tax, subject to certain limits:

• parents can each give cash or gifts worth £5,000;
• grandparents and great grandparents can each give cash or gifts worth £2,500;
• anyone else can give cash or gifts worth £1,000.

You have to make the gift (or promise to make it) on or shortly before the date of the wedding or civil partnership ceremony.”

Jaskarn Pawar, chartered financial planner and director at Investor Profile
“The majority of newly engaged couples will most likely seek a date for the big day within 12-18 months. That means the large part of what they are going to spend probably should have already been saved up. But there are still many opportunities couples can take advantage of.

They shouldn’t underestimate the power of regular saving. Something huge like a wedding day to pay for will help focus the mind towards saving. The sort of things you spend money on now will seem like unnecessary luxuries in comparison to being able to spend that bit more on the wedding, or of course the honeymoon.

So being disciplined about saving will help enormously. Finding a high interest savings account can also make a difference. Although it is likely to be a relatively short time period, the more interest you can earn the better. Then there are some advanced inheritance tax planning strategies that the bride and groom-to-be could approach their parents or grandparents with. There are even special exemptions specifically for weddings, with parents able gift up to £5,000 to their children.

Once made, the value of these gifts will fall outside of their estate straight away and will therefore not be liable to inheritance tax. Gifts of this nature are extremely tax-efficient, and that’s the line I would approach them with! If it is suitable, grandparents could also be approached. They can also gift up to £2,500 for special occasions such as a wedding.”