A former City banker with a quarter-century of experience at two of the world's most prestigious investment banks has revealed a straightforward three-step method that she claims can save UK households tens of thousands of pounds.
The Three-Pot Framework for Financial Freedom
Charlotte Ransom, who spent 25 years working for giants JP Morgan and Goldman Sachs, has shared her personal blueprint for managing money. Speaking to The Times, the founder and CEO of Netwealth described the strategy as a "simple but transformational framework" that works regardless of income level.
"It's high time that more people split out their savings to make full use of their tax-free allowances and benefit from inflation-beating returns," Ransom advised. She calls her system the "three pot theory" and credits it with saving her a substantial sum over the years.
Breaking Down the Three Essential Pots
The first pot is what Ransom labels your 'liquid base'. This is typically your current account, where your salary lands and from which you cover all essential monthly outgoings such as your mortgage or rent, utility bills, and grocery shopping.
The second container is dubbed your 'sleep well core'. This is for longer-term, foundational savings and investments designed to provide security. It can include products like Individual Savings Accounts (ISAs) and pension contributions, which are crucial for future financial stability.
The third and final pot is named your 'passion play'. This is allocated for higher-risk, higher-upside investments that could deliver significant rewards. "It's exciting and rewarding but you can't bank on it for day-to-day living," Ransom cautioned, especially ahead of costly periods like Christmas.
Why This Blend is a "Total Game Changer"
Ransom, who admits she hadn't properly organised her own finances for years before adopting this method, says getting the balance right is critical. She emphasises that leaving too much money languishing in the first 'liquid base' pot means missing major opportunities for wealth building.
By consciously dividing funds according to this framework, individuals can not only maximise tax efficiencies and returns but also achieve greater peace of mind. Ransom believes this structured approach is a "total game changer" that paves the way for enhanced financial freedom and security in the future.
