|>>|| No. 7036
You need to think of your goals. Your short term, medium term and long term goals.
Short term: Set up an emergency fund of at least three to six month's expenditure, holidays, etc.
Medium term: saving up for a house deposit, a new car, etc.
Long term: having enough capital to retire, pay off your mortgage early, etc.
The simplest thing to do is set up a regular saver around payday. That way you get used to the money going out of your account and used to it not being there.
Short term: you'll want this to be in cash. As interest rates are so low there's less impetus to shop around, but the most important thing is to get into the habit of saving.
Medium term: Most people will want this also in cash because they won't have the timeframe to cope with fluctuations in value and overcome any falls. For first time buyers there's all the Lifetime ISAs and Help to Buy ISAs where you won't get a much better deal than the government top up. As I already own a home I invest in Prudential's PruFunds for my medium term pot; they're not cheap (1.35% ongoing charges) but their smoothed returns mean volatility is minimised.
Long term: You're talking pensions and equities. Pensions are a wrapper to hold equities in, the same way a stocks and shares ISA is and the same way an investment bond is. They differ in their tax treatment. Join your workplace pension and find out the maximum matched employer contributions. For cheap equities Vanguard have recently launched their index tracker range for direct investing with them.