So here’s how to do that:
In the bottom bar of VSCode, you’ll see the label UTF-8. Click it. A
popup opens. Click Save with encoding. You can now pick a new
encoding for that file.
Alternatively, you can change the setting globally in Workspace/User settings using the setting "files.encoding": "utf8". If using the graphical settings page in VSCode, simply search for encoding. Do note however that this only applies to newly created files.