A finance expert advises individuals in the UK to take a specific action before their January salary to potentially save £1,164. Rajan Lakhani, the Head of Money at the financial management app Plum, recommends setting up an “autosave” rule on their banking app.
An “autosave” rule is a feature in banking apps that automatically transfers funds into a savings account or investment account at regular intervals, eliminating the need for manual transfers.
According to Plum’s analysis, the average worker utilized auto-saving tools to save £97 per month in 2025. By starting in January, individuals could have £1,164 saved by the year’s end. If these savings are deposited into a high-interest savings account with a rate exceeding 4%, the total could grow to around £1,210.
Popular digital banks such as Monzo, Starling, Revolut, and Chase offer “autosave” features. Lakhani stated that establishing a payday autosaver can facilitate stress-free monthly savings, aiding in consistent saving and long-term financial goal achievement.
Basic-rate taxpayers can earn up to £1,000 in savings interest annually before incurring tax. Higher-rate taxpayers begin paying 20% tax on savings interest exceeding £500 per year, while additional rate taxpayers face a 45% tax on all savings interest.
ISA accounts offer tax-free savings, with a current annual limit of £20,000 across various ISA accounts. However, from April 2027, the cash ISA limit for under-65s will be reduced to £12,000, maintaining the overall £20,000 ISA limit.
Individuals under-65 can save £12,000 in a cash ISA and £8,000 in a stocks and shares ISA. Over-65s are unaffected by the new cap and can continue saving up to £20,000 annually in a cash ISA.
