A finance expert is advising individuals in the UK to take a specific action before their January payday to potentially save £1,164. Rajan Lakhani, who heads the Money division at Plum, is recommending setting up an “autosave” rule on banking apps.
The “autosave” feature automatically moves money from your account to a savings or investment account at regular intervals, eliminating the need for manual transfers. Plum’s analysis reveals that on average, workers used auto-saving tools to save £97 per month in 2025.
By initiating this before January, individuals could accumulate £1,164 by the year’s end. If these savings are placed in a high-interest account with a rate exceeding 4%, the total could increase to approximately £1,210. Notable digital banks offering “autosave” functionalities include Monzo, Starling, Revolut, and Chase.
Lakhani stated, “Establishing a payday autosaver offers a hassle-free method to save monthly, aiding in maintaining consistency and achieving long-term financial objectives. By automating this process with each paycheck, individuals develop strong financial habits and create a safety net of savings for peace of mind.”
Basic-rate taxpayers can earn up to £1,000 in savings interest annually before incurring tax, known as the personal savings allowance. Beyond this threshold, a 20% tax is applicable for higher-rate taxpayers exceeding £500 in savings interest yearly, while additional rate taxpayers face a 45% tax on all savings interest. Analysis suggests that 2.64 million individuals will face tax on savings in the 2025/26 tax year.
Tax is not levied on savings held within an ISA account, where individuals can save up to £20,000 across various ISAs annually. However, from April 2027, the cash ISA limit for under-65s will be reduced to £12,000, while the overall ISA limit remains at £20,000. Individuals over 65 remain unaffected by this change and can continue saving up to £20,000 annually in a cash ISA.
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