Brits are being advised by a personal finance expert to take a specific action before their January payday that could result in unlocking up to £1,164 in savings.
The Head of Money at the money management app Plum, Rajan Lakhani, is promoting the setup of an “autosave” rule on banking apps.
Essentially, an “autosave” rule is a feature within a banking app that automatically moves money into a savings account or investment pot at predetermined intervals.
This approach eliminates the need for manually transferring funds into a savings account, streamlining the savings process.
An analysis conducted by Plum revealed that on average, individuals utilized auto-saving tools to save £97 per month in 2025.
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By starting in January, individuals could accumulate £1,164 in savings by the year’s end. If these funds are placed in a high-interest savings account with a rate exceeding 4%, the total savings could grow to around £1,210.
Several popular digital banks offering “autosave” features include Monzo, Starling, Revolut, and Chase.
Rajan Lakhani from Plum emphasized, “Establishing a payday autosaver can be a hassle-free method to save monthly, ensuring consistency and progress towards your financial objectives.
“This simple action, performed before January payday, facilitates nearly effortless savings accumulation.
“By automatically earmarking a portion of your income each pay period, you cultivate strong financial habits and build a safety net of savings for peace of mind.
“These funds could be allocated for long-term financial goals like a house deposit or to cover unforeseen expenses.”
Basic-rate taxpayers can earn up to £1,000 in savings interest annually before incurring tax – known as the personal savings allowance.
Any savings interest exceeding this amount incurs a 20% tax for higher-rate taxpayers and a 40% tax for taxpayers earning over £500 in savings interest per year.
Additional rate taxpayers are subject to a 45% tax on all savings interest. AJ Bell’s analysis predicts that 2.64 million individuals will face tax on savings in the 2025/26 tax year.
No tax is imposed on savings held within an ISA account. Currently, individuals can save up to £20,000 across various ISA accounts annually. However, starting April 2027, the cash ISA limit for under-65s will be reduced to £12,000.
Despite the change, there will be an overall £20,000 ISA limit – for instance, individuals under 65 could save £12,000 in a cash ISA and £8,000 in a stocks and shares ISA.
Individuals over 65 will not be affected by this adjustment and can continue saving up to £20,000 annually in a cash ISA as usual.
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