A financial expert is advising individuals in the UK to take a specific action before their January payday to potentially save up to £1,164. Rajan Lakhani, who leads the Money department at Plum, is recommending that people utilize the “autosave” feature on their banking apps.
The “autosave” function automatically moves funds from your account into a savings or investment account at regular intervals, eliminating the need for manual transfers. Analysis by Plum reveals that on average, individuals used auto-saving tools to save £97 per month in 2025.
By starting this strategy in January, one could accumulate £1,164 by the end of the year. If these savings were placed in a high-interest account with a rate exceeding 4%, the total could grow to approximately £1,210. Popular digital banks offering “autosave” features include Monzo, Starling, Revolut, and Chase.
Lakhani emphasized the benefits of setting up a payday autosaver, highlighting its potential to aid in consistent saving habits and achieving long-term financial objectives. Building a savings cushion can offer peace of mind and financial security, whether for future investments or unexpected expenses.
Basic-rate taxpayers can earn up to £1,000 in savings interest annually before incurring tax implications under the personal savings allowance scheme. Higher-rate taxpayers face a 20% tax on savings interest exceeding £500 per year, while additional rate taxpayers are subject to a 45% tax on all savings interest.
Savings within an ISA account are tax-free, with the current annual limit set at £20,000 across various ISA types. However, starting 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.
The upcoming changes do not affect over-65s, who can still save up to £20,000 annually into a cash ISA. It’s essential to understand tax implications and consider tax-efficient saving options like ISAs to maximize savings growth.