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 recommending individuals to establish an “autosave” rule within their banking app.
Essentially, an “autosave” rule is a functionality in a banking app that automatically moves funds into a savings account or investment account at predetermined intervals.
This process eliminates the need for manual transfers to the savings account, making saving money more effortless.
An analysis conducted by Plum reveals that on average, workers 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 end of the year. If these funds are transferred to a high-interest savings account with a rate exceeding 4%, the savings could increase to approximately £1,210.
Popular digital banks offering “autosave” features include Monzo, Starling, Revolut, and Chase.
Rajan Lakhani emphasized the benefits of setting up a payday autosaver, stating that it offers a stress-free approach to saving regularly, aiding in maintaining consistency and achieving long-term financial objectives.
He added, “Taking this simple action before January payday can facilitate savings almost effortlessly. By automatically allocating a portion of your income, you are fostering positive financial habits and creating a financial safety net for peace of mind.
“These savings could be directed towards significant financial goals like a house deposit or used to cover unforeseen expenses.”
Basic-rate taxpayers can earn up to £1,000 in savings interest annually before becoming liable for tax, known as the personal savings allowance.
If the interest exceeds this threshold, a 20% tax is applied on any additional savings interest for higher-rate taxpayers earning more than £500 in savings interest per annum.
Additional rate taxpayers are subject to a 45% tax on all savings interest. Analysis from AJ Bell indicates that approximately 2.64 million individuals will face tax on savings in the 2025/26 tax year.
Income from savings held in an ISA account is not taxable. Individuals can currently save up to £20,000 across various ISA accounts annually, but starting from April 2027, the cash ISA limit for under-65s will be reduced to £12,000.
The overall ISA limit remains at £20,000, allowing, for instance, under-65s to save £12,000 in a cash ISA and £8,000 in a stocks and shares ISA.
Individuals over 65 are unaffected by the new cash ISA cap and can continue to save up to £20,000 annually in a cash ISA without changes.
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