A financial expert in the UK is advising individuals to take a specific action before their January payday to potentially save up to £1,164. Rajan Lakhani, who heads the financial department at the money management app Plum, is advocating for setting up an “autosave” rule on banking apps. This rule automatically transfers funds into a savings account or investment pot at predetermined intervals, eliminating the need for manual transfers.
Based on Plum’s analysis, the average worker utilized auto-saving tools to save around £97 monthly in 2025. By starting this practice in January, individuals could have £1,164 saved by the end of the year. If these funds are placed in a high-interest savings account with a rate exceeding 4%, the savings could grow to approximately £1,210.
Popular digital banks offering the “autosave” feature include Monzo, Starling, Revolut, and Chase. Lakhani emphasized the benefits of setting up a payday autosaver, highlighting its contribution to consistent saving habits and the achievement of long-term financial objectives.
Basic-rate taxpayers can earn up to £1,000 in savings interest annually before incurring tax, known as the personal savings allowance. Higher-rate taxpayers pay 40% tax on savings interest exceeding £500 per year, while additional rate taxpayers face a 45% tax. Savings kept in an ISA account are tax-free, with a current annual saving limit of £20,000 across various ISA accounts.
From April 2027, the cash ISA limit for under-65s will be reduced to £12,000, maintaining the overall £20,000 ISA limit. Over-65s remain unaffected by this change, retaining the ability to save up to £20,000 annually into a cash ISA.