Monzo recently shared that a single customer has saved around £45,000 using its roundups feature, where each card transaction is rounded up to the nearest pound and the spare change is automatically transferred into a digital savings pot.
On average, Monzo customers save approximately £109 per year through roundups. Other banks offering similar roundup features include Chase, Starling, NatWest, Lloyds, RBS, Halifax, TSB, and Revolut.
These figures coincide with the approaching ISA deadline. Each tax year provides a £20,000 allowance for ISAs, which must be utilized as it cannot be carried over to the next year.
Considering the upcoming tax year end on April 5, it is essential to assess whether your savings are optimized. Various saving methods exist, with the right choice depending on individual circumstances and savings goals.
To help maximize savings, Joanne Phillips, General Manager (Wealth) at Monzo, emphasizes starting with simple steps like setting up roundups. She suggests utilizing features like Monzo’s salary sorter to efficiently allocate funds to different savings pots and emphasizes the importance of automating saving processes.
Joanne recommends prioritizing an emergency fund equivalent to three to six months’ worth of essential expenses. Additionally, she advises dividing savings into short-term, medium-term, and long-term goals, utilizing cash ISAs and stocks and shares ISAs strategically.
As of April 2027, the cash ISA limit for individuals under 65 will reduce to £12,000, while the overall ISA limit remains at £20,000. This adjustment aims to encourage more people to invest in stocks and shares.
Joanne highlights the importance of preparation and education before the changes take effect, emphasizing the collective effort between the government and financial industry to help individuals save and invest wisely.