Monzo recently disclosed that the highest amount saved by a single customer using its roundups feature is around £45,000. Roundups is a service that automatically transfers spare change from card transactions to a digital savings pot by rounding up each payment to the nearest pound.
On average, Monzo customers save approximately £109 per year through roundups. Similar roundup features are offered by other banks such as Chase, Starling, NatWest, Lloyds, RBS, Halifax, TSB, and Revolut.
As the ISA deadline approaches, customers are reminded that each tax year provides a £20,000 allowance that can be allocated to different types of ISAs. Failure to utilize this allowance results in its forfeiture as it cannot be carried over to the next year.
To optimize savings, Joanne Phillips, General Manager (Wealth) at Monzo, suggests starting with a simple roundup feature to kickstart saving habits. She emphasizes the importance of “paying yourself first” through tools like Monzo’s salary sorter to allocate funds for savings alongside essential expenses. Automated saving plans and intelligent saving strategies are also recommended to make saving effortless.
In addition to creating an emergency fund equivalent to three to six months’ worth of expenses, Joanne recommends organizing savings into short-term, medium-term, and long-term layers. For short-term needs, instant access accounts are ideal, while cash ISAs and stocks and shares ISAs cater to medium to long-term goals.
Looking ahead, changes to the cash ISA limit will reduce it to £12,000 for individuals under 65 starting in April 2027. However, the overall ISA limit remains at £20,000, allowing room for diversification by investing the remaining amount in other types of ISAs.
Labour anticipates that the reduced cash ISA limit will encourage more individuals to consider investing in stocks and shares. Joanne stresses the importance of educating the public about these upcoming changes to facilitate better financial planning and investment decisions.
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