Monzo has recently disclosed that the highest amount saved by a single customer through its roundups feature is around £45,000. Roundups is a function that rounds up each card transaction to the nearest pound, with the spare change automatically moved into a digital savings pot.
On average, Monzo customers save approximately £109 per year through roundups. Similar roundup features are offered by banks like Chase, Starling, NatWest, Lloyds, RBS, Halifax, TSB, and Revolut.
These figures are released as the ISA deadline approaches. Each tax year provides a £20,000 allowance, which can be allocated across various ISAs. Failure to utilize this allowance results in its forfeiture as it cannot be carried over.
The tax year concludes on April 5, making it a good time to assess the efficiency of your savings. Various saving methods are available, and choosing the right account depends on individual circumstances and savings objectives.
Joanne Phillips, General Manager (Wealth) at Monzo, advises starting with creating an emergency fund equivalent to three to six months’ worth of bills and essentials. Following this, short to medium-term savings should be prioritized for expenses like holidays.
For longer-term savings, Joanne suggests considering cash ISAs and stocks and shares ISAs. She emphasizes the importance of building layers of savings gradually, beginning with an emergency fund in an instant access account.
From 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, promoting long-term financial growth.
Labour anticipates these changes to enhance investment opportunities. Joanne stresses the importance of educating the public about the alterations to facilitate informed financial decisions.
By aiding the government in educating the population, industry professionals can contribute to promoting better savings habits and long-term investment strategies.