How cash ISAs can help you save for your sunny days
March 2025
4 minute read
How cash ISAs can help you save for your sunny days
March 2025
4 minute read
Brighter, warmer days are on the way. And if you’re anything like us, you’ll already be dreaming about those unforgettable moments ahead, like far-away holidays, family weddings or once-in-a-lifetime experiences.
With the joys of summer just around the corner and the new tax-year fast approaching, now's the perfect time to start thinking about how ISAs can help you save for your sunny days.
ISAs have really grown in popularity since they launched 25 years ago. This is probably because they offer a great, tax-free way to save and make the most of your money. Each tax year, you can save up to £20,000* into ISAs. This is called your annual allowance and is set by the government (and therefore could change). The tax year runs from 6 April and ends 12 months later on 5 April.
The end of every tax year presents a fantastic opportunity to review your savings and make sure your money is working hard for the sunny days ahead.
Keep more of your savings
According to research published last year by the Resolution Foundation, more than 11 million Brits don’t have ‘rainy’ day savings of £1,0001. One of the main reasons for this could be that a lot of people simply don’t know where to start! It might also surprise you to learn that there’s an estimated £1 trillion in savings in the UK currently sitting in accounts generating little or no interest2.
Cash ISAs are considered to be a safer option for your savings because:
- There's no exposure to stock market volatility or other risky investments
- As per the Financial Services Compensation Scheme, savings up to £85,000 per person per UK regulated bank or building society are safe in a cash ISA**
- You can choose the perfect cash ISA for you, depending on the level of access you’d like.
So, whether you're saving for a holiday or a new car, you can rest assured that your savings are safe and secure.
Grow your savings faster
Your annual ISA allowance of £20,000 resets at the start of every new tax year on 6 April. So, if you save your full £20,000 before the end of the current tax year (which ends on 5 April 2025), you could then add up to a further £20,000 when you get your new allowance from 6 April 2025.
In 2025, this means that by using your full ISA allowance both before and after the new tax year, you could enjoy the benefits of tax-free interest on up to £40,000 in one calendar year. By putting money into an ISA every year, the cumulative benefit can have a significant impact on the growth of your savings.
Your annual ISA allowance of £20,000 resets at the start of every new tax year on 6 April. So, if you save your full £20,000 before the end of the current tax year (which ends on 5 April 2025), you could then add up to a further £20,000 when you get your new allowance from 6 April 2025.
In 2025, this means that by using your full ISA allowance both before and after the new tax year, you could enjoy the benefits of tax-free interest on up to £40,000 in one calendar year. By putting money into an ISA every year, the cumulative benefit can have a significant impact on the growth of your savings.
Saving for your sunny days
There are proven psychological benefits to being a regular saver, no matter how much you set aside each month. Did you know, doing this could help you feel more optimistic, sleep a little better and improve your ability to relax?3
At Coventry Building Society we offer a range of cash ISAs, with different features to help you set aside funds for the moments that make life truly memorable. Some allow you to deposit regularly (up to your annual ISA allowance), so you can save at your own pace, or let you deposit a lump sum. Others also offer flexibility, allowing you to withdraw money and replace it later in the same tax year, without impacting your annual allowance***. You can take a look at all the ISAs we offer on our website.
So, if you’re dreaming about a trip to a far-flung destination, planning an experience for a milestone anniversary or simply looking to add some sunshine to your sunny day fund, ISAs can be a great, tax-free way to help you grow your money.
If you’d like to find out more, take a look at our new ISA guides, packed full of information to help you make the most of cash ISAs:
*This is lower for Junior ISAs where the allowance is £9,000, and Lifetime ISAs where the limit is £4,000.
**Your eligible deposits held by a UK establishment of Coventry Building Society are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK’s deposit guarantee scheme. Any deposits you hold above the limit are unlikely to be covered. Please ask us for further information or visit www.fscs.org.uk.
***At Coventry Building Society, you can pay some or all of the full allowance into one cash ISA. However, other ISA providers may allow subscriptions to multiple cash ISAs with the same £20,000 limit within the same tax year.
1. Resolution Foundation - Press Release
2. City AM - More than £1tn languishing in low-interest savings accounts as Brits urged to shop around
3. University of Bristrol - PDF - Understanding The Role Of Savings In Promoting Positive Wellbeing
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