As the festive season approaches, you might have plans to put your feet up and reflect on the last 12 months. But while you’re enjoying the celebrations, it’s worth sparing a thought for the year ahead – especially when it comes to your savings.

 

The Autumn Budget brought several updates that could influence how you plan and grow your money in 2025. Whether you’re looking to make the most of your Individual Savings Account (ISA) allowance or explore new savings schemes, understanding these changes can help you get a head start on achieving your goals in the new year.

There was lots of speculation during the lead up to the Budget about how ISAs could change, but the Cancellor confirmed that annual subscription limits will remain frozen until 5 April 2030. If you’re looking to make the most of your tax-free savings allowance, it’s important to remember these ‘ISA’ limits:

 

• £20,000 for cash and stocks & shares ISAs
• £4,000 for Lifetime ISAs (this counts towards the annual £20k limit for ISAs)
• £9,000 for Junior ISAs and Child Trust Funds.

 

The freeze means you can continue to contribute up to these amounts in ISAs and earn interest tax-free in each tax-year, helping you grow your savings whether you’re looking to set aside a safety net fund or planning for a sunny day.

 

With these ISA limits still in place, it’s also important to remember that your annual allowance will reset on 6 April 2025 – so, what you don’t use of your allowance this tax year will be lost. For example, if you were to use up your full £20,000 ISA allowance before the end of the current tax year, you could then add a further £20,000 from your new allowance from 6 April, allowing you to enjoy the benefits of interest on a combined £40,000 of savings – all tax-free.

The Help to Save scheme is a type of savings account offered by the government and available to lower-income savers.

 

Following the Budget, the scheme has been extended, providing lower earners with an incentive to save.

 

To be eligible, you must be in receipt of Working Tax Credit, Child Tax Credit or Universal Credit (with a take-home pay of £793.17 or more in your last monthly assessment period).

 

If you fall into this category, you can contribute up to £50 per month over four years and receive a 50% government bonus at the end of both years two and four. So, for every £1 you save, the government adds 50p up to the £50 per month limit.

 

This means the Help to Save scheme could boost your savings with up to £1,200 in government bonuses over four years, and if you save up to the monthly limit you could build up a fund worth £3,600.

 

You can view more information on how to open an account via the government website.

We can’t predict with certainty what will happen to interest rates in 2025, but with the Bank of England recently making a cut to the base interest rate, there are some expecting further cuts in the future that could mean savings rates fall. A lower interest rate on savings accounts would mean you earn less interest on your money, but if interest rates rise your savings will work harder for you and grow more quickly. 

If you’re keen to put money aside towards something special next year, whether it be a wedding or a luxury holiday, it’s worth planning ahead of time to explore the savings accounts that are available now. There are lots of options to choose from, including ISAs, bonds and regular saver accounts that can all help you work towards your savings goals.

 

As we move into the new year with ISA limits unchanged, there are still plenty of opportunities to grow your savings through a variety of options. If you’re not sure what step to take, consider speaking with a financial advisor about your circumstances.