UK Chancellor Rachel Reeves is expected to unveil plans at this month’s Mansion House speech to reduce the annual tax-free allowance for cash ISAs.

According to government sources, Reeves is considering introducing a new, lower annual limit specifically for cash ISAs, below the existing £20,000 yearly cap on total tax-free savings across all types of ISAs. Speculation ranges from slashing the allowance in half to reducing it to as low as £4,000.  

While the Chancellor has previously pledged not to cut the overall tax-free ISA allowance, including for investments like stocks and shares, she has left open the possibility of imposing a lower threshold on cash ISA contributions.

The move is aimed at encouraging some of the £300bn currently held in cash savings to be redirected into British businesses.

Reeves said: “I do want people to get better returns on their savings, whether that’s in a pension or in their day-to-day savings”. She added that she would not “reduce the £20,000 ISA limit” but did not rule out cutting the allowance for cash ISAs specifically.

What is an ISA?

An ISA, or ‘Individual Savings Account’, is a scheme that allows anybody to hold cash, shares and unit trusts free of tax on dividends, interest, and capital gains. Essentially, it’s a savings account that you don’t pay tax on.  

A cash ISA is a tax-free savings account that allows people to save cash without incurring income tax on interest. They have become more popular over the past two years due to rising interest rates, meaning that savers are paying far more tax on their savings – making cash ISAs very attractive. This has also led to increasing the competitiveness of the savings products.  

You can save up to £20,000 each tax year and receive tax-free interest payments, so when the value of your cash ISA increases, you get to keep all of it tax-free.  

While there is a £20,000 allowance in place for how much you can put in a year, there is not a cap on how much you can accumulate in an ISA over a lifetime.  

When choosing a style of investment to suit your needs, you may want to consider how long you plan to invest for and how much you would like your money to grow. It is also important to understand what movement in value you may or may not be happy with and any potential losses that may happen. That is why getting professional advice can be crucial for understanding how to take those first steps towards a secure financial future.

If you want to find out more, why not give us a call on 0333 323 9065 or book a free non-committal initial consultation with one of our chartered advisers to see how we can help. 

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions. 

The Financial Conduct Authority (FCA) does not regulate cash or tax advice. 

Question: In 2024/25, I was employed until summer 2024 and paid higher-rate tax. Since then, I’ve not been working, instead living off my savings. I exceeded the £500 Personal Savings Allowance (PSA) last year, but now I’m unsure what my PSA is this year. I’m in my late 30s with no other income apart from savings (easy-access accounts, NS&I Income Bonds, Premium Bonds, and annual interest from fixed-rate accounts). I also have ISAs but haven’t withdrawn from them. I am worried that HMRC will send me a huge tax bill? How does HMRC know how much interest I’ve earned?

"I am confused about how much tax 

I will need to pay on my savings interest."

It's great that you’re thinking ahead and keeping an eye on your tax position – it can feel a bit confusing, especially if your income changes during the year. While I’m not a tax adviser and can’t give personal tax advice, I can definitely help clarify some of the key points you’ve raised. If you want complete certainty for your situation, speaking directly with HMRC or a qualified accountant is always a good idea.

Understanding the Personal Savings Allowance (PSA) 

The amount of savings interest you can earn tax-free each year – your PSA – depends on your overall taxable income for the tax year (from 6 April to the following 5 April). It’s different depending on the level of tax you pay in each individual year.

• For basic rate taxpayers, your PSA is £1,000 of tax-free savings interest.
• For higher rate taxpayers (40%), it’s £500
• But, if you are an additional-rate (45%) taxpayer, you do not have a PSA at all.

You mentioned that you were employed until the summer of 2024. If the income from your savings and your salary took you into the higher rate tax bracket in 2024/25 then your PSA was £500, regardless of whether you were only employed for part of the year. The PSA is based on your marginal rate over the course of the tax year.  

Looking at the current tax year (2025/26) – if your only income now is from savings, and it stays below the higher-rate threshold, you may be classed as a basic-rate taxpayer, giving you a larger PSA of £1,000. But this depends on your total income for the year – if circumstances change and your income increases before the end of this tax year, your PSA could reduce again.

One thing to note is that not all of your savings interest is necessarily taxable. NS&I Premium Bond prizes, and any interest earned on ISAs are tax-free and don’t count towards your taxable income or Personal Savings Allowance. However, interest from NS&I Income Bonds, easy-access accounts, and fixed-rate bonds is taxable and does count.

Some additional good news, although it comes with additional complications for your calculations, is that if your income is all provided from your cash savings, you should be eligible for an extra tax-free allowance called the ‘starting rate for savings’.  

Your allowances for earning interest before you have to pay tax on it include your:

• Personal Allowance (currently £12,570) – this is applied first
• Starting Rate for savings (up to £5,000) which applies after the Personal Allowance if your income from wages and pensions (not savings interest) is less than £17,570
• On top of that, you also get a Personal Savings Allowance (either £1,000 or £500)

You get these allowances each tax year (6 April to 5 April). How much you get depends on your income and where it comes from.

So, potentially, you could earn up to £18,570 of savings interest tax-free in a year if you have no other income – a generous allowance.

There’s more information here on how these allowances work together.

Will HMRC send you a tax bill?

Possibly, but only if tax is due. Banks, building societies and NS&I report your taxable interest directly to HMRC each year.  

If you are in employment or receiving a pension, and therefore part of the PAYE scheme, any tax due, if you have exceeded the PSA, will usually be collected via a change to your tax code in the following tax year.

But if you are not employed, you may need to fill in a Self-Assessment return and pay the tax due.

What’s important to remember is that it is your responsibility to make sure that you pay any tax due if your interest does exceed your PSA, so keep track of how much interest you are earning, whether you physically take it from your savings accounts or allow it to compound back into the account. But do reach out to HMRC or an adviser if you need to double check your own circumstances – it’s always best to be sure.

Finally, if you continue to rely on savings for income, it’s well worth making the most of your ISAs, where interest and investment growth are always tax-free.

Ask me a question

This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The Financial Conduct Authority (FCA) does not regulate cash or tax advice 

There’s a prevailing myth that large cash holdings signal a lack of investment knowledge or a fear of the stock markets. This is one of the reasons that the Chancellor, Rachel Reeves, is rumoured to be about to cut the cash ISA allowance – to encourage people to invest more of their cash savings.

But our joint research with Insignis, an independent cash savings platform provider and TPO’s chosen platform partner, shows that for many, cash is a deliberate and integral part of long-term financial planning.

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The role of cash in financial planning 

More than half (53%) of savers cited nearing or being in retirement as the primary reason for holding cash, aiming to reduce exposure to market volatility and preserve capital.  

At the same time, 76% of respondents said that earning a competitive return on their cash holdings was a vital part of their overall wealth strategy. Interestingly, only 11% of savers pointed to a lack of investment experience as their reason for holding cash.  

Advisers echoed this sentiment, with 8 in 10 stating they regularly incorporate cash management discussions into clients’ broader financial strategies. Many view it not as a compromise, but a source of financial certainty, particularly when market turbulence or life events demand liquidity and security over returns. As financial planners, we always consider the importance of having a healthy cash balance to avoid forced selling of investments during market downturns.

But making that cash work hard is also important. Rather than leaving it to languish in a poor paying account, earning a competitive rate of interest on cash is effectively free money and can go a long way to paying for any financial advice required to keep the rest of your wealth providing for you and your loved ones.

All of that said, for many, the perceived or actual hassle of reviewing multiple savings accounts means that they don’t manage their cash, allowing their banks to take advantage of their inertia. Which is why cash platforms are so valuable. They remove the administrative burden of opening and managing multiple savings accounts, helping savers to earn higher returns with greater protection.  

Over the past decade, the cash savings landscape has evolved significantly, due to the improvement in technology. Today, as well as online savings accounts dominating the best buy tables, mobile app-only accounts are becoming more and more popular.  

And this improvement in technological solutions has seen an increase in the use of cash savings platforms.  

From a niche solution to a mainstream must-have, the leading platforms now have many partner banks making them an obvious solution for savers trying to manage multiple savings accounts.

How do cash platforms work?

With just one application and one login, you can access many competitive savings accounts from multiple providers – keeping your cash working hard whilst being protected by the Financial Services Compensation Scheme (FSCS).

Once you have registered, you move your money from your bank account into a hub account on the platform, from which it can be distributed at the click of a button. You simply choose from the available accounts, state how much you want to deposit into each, and the cash will be moved into one or multiple accounts.

You can switch when a new, improved account comes along, or when your bond matures, without the need to fill in yet another application, with a new login and/or password to remember and more security questions and ID checks to fulfil.  

Even better, you’ll be reminded when better options become available and when any fixed-rate bonds or notice accounts are coming to an end, so you can keep your money earning more. For those seeking diversification, better rates and protection via multiple banking partners, cash platforms are proving to be indispensable.

But they aren’t for everyone, especially for those who have the time and inclination to shop around and open lots of different accounts themselves.  

As platforms are not yet whole of market, you may be able to find even better rates elsewhere – although there are times when platforms offer market leading and exclusive products. Added to that, there is a fee involved when using a platform, either an explicit fee that you’ll pay depending on how much is on the platform, or in the form of a reduced interest rate if the platform takes its fees from the providers offerings.

But the bottom line is that if you earn more interest after the fee has been taken into consideration, than you would otherwise, then it’s good value!

A surge in fixed-term bond maturities

It’s a good time for savers to be aware of the benefits of cash platforms. According to Paragon Bank, more than a million fixed-rate savings deals worth about £70.5 billion, are set to mature in the next four months. Many of these were opened during the interest rate peak of 2023–2024, meaning that a significant volume of cash is soon to be looking for a new home.

While this offers an opportunity to re-lock money into the competitive accounts that are still available, it also presents a tax trap for the unwary. With the Personal Savings Allowance (PSA) remaining frozen since inception in 2016, many savers will now face tax bills on interest earned outside of a cash ISA. And for those with multiple accounts, it can be hard to keep track of how much interest you have earned and therefore if you have paid the right amount of tax.

That’s where one of the standout features of cash platforms comes into its own: the interest summary. Platforms consolidate this information into a single view, making it far easier to check if your tax code has been correctly amended or to help submit accurate self-assessment returns.

Cash is the cornerstone of a resilient financial plan – not a weakness. It’s the pot that protects, especially if managed well.

Take a few minutes to find out the kind of returns you could expect on your savings by requesting a free no obligation illustration from our Savers Hub cash platform – powered by Insignis.

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Source research - Survey Methodology: 
Data was collected by The Private Office and Insignis in April 2025 via a survey of  4,360 adult UK savers and 91 UK-based financial advisers from a number of different companies.

This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The Financial Conduct Authority (FCA) does not regulate cash or tax advice. 

It’s been a week packed with economic news – with both an inflation update and a base rate decision happening within a day of each other.  

The inflation data was released first, as this is important information for the Bank of England’s Monetary Policy Committee (MPC) to chew over when making their decision on interest rates.  

But it was not good news.

It was thought that inflation would ease slightly in May, as April saw a number of key price rises, such as energy costs and an increase in employer National Insurance contributions, which is why we saw the jump last month. However, the Office for National Statistics (ONS) confirmed that the rate of Consumer Prices inflation (CPI) remained at 3.4% in the 12 months to May 2025 – keeping the rising cost of living at the highest it’s been for more than a year.  

What has caused inflation to stick?

In general, a main concern for households will be that the cost of food increased faster in the 12 months to May 2025, than last month – up 4.4% year on year, from 3.4% in the 12 months to April. But this was spurred on by a record increase in the price of chocolate – soaring by more than 17% in the last 12 months due to poor harvests in the main cocoa producers of Ghana and the Ivory Coast.

Those who don’t eat chocolate therefore are likely to be less affected – remember that the headline rate of inflation is based on a huge virtual basket of goods and services that we, as a nation, consume. But we all consume different things, so will be affected differently.

It wasn’t just chocolate that has seen a significant increase in price. Meat, in particular beef and veal, has increased by 17% too. The price rise of chicken has also accelerated a little over the last month – but it’s a much more manageable 4.4%, so could be a more affordable option?

Taking a more positive view, the price of some clothing and footwear actually fell over the last 12 months, but by a much more underwhelming 0.3%.  

The bottom line though, is that prices are still rising by more than the government’s target of 2% - so this is something the Bank of England needs to take into consideration when deciding on what to do with interest rates. 

What does this mean for savers?

The good news for savers is that with base rate remaining at 4.25%, savings rates should not fall either – although it depends who you hold your cash with!

A number of high street banks are currently in the process of cutting the rates on their easy access accounts in particular – so if you are still holding cash with one of these banks, it’s time to move. With inflation sticking at 3.4%, leaving your cash to fester in a poor paying account will not only mean less interest paid to you, but your cash will be losing its purchasing power too.

For example, if you have £10,000 in an account with a high street bank earning 1.15% AER (NatWest Flexible Saver), with inflation at 3.4%, after just one year, although the total balance including accrued interest would be £10,115, the real value after inflation would be just £9,782! If you were to choose a more competitive account paying around 4.50%, not only would the total balance be more – at £10,450 - the real value would be positive too - £10,106. So, in this example, choosing the wrong account could hit your purchasing power by more than £300!  

We’ve got an easy to use Inflation Calculator which shows you exactly what the impact is of inflation on your own personal savings accounts. Just put in your balances and the interest rate you’re earning, and we’ll show you if you are in positive or negative territory! 

See how inflation is affecting your cash savings below:

Should I fix some of my savings? 

For those that don’t want or need to keep all their money in cash there are plenty of inflation beating options open to you, especially if you can lock some of it away.

With the current expectation that there will be at least two base rate cuts later this year, this would almost certainly lead to even more rate cuts to variable rate accounts, so locking in some of your cash could be a wise decision to hedge against this.

I’ve been pleasantly surprised to see that we have actually seen competition between key providers pushing the rates of fixed term accounts upwards recently.

In fact, the 1-year and 2-year top rates are now the highest they’ve been since early May,  with Cynergy Bank paying 4.55% AER and 4.45% respectively.

The top 3-year bonds with JN Bank and Birmingham Bank, are both offering 4.45% too.

Over 5-years the news has also been positive, as Birmingham Bank has upped its market- leading rate to 4.47% AER,  pipping the next best with Hampshire Trust Bank by just 0.01%.

Whilst the new better rates are only marginally higher, it does mean that savers have plenty of options to choose from that still beat inflation – especially if we see interest rates and inflation fall in the next few months and years.  

So, if you have been procrastinating, now could be the time to get on and fix some of your cash, especially if it’s languishing in a poor paying account whilst you decide when to make your move.

That said, remember that generally there is no access to your cash until maturity in a fixed rate bond and whilst fixed term cash ISAs do allow access, there is normally a hefty penalty. So, you do need to be comfortable that you don’t need the money that you are thinking of tying up.

Keep an eye on our Best Buy tables for the latest top rates. 

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The interest rates in this article are correct as at 20/6/2025.

This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.
The Financial Conduct Authority (FCA) does not regulate cash advice.

The latest figures from the Bank of England have revealed a surge in cash ISA deposits, the sharpest increase ever recorded, and while March and April are typically strong months for ISA subscriptions, this year has seen an exceptional level of urgency.  

The numbers speak for themselves: in April 2025 over £14 billion was squirrelled away into these valuable tax-free cash ISA savings accounts – more than double the amount deposited in March.  Savers are moving fast, and the overriding reason appears to be concern that the current cash ISA allowance may be under threat.

While no formal proposals have been tabled, it would not be the first time that tax-efficient savings vehicles find themselves in the Treasury’s crosshairs. In times of fiscal tightening, generous allowances are often seen as an easy win. However, on this occasion, the reason that this change may be introduced is reported to be to try and encourage people to invest into UK investments and stock markets, rather than leave their money in cash. The overall ISA allowance of £20,000 is not to be reduced.

Savers appear to be acting pre-emptively, funnelling cash into ISAs while the current rules remain intact, hoping that any changes made will not be retrospective.

Cash ISAs important as higher rates use up Personal Savings Allowance 

The fact that interest rates are so much higher than they were a few years ago means that cash ISAs are useful for savers looking to keep their returns as tax efficient as possible. After years of ultra-low returns, many savers are now enjoying meaningful interest on their cash once again, with many cash ISAs offering an interest rate in excess of 4% — an attractive prospect when paired with the promise of tax-free returns. For taxpayers in particular, the ability to shield interest from HMRC has become more valuable as the Personal Savings Allowance (PSA) is quickly used up.

Whilst five years ago, when even some of the top interest rates were around just 1.5%, it would have taken a deposit of over £66,000 to breach the basic rate PSA of £1,000. Today, with interest rates of 4% or more, just £25,000 in a top savings account would produce more than £1,000. For higher rate taxpayers it’s just £12,500 as the allowance is halved to £500  

Although interest rates have fallen over the last six months in line with base rates, more people realise that it’s unlikely we’ll see interest rates heading back down to the bad old days, when really low interest rates meant that you could often ignore the tax impact on savings interest.

Check the small print before you commit 

It’s important, however, that savers don’t rush in without checking the finer details. It’s crucial to check what terms and conditions apply as many of the easy access cash ISAs include short-term bonuses which have a ‘sell by date’ and/or restricted access.  

In some cases, it might still be worth using taxable savings, especially if you’re not close to breaching your PSA. But with allowances under threat, many are rightly deciding that the long-term, tax-free shelter of an ISA is worth making the most of while they can.

Ultimately, while the rush to deposit into cash ISAs may be driven by anxiety about the allowance being reduced, it’s also a good reminder of the value of making the most of your tax-free allowances. Whether it’s a cash ISA or a stocks and shares one – or whether you put money into a pension - being as tax efficient as possible remains one of the simplest and most effective ways to protect your savings and investments.  

If you want to check that you are making the most of your tax allowances, why not speak to a TPO adviser and arrange a free initial consultation today.

Arrange your free initial consultation 

This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The Financial Conduct Authority (FCA) does not regulate cash flow planning or tax advice. 

Inflation in the UK jumped suddenly to 3.5% last month – the highest rate recorded in more than a year. The rise came after significant increases in energy costs, water bills and council tax – essentially unavoidable household bills – putting inflation back on the rise again. Water and sewerage bills were the standout, rising by 26.1%, the fastest rate of increase since privatisation in 1989.

The unwanted surge in inflation, as reported by the Office for National Statistics (ONS), came after a decline in the rate of inflation over the first quarter of the year to just 2.6% in March. It was hoped that the rate of inflation would reach the Bank of England’s target of 2.0% and that interest rates would continue to fall as a result.

It was generally expected that inflation would rise, but the jump was more than anticipated. A poll of City economists had forecast a rise of 3.3% in April, while the central bank expected last month’s inflation rate to hit 3.4%.  

“Businesses are experiencing cost pressures amid the rise in national minimum/living wage, employer’s national insurance contributions and regulated price increases. Some of these costs will be passed down to consumers through higher prices.” – Monica George Michail, Economist at the National Institute of Economic and Social Research.  

What is inflation and how is it measured?

Inflation is a measure of how the prices of goods and services have increased over time. Goods are tangible items sold to customers, such as food, while services are tasks performed for the benefit of recipients, such as a haircut. Generally, this increase is measured by considering the cost of things today compared to how much they cost a year ago. The average increase between these prices is demonstrated in the inflation rate.  

Rising interest rates directly affect the cost of living. For example, if the price of a bottle of milk is £1, and inflation is increasing by 5%, then your bottle of milk will cost you 5p more. Or, in other words, the spending power of your money has decreased by 5%.  

Ideally, the Government wants to keep inflation low and stable. The general mandated target for the Bank of England is 2%. Anything significantly above or below this target is thought to cause issues for the economy.  

The cost of living surged in recent years, with inflation peaking at 11% in 2022 - way above the Bank of England's 2% target, partly due to the increase in energy prices following Russia's invasion of Ukraine.

Inflationary changes often affect many areas of financial life, and can be difficult to keep track of. Our chartered advisers are unbiased, meaning that they can give whole of market advice, and so are best placed to give you a plan tailored exactly to your personal financial goals.  

If you’d like to know more, request a free non-committal initial consultation with one of our team or give us a call on 0333 323 9065.

Arrange your free initial consultation 

This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

More than £6.3 billion was deposited into cash ISAs in March 2025, the latest figures from the Bank of England show. This sharp rise, up from just under £4 billion in February illustrates the ongoing value that cash ISAs offer to savers.

March is always a key month for ISA deposits as people scramble to make use of their ISA allowance before the end of the tax year. This year’s spike however is particularly notable, likely driven by speculation that chancellor Rachel Reeves may cut the cash ISA annual allowance to as little as £4,000 – from its current level of £20,000, in a bid to encourage people to invest their money, rather than leaving it in cash.  

No changes were announced in the recent Spring Statement which has only intensified cash ISA activity. Many savers are now rushing to use their allowance as soon as possible, in the hope that any future changes will not be applied retrospectively.

The impact of rising interest rates 

Another key reason for the ongoing popularity of the cash ISA is because savers are paying more interest on their savings, given that interest rates are far higher than they were. In April 2016, the Personal Savings Allowance (PSA) was introduced.  All basic and higher rate taxpayers have a PSA - £1,000 a year and £500 a year respectively – which means that they can earn up to this amount in interest on their cash savings, before paying any tax. Additional rate taxpayers do not have a PSA. When the PSA was introduced, interest rates were a fraction of what they are today, so savers are now fully utilising their PSA with smaller deposits.  

Back in April 2016, a top 1-year bond was paying 1.90% - so it would have taken a deposit of £52,600 to pretty much use up the basic rate PSA. Today with the top 1-year bond paying 4.55% just £22,000 will produce £1,000 in interest.

So, cash ISAs have become more and more popular.

We’ll have to wait and see what the fate of the cash ISA will be – in the meantime, it makes sense to use your allowance as soon as possible, especially if you pay tax on your savings. 

Check out our Best Buy tables here. 

As a final thought – instead of reducing the cash ISA allowance, why not encourage those who collectively have over £900 billion deposited in taxable easy access accounts, much of which will be earning less than inflation, to move that money into investments that could help them to earn more in the longer term?  

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The opinions shared in this article are solely those of the individual and they do not necessarily reflect those of The Private Office.

The Financial Conduct Authority (FCA) does not regulate cash flow planning, estate planning, tax or trust advice. 

Following the latest Bank of England base rate cut on 8th May of 0.25%, to 4.25%, many households and investors are wondering what the implications might be for their financial plans. And if the forecasts are to be believed, it won’t be the last one. While that might sound like good news for borrowers, it’s not such a rosy picture for savers. And for those with investments, pensions or mortgages, now could be the right time to give your finances a once-over. 

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Good news for borrowers – not so great for savers 

For savers, the prospect of a lower base rate is generally unwelcome. Interest paid on savings accounts typically tracks the base rate to some extent, and we had already seen a downturn in fixed-term savings rates, in anticipation of the base rate decision. Variable rates are likely to follow suit now the rate cut has happened.  

Providers often anticipate base rate cuts and adjust their offerings accordingly, meaning the window to secure attractive rates may be closing. So if you’ve been toying with the idea of locking in a fixed rate, you may want to get on with it. There’s a decent chance that what’s on offer now won’t be around much longer, and holding off could mean settling for less.   

Take a look at our Best Buy tables to see the best rates available.

Investors: time to get your money working again? 

Over the last couple of years, rising interest rates made cash a pretty comfortable place to sit. But if those rates are now heading south, we expect more people to look again at the stock market, to stay ahead of inflation and keep their money working harder.  

From a broader investment standpoint, lower interest rates can be a boost to asset prices as borrowing becomes cheaper, for individuals and businesses, and the returns from cash become less attractive. That often supports growth in certain sectors and can offer opportunities for investors who know where to look.

For those who don’t know where to look, the investment experts at TPO can help. We take this kind of market insight into account when reviewing and managing client portfolios - helping investors stay aligned with their goals, even as economic conditions shift.

That said, keeping enough cash on hand for short-term needs is still vital - maintaining a sensible cash buffer remains important to provide flexibility and peace of mind during periods of market volatility. It means you’re not forced to sell investments during market dips.

Thinking about an annuity? Timing matters 

If you’re nearing retirement and considering buying an annuity, the base rate change is something to pay close attention to. Falling interest rates tend to drag annuity rates down with them, meaning the income you can secure for life may end up being lower than it was just a few weeks ago. And with annuities enjoying something of a resurgence recently, it’s not just about whether you buy one – it’s also about when you do and how you go about it. The key here is not to take the first offer from your pension provider. There are often better deals available elsewhere, particularly for those with any health issues - even minor ones can make a difference.  

Deciding whether an annuity is the right option is not always straightforward, and making well-informed choices in retirement is essential. This is an area where professional advice can be invaluable. 

Mortgage holders could benefit - but make the most of it 

Mortgage holders may view a base rate cut more favourably. Those on variable rate deals or trackers will likely see their monthly payments fall, while those due to remortgage could benefit from lower rates than might otherwise have been available.  

But don’t just enjoy the lower cost and leave it at that. If your mortgage is more affordable, why not consider overpaying a little each month (if your lender allows) or using the extra cash to top up your pension or ISA? It’s all about making your money stretch further while the opportunity’s there, to make your future financial position healthier.  

For many, the value of impartial, expert advice cannot be overstated. Whether you are planning for retirement, managing investments or looking to optimise your savings, a tailored financial plan can offer both clarity and confidence.  

If you’re unsure how the recent base rate decision might affect your financial plans, or if you simply want to make sure you’re on the right path, now may be the ideal time to get in touch. 

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

Investment returns are not guaranteed, and you may get back less than you originally invested. Past performance is not a guide to future returns.

The Financial Conduct Authority (FCA) does not regulate cash flow planning or tax.

National Savings & Investments (NS&I) has raised interest rates across its range of Guaranteed Income Bonds and Guaranteed Growth Bonds – collectively known as their British Savings Bonds. And for the first time in over 15 years, all four bond terms: 1, 2, 3, and 5 years are available to both new and existing customers.

This move is presumably a response to the government's decision in the Spring Budget to raise NS&I’s net financing target for 2024–25, from £9 billion in the previous tax year, to £12 billion in 2025-26. A notable 33% increase.

The net financing target is the amount of money NS&I needs to raise from savers, allowing for any customer withdrawals and money paid out as Premium Bond prizes. With a higher fundraising target, it’s not surprising that NS&I is stepping up efforts to attract savers’ money – good news for savers.

What’s changed?

NS&I has made moderate but welcome improvements to its fixed-term savings products. Here’s how the rates compare before and after the latest update:

Source: NS&I, 2025

However, even with these new rates, better returns can still be found elsewhere - particularly if you're happy to look beyond the high-street names and explore the wider savings market.

For example, Cynergy Bank is paying 4.65% on its 1-year Fixed Rate Bond – on a deposit of £50,000 there’s a difference of earning £2,325 (before the deduction of tax) or £2,025 with NS&I.

Take a look at our Best Buy tables for all the current top rates.

Over longer periods, this adds up significantly.

With the top 5-year bond on the market paying 4.56% (Secure Trust Bank) a deposit of £50,000 would provide interest of £250 more each year than it would with NS&I – and if you were to roll over and compound that interest, you could miss out on nearly £1,500 over the term. Not a trivial amount.

Why the rate hikes now?

Considering that the markets are anticipating a base rate cut at next Bank of England MPC meeting, this is an interesting move from NS&I.

NS&I generally relies on its trusted name and government backing to attract savers, as its rates are rarely market leading. However, the revised net financing target, set by the Treasury not NS&I itself, is likely to be the driving force of this decision. Essentially, NS&I is tasked with helping to raise money for the government, directly from savers. When the target increases, as it has now, NS&I need to raise its rates to become more attractive.

Although not offering top rates, NS&I products offer a unique advantage that any funds deposited are 100% backed by HM Treasury, not limited to the Financial Services Compensation Scheme’s (FSCS) usual £85,000 limit per person, per institution. And savers can deposit up to £1m into each issue of the British Savings Bonds – and more still into the easy access accounts. This security is unmatched and gives real peace of mind, especially for those with large sums to put away.

It’s all about what matters most to you. If absolute security is your priority and you have a large cash holding, NS&I is a useful option. But if maximising your return is the aim, and you're willing to split your savings between different providers, keeping within the FSCS limit of £85,000 per institution, there are certainly stronger rates out there.

For those with larger amounts of cash, the rise of cash savings platforms has added a simple and flexible way to get more from your savings.

Think of them like a supermarket for savings, offering a range of competitive accounts from different banks, all accessible through a single application and login. Whether you’re after easy access or fixed-term options, these platforms do often offer competitive and sometimes even market-leading and exclusive products even if they’re not whole of the market.

Perhaps most importantly, they make it easier to spread your savings across multiple banks, helping you stay within FSCS protection limits while keeping your money working harder.

With our Savers Hub, powered by Insignis, you can now open, manage and switch between accounts all in one place bringing ease and efficiency to managing your savings.

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The Financial Conduct Authority (FCA) does not regulate cash advice.

Question: As I was a bit late getting organised, I put £20,000 into an easy-access cash ISA at the end of the last tax year in a last-minute effort to use up my allowance, but now I’d like to move it to a fixed-rate ISA. Are there any restrictions on transferring it so soon? And will the transfer affect this year’s ISA allowance?

It was a smart move to make use of your ISA allowance before the end of the last tax year—especially with increasing speculation that the current £20,000 cash ISA limit could be reduced in the near future. Every year, many people miss out simply by not acting in time, so even a last-minute deposit means you’ve managed to make the most of your tax-free savings allowance.

Choosing an easy access ISA was a sensible decision too. It gives you the flexibility to pause and reflect on how and when you might need access to that money - perfect for reassessing your financial goals without locking anything in immediately.

Now to your question - yes, you absolutely can move funds from an easy access ISA to another ISA, even if you just opened it. There’s no minimum time you need to hold the funds before transferring. You can choose to transfer the full amount or just a portion, either to a new provider or within the same one, especially if they’re offering a competitive fixed rate that fits your needs. But it’s always wise to shop around to get the best returns. You can find our best buy tables here.

Just one crucial reminder: always transfer using your new provider’s official ISA transfer process. Withdrawing the money yourself and redepositing it could strip away the tax-free status and use up part or all of the new year’s ISA allowance.

For those who have already opened the current year’s cash ISA, following the ISA rule changes introduced in April 2024, you now have even greater flexibility when it comes to transferring. Unlike before, when only full transfers of the current year’s ISA were allowed, you can now make partial transfers too - giving you more control over how you manage your savings.

Importantly, as you managed to open and deposit cash into your ISA ahead of the end of the tax year on 5th April 2025, you can still deposit up to £20,000 until 5th April 2026, as well as transferring last year’s easy access ISA.

That said, it’s worth getting a move on - both with transferring your existing ISA and opening a new one. There’s a lot of talk in the markets about possible interest rate cuts in the near future. If you’re considering locking into a fixed rate, now might be the time to act before the most attractive deals disappear. Fixing your rate now could help protect your savings from potential rate drops, giving you the chance to enjoy inflation-beating, tax-free interest over the term.

And remember, using your new ISA allowance sooner rather than later means you start earning tax-free interest earlier, which could make a meaningful difference over time. 

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions. 

The Financial Conduct Authority (FCA) does not regulate tax advice. 

The opinions shared in this article are solely those of the individual and they do not necessarily reflect those of The Private Office.