Get Prepared for the New Tax YearThe 2025-2026 tax year started today which means that you now have the following allowances to take advantage of for the next 12 months: You can pay up to £20,000 into ISA products per year You can pay up to £4,000 into a Lifetime ISA per year You can earn up to £1,000 in side hustles before you pay tax You can earn up to £500 in dividends before you pay tax (outside of an ISA, private companies, etc.) You can make up to £3,000 of capital gains before you pay tax (outside of an ISA)
Top Paying Cash ISAs (The Reality)You are going to need to ignore the noise on the top paying cash ISAs from the nation’s favourite savings comparison sites… With Cash ISA providers now offering “initial period bonus interest” it really scuppers how the calculations of your annual interest rate work and I believe that these sites are not providing clear figures As an example, Plum are both listed as the highest paying Cash ISAs on their sites paying 5.92% AER, well you would only actually receive this rate for the first 3 months as 5.92% is made up of an underlying interest rate of 3.54% and a 3 month bonus of 2.38% So if you paid in your £20,000 today, you would earn 5.92% for 3 months and then 3.54% for the next 9 months meaning your actual AER (annual equivalent rate of interest) would be 4.14% Now there are a number of offers like this which are worth taking advantage of, but you WILL need to transfer your ISA to a new provider later down the line to prevent yourself from losing out on the best rates Best-Buy Cash ISAs (If you switch later) Plum - 5.92% for 3 months, 3.54% afterwards (variable) This ISA is non-flexible meaning you lose the ISA benefits if you withdraw from the account This interest rate is available for new customers only and you will want to switch to a new provider 3 months later to avoid a drop in interest rates Chip - 5.90% for 3 months, 4.32% afterwards (variable) This ISA is flexible meaning you can withdraw from the ISA without impacting your £20,000 allowance when you pay the same amounts back into the same ISA This interest rate is available for new customers only and you will want to switch to a new provider 3 months later to avoid a drop in interest rates Moneybox - 5.67% for 3 months, 4.2% afterwards (variable) This ISA is flexible meaning you can withdraw from the ISA without impacting your £20,000 allowance when you pay the same amounts back into the same ISA This interest rate is available for new customers only and you will want to switch to a new provider 3 months later to avoid a drop in interest rates Trading 212 - 5.60% for 3 months, 4.50% afterwards (variable) This ISA is flexible meaning you can withdraw from the ISA without impacting your £20,000 allowance when you pay the same amounts back into the same ISA This interest rate is available for new customers only and you will want to switch to a new provider 3 months later to avoid a drop in interest rates You can also get your hands on a free share worth up to £100 if you open a Stocks & Shares ISA with them and deposit just £1
Best-Buy Cash ISAs (No need to switch later) Tembo - 4.80% (variable) + £15 - £250 for newbies This ISA is non-flexible meaning you lose the ISA benefits if you withdraw from the account The cash bonus forms part of a referral scheme available for people who use my link, most will get £15 but is available to all who deposit £500+ as new customers
Best-Buy Fixed Rate Cash ISAs With uncertainties in the market, you may wish to lock-in interest rates for a certain period, if this is you then here are the best options right now: 1 Year Fix - UBL UK - 4.53% 2 Year Fix - Furness Building Society - 4.45% 3 Year Fix - UBL UK - 4.41% 5 Year Fix - Nottingham Building Society - 4.3%
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