Monzo has issued an update about its savings services as major changes to savings allowances approach next year. Jo Phillips, general manager for Wealth at Monzo, urged customers to "get ahead" of the changes.
Phillips advised: "My advice to savers is to keep making full use of your annual ISA allowance where you comfortably can - it remains a vital way to earn tax-free interest on your hard-earned savings." She added: "If you're under 65, you can still make the most of the full £20,000 limit this tax year. But it’s worth getting ahead of next April’s changes today."
New ISA limits from April
Under current rules, savers can deposit up to £20,000 each tax year into tax-free ISAs, split between cash ISAs and stocks and shares ISAs as they choose. From next April, savers under 65 will only be able to use £12,000 for cash deposits, with the remaining £8,000 available only for investment-based accounts.
The reduced cash ISA allowance is intended to encourage more people to invest, as stocks and shares typically outperform cash interest rates over the long term.
Monzo's investment options
Phillips urged customers to prepare: "Start researching your options for any savings above the proposed £12,000 cash limit, or even start investing small amounts now to build that habit for the future." She said the system needs to be made "simpler and more accessible" to encourage investing, warning that many account holders are missing out.
She noted: "Millions leave money sitting in cash simply because they lack the confidence or support to invest. That's why at Monzo, we've really focused on lowering the barriers to investing." Customers can start investing with as little as £1, and automated features allow regular top-ups. Phillips highlighted that a third of Monzo's customers were first-time investors at launch, and over half now invest every 30 days.
Policy changes urged
Monzo offers stocks and shares ISAs and general investment accounts, available to customers with a current account. Phillips called for a policy framework enabling firms to use technology, personalised support, and real-time financial information to help people manage long-term finances.
