Customers with some of the UK’s biggest banks are being encouraged to take action this April 2025 to increase their savings by up to £250, simply by switching to better interest-rate accounts.
Finance experts say millions of savers across the country continue to leave money sitting in low-interest accounts, potentially missing out on hundreds of pounds each year.
The advice applies to users of Nationwide, Lloyds, NatWest, and Santander, among other banks, especially those who haven’t reviewed their savings options since the start of the new tax year.
Savers Urged to Switch from Low-Yield Accounts
Anyone earning below 3% interest on a savings account is urged to switch immediately. According to savings analysts, transferring funds to a higher-interest Cash ISA or a fixed-rate savings product could result in significant earnings by the end of the financial year.
For example, a saver who deposits £5,000 into a 5% AER account could earn £250 in just 12 months—with minimal effort.
Fiona Peake, personal finance expert at Ocean Finance, emphasized the simplicity of the strategy:
“Whether you’re saving £50 or £5,000, the key is just to start. And where you put your savings really matters.”
Benefits of Using an ISA in 2025
With ISA season in full swing, Peake recommends reviewing the different types of ISAs available:
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Cash ISAs – Great for tax-free, low-risk savings
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Stocks & Shares ISAs – Ideal for long-term investors
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Lifetime ISAs – Best suited for first-time buyers or retirement savers
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Innovative Finance ISAs – Higher risk, but potential for better returns
Each ISA type is tax-free up to the annual limit of £20,000, but it’s crucial to track how much you’ve already contributed across all accounts to avoid penalties.
Personal Savings Allowance and Tax-Free Growth
Peake also highlighted the importance of tax planning through ISAs:
“If you’re close to or over your Personal Savings Allowance, moving savings into a Cash ISA could protect your interest earnings from being taxed.”
This is particularly helpful for those who’ve built up larger balances over time or received interest bonuses from bank promotions.
Key Actions to Take This Month
Finance specialists are recommending households follow these four steps right now to maximize their savings:
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Review current savings interest rate – If it’s under 3%, switch.
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Compare Cash ISAs – Look for rates above 4.5% AER.
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Calculate interest earnings – Use simple online calculators to estimate.
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Track ISA contributions – Stay under the £20,000 limit to avoid penalties.
FAQs
Why are finance experts advising bank customers to claim £250 now?
By moving money into a 5% AER savings account, you could earn £250 on £5,000 in interest within a year—especially relevant during the new tax year.
What’s the issue with leaving money in low-interest accounts?
Accounts with rates below 3% yield very little return. Many households are unknowingly missing out on significant passive income.
Which ISAs are best in April 2025?
Cash ISAs remain a strong choice for most savers. Stocks & Shares ISAs may suit investors with long-term goals, and Lifetime ISAs are ideal for homebuyers or retirement savings.
Is there a tax benefit to using ISAs?
Yes, all ISAs offer tax-free interest up to £20,000 per year, helping savers avoid exceeding their Personal Savings Allowance.
Do these savings tips apply to people under 60?
Yes, especially those with cash ISAs or basic savings accounts. Making the switch could deliver better returns with minimal effort.
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Aanchal is a passionate writer with a keen interest in storytelling, content creation, and creative expression. She enjoys exploring diverse topics and crafting engaging narratives that captivate readers.