While this article is supposed to be helpful, it is not financial advice. ISA allowances and rules can change, and any benefits will depend on your personal circumstances, so always do your own research.
If you aren’t confident in making decisions about your finances, you can seek help from a financial advisor. Remember, investing is not the same as putting money in a savings account. Your money is at risk and you could get back less than you put in.
1. Get familiar with the different kinds of tax allowance
Here, we’ll break down the different tax allowances for savings and investments, and where to find more information about them. Remember, these all depend on your specific circumstances, such as your employment, so please do your own research to determine what your own allowance amounts are.
Personal savings allowance
Depending on your income, you may have a personal savings allowance. This means you can earn a certain amount of interest on savings or dividends tax-free, even if they aren’t in an ISA. As an example, if you’re in a basic rate income tax band, you would have a personal savings allowance of £1,000 for savings, and £500 for dividends. As an example, if you had a Triodos Online Saver Plus with an interest rate of 2.2%, you could have approximately £45,450 in a savings before you’d start paying tax on the interest. Always check your savings allowance and dividends allowance against your income tax band.
ISA allowance
The 2026/27 tax year is the last year that everyone has access to £20,000 ISA allowance. This means any interest or dividends earned by money in an ISA account is tax-free. This can be split between different ISA types, such as the Cash ISA, Stocks and Shares ISA, Innovative Finance ISA or Lifetime ISA - or you can choose to keep your entire allowance in one type of account. You can have different accounts with different providers, but your allowance stays the same. From the 2027/28 tax year onwards, the allowance is changing for some people - you can read more about this here.
Pension allowance
An annual pension allowance is the most you can save in your pension pots before you pay tax. The standard annual pension allowance is £60,000. This applies to all your private pensions, as well as any workplace pensions. Depending on income or other personal circumstances, you may have a different allowance – you can check here.
Other kinds of allowances
There are some other allowances that might affect your savings or investments, such as the marriage or married couple’s allowance, or the blind person’s allowance. You can read more about these here.
2. Look at your savings goals
The new tax year is a great time to review your budget, and think about how much you want to direct into your pension, savings or investments.
A good starting point might be to look at where your existing savings are kept. For example, it’s a good idea to separate larger savings, such as money for a house deposit, from savings you might need to be more accessible, such as for travel or gifts. Other examples of savings you might need easy access to could include car expenses, home repairs, saving for a larger purchase such as a new phone, or dental/healthcare. It’s a good idea to try and build up an emergency fund – a good goal to have is to save at least three months of your monthly salary.
When you’ve worked out how much money you want to set aside for certain savings pots and your emergency fund, you could consider investments for the longer term - you shouldn’t invest any money you may need access to in the next five years. Investing can be a good middle ground between your savings and your pension, which you often can’t take money out of until you reach at least 55 years of age.
When thinking about your savings or investment goals, you might also consider the kind of future you want to support, whether that’s the environment, social impact, or future generations.
3. Think about what accounts you need
Once you’ve worked out what you want to save or invest for, you could then consider what type of accounts you need and plan to open or transfer to them accordingly.
The first week of the tax year is a great time to front-load any ISA contributions, because your money will compound tax-free for the entire year.
And remember, money in an ISA stays tax-free year after year, so even if you think you don’t have enough savings to pay tax on the interest now, by starting to save in an ISA now, you’re ensuring tax efficiency for the future too.
Once you know what you’re saving or investing for, you can choose accounts that not only suit your financial goals, but also align with how you want your money to be used. With Triodos, your savings are used to support projects that aim to create positive social and environmental change. Here are some of the ISA accounts you can make use of with Triodos Bank:
Online Cash ISA
With a Triodos Online Cash ISA, you can deposit money regularly, have instant access to your money, and you can earn interest tax-free. It’s also a flexible ISA, which means that you can withdraw and replace money in the same tax year without the replacement counting further towards your subscription allowance for that tax year. This means you can use your Online Cash ISA for both your shorter or longer-term savings, as dipping in and out won’t affect the benefits of your account.
This tax year, 2026/27, is the last year you can put up to £20,000 into your Cash ISA allowance if you’re 65 or under. From the 2027/28 tax year onwards, you’ll only be able to put £12,000 into a Cash ISA, and the rest of your allowance will be exclusively for investments, so you might want to prioritise filling your Online Cash ISA this year to make the most of the allowance this year.
Fixed Rate ISA
With a Fixed Rate ISA, you can put your savings away for a higher, fixed rate of return. This is a good option if you want to set money aside for two years’ time, but you shouldn’t put in any money you might need during this period, as you won’t be able to access it. You have 60 days to deposit or transfer money into your account once it’s opened, so you won’t be able to add to it regularly. This is best for a chunk of money you want to set aside for a longer-term goal, such as a large trip or a house deposit.
Stocks and Shares ISA
If you’re interested in investing, you can do so in Stocks and Shares ISA. This means you won’t pay any capital gains or income tax on your returns. You can deposit a lump sum of £250 or more, or pay as little as £25 a month. Investing regularly can potentially smooth out ups and downs in the market, and it removes the need for predicting when is a “good time” to invest. You also benefit from compounding over time, because the earlier and more consistently you invest, the more time your money has to potentially grow. Remember, your money is at risk when you invest, and past performance is not a guarantee of future returns.
When you choose a Triodos Stocks and Shares ISA, you can also pick from four different investment funds. It’s up to you how you spread your money across them, but you can select them based on what you’re interested most in supporting. You can find out more about the different impact funds here.
Other savings accounts:
If you’ve used up your ISA allowance, you can also make use of other savings accounts, such as a Triodos Online Saver. You’ll get instant access, with no notice or limits on withdrawals. This is ideal for saving for things such as gifts.
The Triodos Online Saver Plus is also instant access, but with three penalty-free withdrawals a year. Your interest rate will go down if you withdraw more than this, so this kind of account may be better suited to savings for something like travel or a holiday season, when you know you’ll be making a withdrawal at certain times in the year.
Triodos Ethical Savings Bonds allows you to save from £500 and put your savings away for one year, for a fixed rate of return. You must deposit all your money when you open your account, and you cannot add or withdraw any money after this until your fixed term ends.
Banking you can feel good about
With Triodos Bank, you can focus on managing your money, your savings and your future, without the added worry of how your funds are being used behind the scenes. By choosing a bank that prioritises transparency, sustainability and social responsibility, you can feel confident that your money is supporting positive change, rather than harmful sectors such as the fossil fuels industry. You don’t have to second guess your financial impact, because you can be assured that your banking choices align with your values, while you concentrate on building financial stability and security.
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