From 1 December 2025, the Financial Services Compensation Scheme (FSCS) guarantee limit for savings is increasing from £85,000 to £120,000 per person, per bank.

The FSCS guarantee for investments is not changing and is remaining at £85,000.

You do not need to do anything to benefit from this change, it will be applied automatically by the FSCS.

We will update our content and materials shortly after 1 December 2025 to reflect the new limits.

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What does this mean for my money held in Chip?

The FSCS guarantee for savings is managed by the Bank of England and FSCS agency directly and they have stated the new limit will be in effect from 1 December 2025.

So, from then on, in the unlikely event that Chip, or our partners (ClearBank for savings and Seccl Custody Ltd.) should fail, you will be covered up to:

• £120,000 of eligible deposits in your savings accounts, and;
• £85,000 of eligible deposits in your investment accounts.

You can read more about how your money is protected at Chip here: https://getchip.uk/how-we-protect-your-money

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Your savings accounts

Four of Chip’s savings accounts are provided by our partner bank, ClearBank.

This means your FSCS cover across all savings you hold in Chip is £120,000 in total across all accounts from 1 December 2025. Please note, FSCS cover applies per person, per bank, so if you hold other accounts powered by ClearBank outside of Chip, your cover will also be shared across them.

You can hold larger deposits than the FSCS protection cover amount. Chip savings accounts balance limits are currently:

• Chip Cash ISA: unlimited, but new deposits capped at £20,000 per tax year depending on your individual circumstances and subject to change in the future
• Instant Access Account: £1 million
• Easy Access Account: £1 million
• Prize Savings Account: £85,000

You can read more about how ClearBank protects your money here. Please note that the Chip Cash ISA isn't available for new customers.

For the Smart Cash ISA: Money deposited into the Smart Cash ISA is held across established UK licensed banks, such as Barclays, Lloyds and HSBC and is eligible for cover by the Financial Services Compensation Scheme (FSCS), subject to FSCS conditions.FSCS limits of £120,000 per person, per bank apply, subject to eligibility. As funds may be held across multiple UK licensed banks, protection applies separately to deposits held with each bank.

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Your Chip investment accounts

The money in Chip investment accounts sits with a different firm (Seccl Custody Ltd.) than our savings accounts, so you enjoy separate FSCS cover for this money.

Your FSCS cover for investments is unchanged by this news and remains up to £85,000 of eligible deposits across all your investment accounts in Chip, so if you have both a Stocks & Shares ISA, and a General Investment Account (GIA) open, your cover is spread across both of those accounts.

As with savings, FSCS cover for investments applies per person, per institution, so if you hold investment accounts with Seccl Custody Ltd. outside of Chip, your total cover of £85,000 will also be spread across those.

You can hold more than the FSCS protection limit in Chip investment accounts. The total balance limits per account are currently:

• Stocks & Shares ISA: unlimited, but new deposits capped at £20,000 per tax year depending on your individual circumstances and subject to change in the future
• General Investment Account (GIA): unlimited

Remember, FSCS doesn’t cover you for investment performance, or in the event that your investments go down and you get back less than you put in.

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The savings FSCS limit increase comes into effect on 1 December 2025

The new £120,000 FSCS limit comes into effect on 1 December 2025.

You don’t need to do anything to benefit from this change, it will automatically be applied by the FSCS.

The Bank of England has set financial firms a deadline of May 2026 to update all their content, marketing materials and disclaimers to reflect the new limit.

However, we aim to update all of our content across our app, website, documents and automated emails as close as possible to 1 December 2025.

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The details

On midnight 18 November 2025 the Prudential Regulation Authority (PRA) from the Bank of England (BoE) announced the FSCS limit will increase from £85,000 to £120,000 from 1 December 2025.

The PRA is responsible for oversight of FSCS protection in respect of deposits for banks.

The PRA does not govern FSCS limits for investment accounts, which are determined by the FCA and there have been no announcements from the FCA about increasing the limits for investments.  

If this changes, we will also update you.

You may have seen Chip’s Prize Savings Account featured on BBC Morning Live and how it stacked up against some big names in Prize Draw Accounts. For those of you who don’t know, it’s our easy-access account with a free monthly prize draw, you can get started with £100 which will earn you 10 entries.

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Your savings could earn you tax-free cash prizes every single month. It’s a fun way to grow your money while having the chance to win up to £50,000!

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How Does It Work?

• Save money — Every £10 in your account = 1 prize draw entry (minimum average balance of £100 required)
• Automatic entry —  The more you save, the better your chances‍
• Win tax-free cash — No tax, no fees, just free money!

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What Can You Win?

• A share of £75,000 in prizes
  
• £10,000 grand prize every month
  
• +6,500  winners of £10 every month

Please note prize pools can change.

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Why It’s a Game-Changer

• Tax-free winnings — Keep 100% of your prize money
• No fees — It’s free to enter and we don’t take any fees‍
• Instant access — Withdraw your cash at any time

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The next grand-prize winner could be you!

If you love the idea of saving with a chance to win big, this account is a no-brainer. It’s perfect for anyone who wants an exciting, effortless way to grow their money.

You can learn more about the Chip Prize Savings account here.

So, download the Chip app and deposit to get started today. Good luck!

As one of Europe’s most crowdfunded businesses, we have 28,000 people (largely Chip customers) who shape what we build and the direction of the business.

This customer focused community has been our secret to success and played a huge role in our growth so far, seeing us named in 2025 as the 6th fastest growing company in the UK by the Sunday Times and the 12th fastest growing in Europe by the FT.

In this spirit, I want to share the key themes from the discussion with all Chip customers, to give you all a view on what’s coming in the next year and a chance to share your thoughts on it.

We’ve also pulled together a quick visualisation to give you a glimpse of what all this will look like.

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We want to use AI to bring personalised planning and financial advice to Chip.

The growth of AI in the last two years has opened up an incredible opportunity for Chip to explore building a truly personalised advice and planning service for our customers.

Imagine instead of having to learn your way around the intricacies of personal finance, you could start with a conversation about you.

Discuss your goals and ambitions — where you are now and where you want to get to.

Chip’s AI could then build a personalised plan based on this conversation, suggesting which savings and investments accounts to open, how much to put into a pension vs an ISA, what short and long term goals to set, and recommend an automated plan to effortlessly top up your savings.

You would be able to review the suggestions, easily tweak them to fit your needs in an open discussion and when you’re happy, you simply say “make it so” and Chip’s AI could crack on with the leg work; opening the accounts, initiating deposits, transfers and all the boring admin work done for you.

But you’d still have easy oversight of everything in your app, with simple graphs and portfolio views to track your progress against your goals.

You’d be able to pre-program nudges for yourself and book in regular reviews, and at any time simply discuss with the AI to update the plan for you if your ambitions grow or circumstances change.

While we might be some way off replacing the human touch from an expert wealth advisor at this early stage, we do think there's a lot that can be automated via AI to open up the benefits of financial advice to everyone.

In addition to building the technology, we are exploring the correct permissions and regulated set-up to offer more planning and advice. This is an industry that is very strictly regulated and as you can imagine, there are no shortcuts to getting a fully functioning AI advice service live.

However, the regulator is also increasingly recognising the potential of tech to offer a better outcome to consumers and the FCA has announced reforms to help close the “advice gap”.

In their own words:

“These once-in-a-generation reforms will help people navigate their financial lives and give them greater confidence to invest … There are about 7 million adults in the UK with £10,000 or more in cash savings who may be missing out on the benefits of investing throughout their lives.”

So, we hope these changes could open a quicker path for us to bring you a more personalised service within the next year.

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The first step towards more personalisation

Our first step towards offering more personalisation has been rebuilding our Goals feature from the ground up.

Those of you who have been with us for a while will know that we’ve always offered Goals as a feature to help keep our customers focused on achieving their long term ambitions.

I’m delighted to announce that Goals will very soon fully integrate with all the accounts in Chip and offer a seamless easy experience.

We’ll continue to enhance our Goals feature over the next year, with the intention to eventually tie it into our new AI planning service.

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Coming early next year

To be able to offer you a true wealth management experience, we know we need to offer you pensions.

Self-Invested Personal Pensions, commonly abbreviated to SIPPs, offer powerful tax benefits to people saving for their retirement.

This is the last financial product type missing from our fundamental offering. So, I’m delighted to say this is currently under development and should be ready to launch in the first half of 2026.

In the long term we want to offer the ability to transfer your existing pensions into Chip, so you'll have one easy view of all your wealth.

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All of your ISAs in one place

There have of course been some rumblings from the government about changing cash ISA limits, but they remain one of the most popular tools available to UK savers and our cash ISA is certainly one of the most popular products at Chip.

Whatever happens, we believe that ISAs will remain the cornerstone of the savings and investments accounts we offer.

First, we are going to create a seamless experience between your Chip Cash and Stocks & Shares ISAs.

We want to give you one clear view on your tax allowance across both these accounts, so you can easily see how you are diversifying your portfolio and if you’re taking full advantage of your annual ISA allowance.

Then, we’ll look at adding LISAs and JISAs too, so you can enjoy more ways to tax-efficiently build wealth.

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We're here to make you wealthier. Your way.

Our mission remains the same. We want to make our customers' lives wealthier.

We’ve spent much of the last eight years putting as many tools, products and accounts in the palm of your hands as possible. So you can literally build your wealth at the tap of a button.

But now, we’re presented with a game changing moment to tie it all together with a personalised user experience powered by AI.

Essentially, you’ll have everything you need to build and grow your wealth in a couple of taps across cash, investments, pensions (and eventually even more).

But also, you’ll have a guide that listens to what you want, asks about your goals, and builds a plan around your needs that is personal to you.

I know you’re going to love it and I can’t wait to share it with you.  

Again, if you'd like to take a sneak peek at what the future holds, see our webpage for a preview.

We need to stop supporting Chip on an older version of Apple Operating System (OS), iOS 15. This is due to it no longer being supported by Apple’s security updates.

If your device is on iOS 15, and you don’t / won’t / can’t update to a newer version of iOS, you no longer be able to access your Chip app.

This is most likely to affect you if your phone is around 10 years old, and/or you don’t have automatic iOS updates switched on.

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What this means

This means after 23 July 2025 you won't be able to log in to Chip using a device running iOS 15 unless you update to a newer version of iOS.

If you use an older Apple device (i.e. around 8-10 years old) you may need access to a newer device that supports a  newer version of iOS, as older Apple devices don’t always support the newer operating systems.

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How to find which version of iOS you're on

You can double check this on your phone by navigation Settings > General > About and look for ‘iOS Version'.  

Apple offers a guide to find the software version on your iPhone, iPad or iPod touch.

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How to update

It’s easy to update your phone, simply open your device, go to Settings > General, then tap Software Update.

Apple offers a clear and simple guide here, which also covers how to switch on automatic iOS updates.  

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Why are we doing this?

If you’re confused about the above, here’s a quick explanation.

Your device’s software is powered by an Operating System (OS) called iOS, which is built and maintained by Apple.

Apple regularly releases new versions of iOS to make your phone work better and keep you safe. The latest version is iOS 18.

Apple no longer maintains or releases security updates for iOS 15.

This means we can’t guarantee the security of Chip accounts using our app on devices running iOS 15.

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What if you can't update?

After 23 July 2025 you won't be able to log in to Chip on a device running iOS 15.

You should be able to update your device to a newer version of iOS, but if your phone is 8-10 years old you may need to get access to a newer, supported device.

If this is not possible for you, you may wish to consider withdrawing your money and closing your account before 23 July 2025.

However, if you don’t withdraw, your account will remain open and secure, and you'll be able to access it at any time using a newer device.

Finally, as a Chip customer you can contact us in writing or via email to withdraw your money (note there will be additional security measures and identification you’ll need to provide).

If you have any further questions don’t hesitate to drop into your in-app customer support.

In an ideal world, this isn’t a subject we’d need to feature on our blog. But, the reality is that thousands of people fall victim to financial crime every day.

Scams today are becoming increasingly sophisticated, and in the age of digital money management, it’s more essential than ever to be aware of how criminals act, and what can be done to remain safe online.

At Chip, we want to give you the information you need to stay steps ahead of the criminals, so you can build your wealth securely.

We’ve compiled this guide to help our community fight fraud.

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More than a wealth-building app

We’re here to help you manage your money safely

Although you can’t send money to anyone else directly from the Chip app and you can only withdraw to your own bank account, it could be the case that you end up withdrawing funds to pay someone from your bank for a fraudulent reason.

With this in mind, we want to provide educational resources and tips on recognising and avoiding common tactics used by fraudsters, ensuring you can build your wealth with confidence.

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Some tips to keep you safe

How to be sure about the legitimacy of an email or call

When we get in touch with you to tell you about products, updates or general Chip information, it’ll mainly be via email (secure@getchip.uk, or hello@getchip.uk), in-app messaging, or push notifications. We sometimes send you an SMS, but these will only ever tell you to log onto the app and will never contain any links.

Scammers routinely use email and text messages to pry for personal details or to get you to click a malicious link, and will often try to impersonate financial institutions (such as your bank, or Chip), or people in your contacts list.

Here are some of the key things to be on the lookout for:

• Suspicious email addresses: Scammers often use email addresses that mimic legitimate organisations, but may contain variations or misspellings. Always check who the sender is, that the domain matches the company website in any links (getchip.uk).

• Urgent or threatening language: If an email contains language designed to pressure you into making a decision, it’s most likely from a scammer. Fraudsters often try to create a sense of urgency.

• Requests for personal information: Chip will only ever ask for personal information for a purpose such as verifying your identity, or confirming the information we hold about you.

• ‍Requests for passwords or sensitive account information: This is a big red flag. Avoid any requests that ask you to send sensitive personal account information such as passwords, PINs, one time passwords, mother’s maiden name (etc...). Chip will never ask for this information outside of your app.

• ‍Requests for your full card details: Scammers want your full card details, including expiry dates, and your three-digit CVC number. To be clear, Chip will never ask for your debit or credit card information outside of your Chip app.

• ‍Requests for payment: Be extra wary of emails that request money or payments for goods, services, or fees. Again, Chip would never ask you to complete any transactions outside of your app.

• Poor spelling: Many scam emails contain spelling and grammar mistakes, unusual phrasing, or awkward language.

• Unsolicited attachments/links: Be very wary of emails from unknown/suspicious email addresses that contain attachments or links. They could contain malware/viruses, or link you directly to phishing websites. Check the URL to see if it’s a genuine request from Chip.

• Requests for remote access: Another common email scam asks you for remote access to your computer or mobile device, and will often claim to be from tech support or a company’s customer service team. Chip will never request remote access. We will never ask you to download an additional app or software.

If you’re unsure if an email, call, app push notification, SMS (or any form of contact) is from Chip, you should always double check with our support team using your secure in-app chat, or email us directly using hello@getchip.uk.

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Phone calls

We may, on rare occasions, contact you over the phone for urgent requests.

We will need to verify your identity using information we already hold on you, but we will never ask for sensitive account information like full card numbers, PINs, passwords.

Additionally, we won’t request immediate payment or threaten legal action over the phone.

If you’re ever unsure about whether the call is really coming from Chip, hang up and contact us via email or via our app to confirm if the call is genuine.

Common characteristics of fraudulent calls include:

• Pressure to act quickly: Fraudsters will often try to create a sense of urgency to pressure you into making decisions without thinking it through.
  
• Requests for sensitive personal information: If the caller asks for sensitive personal information, such as bank account details, passwords, PINs.
  
• Fee requests: Fraudulent callers sometimes demand upfront payment for services, taxes, or fees.
  
• Inconsistencies: One of the easiest ways to spot fraudulent activity is by recognising inconsistencies in the caller's story. If something seems off, end the call.

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Protect yourself with biometrics

Keeping your app secure

It's genuinely wise to protect your mobile devices with a password or biometric login. As an additional security layer all Chip users need to create a 6-digit PIN to access their app.

Once you’ve created your PIN, you'll have the option to set up biometric logins using your fingerprint or FaceID for seamless and secure access.

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Take Five to stop fraud

Chip supports the industry fraud awareness campaign ‘Take Five’

‍Take Five offers straightforward and impartial advice to help everyone in the UK protect themselves against financial fraud.

Its goal is to raise awareness and provide advice on how you can protect yourself from scams, emphasising the importance of taking a moment to stop and think before parting with personal information or money.

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We’re here to help

Please reach out to the team if you have any questions or concerns.

If you are ever in doubt about communications from Chip being legitimate, send an email to secure@getchip.uk and our team will confirm whether the request is genuine.

Let’s build wealth, safely and securely, together.

Mia from Chip here (second from left).

January has been a massive month for us, because we crowned our first-ever £250k Grand Prize winner. Her name was Lisa. She cried. I cried. We all cried.

We invited her to a beautiful countryside hotel near her home in Hampshire, where we let her know she was the lucky winner of our December draw. Having been a loyal Chip user since 2018, Lisa grew her balance over time – building up 6,326 entries along the way.  

Her words stuck with me:

“I’m proof real people win.”

And honestly, watching her realise it in that moment was something I’ll never forget.

She told me she’s going to use the money to pay off her mortgage, pay towards her stepdaughter’s wedding, help put her 16-year-old through uni – and even retire early.

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Watch the full reveal video below:

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Lisa’s win was the headline – but she was one of 11,000+ winners in the draw, and nearly 40% of winners had never won before. In fact, 16% of everyone who entered took home a win.

And if you’re feeling a tiny bit jealous of Lisa (we certainly were), then there’s good news: we’re doing it again!

We’ll be announcing another £250,000 Grand Prize winner at the end of our £500k March draw (entries close 31 March 2026). T&Cs, eligibility criteria and minimum average balance of £10 apply.‍

Any entries you earn in our January and February draws also count towards the March £500k one, so keeping money in your Prize Savings Account really does matter.

Lisa was first, but you could be next. Enter here.

Thanks,
Mia from Chip

We want to build something game-changing

We’re working on something exciting at Chip HQ – an AI powered guidance tool designed to give you personalised financial guidance.

Traditionally, financial guidance and advice has been out of reach and expensive. We think that new technology can make financial guidance smarter, faster and most importantly – more accessible to everyone.

In this blog we’ll share with you why we’re building it, what it will mean for your money, and how in the future, this new tool could bring you a level of personalised support that was previously only available to a select few.

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Why we are building an AI guide

One of the most common pieces of feedback we hear is: “I have savings, but I don’t know if I am on the right track to achieve all my plans.”

For over eight years, we’ve been helping people grow their wealth, but we know saving is only the first step. The real challenge is figuring out what comes after.

That’s why we’re building a personalised AI guide: to make financial guidance available to everyone.

With the game-changing power of AI, we would be able to help our customers not just save, but help them achieve their ambitions and goals too.

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The vision: what our AI will do

The concept is to start with an AI guide to help you understand your goals and how you can achieve them faster.

Our ambition will be to evolve it into a powerful tool that can build a personalised guide to plan your entire wealth journey.

However, a quick caveat: there’s no shortcuts to us building this - we’ll need to do a lot of hard work with the regulator to make sure we’re doing this properly and explore the best way to build it (it’s cutting edge stuff!).

But here’s our ultimate vision of where we want to take it.

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Start with a conversation

Imagine this: discuss your goals and ambitions — where you are now and where you want to get to.

Chip’s AI wealth guide would then build a personalised guide based on this conversation, suggesting which savings and investments accounts to open, how much to put into a pension vs an ISA, what short and long term goals to set, and recommend an automated plan to effortlessly top up your savings.

You would be able to review the suggestions, easily tweak them to fit your needs in an open discussion and when you’re happy, you simply say “make it so” and Chip’s AI could crack on with the leg work – opening the accounts, initiating deposits, transfers, with all the admin done for you.

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You’re in control

Let’s be very clear: this wouldn’t be about surrendering control of your money. You would have complete authority and full visibility in the app, with clear graphs, portfolio views, and progress trackers to keep you on top of your goals.

You’d be able to pre-program nudges for yourself and book in regular reviews, and at any time simply discuss with the AI to update the plan for you if your ambitions grow or circumstances change.

We believe that this will help you achieve your financial goals with greater simplicity and confidence.

And don’t worry, you’ll always be able to interact with a real person at Chip when you need us.

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How we’re building it

You would interact with the tool through a large language model (LLM) – think of it as your conversational guide, ready to answer questions and help you navigate financial decisions.

Behind the scenes, an intelligence layer will analyse your data to provide personalised, actionable recommendations tailored to your situation.

And of course, we’ll be rigorously testing the AI and putting strong guardrails in place, so everything stays compliant, safe, and focused on delivering the best outcomes for you.

We’ve already applied to join the Financial Conduct Authority’s (FCA) development “sandbox”  which would allow us to test it alongside the FCA. If granted approval, we will have support from the regulator and access to the Nvidia AI Enterprise software suite which will accelerate our ability to build and refine our AI tech stack further.

Our ultimate goal, as we say above, is that our AI wealth guide will be able to connect to your accounts, offering actionable recommendations and taking the heavy lifting off your shoulders – bringing you the sort of service that was previously reserved for the very wealthy.

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The wider context: why we’re doing this

There are big changes coming together in our industry right now:

1. A game-changing new technology

The use of AI has exploded over the past couple of years, since ChatGPT first burst onto the scene in 2023.

We believe we can be at the cutting edge of this technology in our sector as we’ve seen a huge opportunity to leverage AI to disrupt the financial advice sector and bring advice to everyone.  

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2. Once in a generation reforms

Adding to the mix, the Financial Conduct Authority (FCA) has just introduced a “once-in-a-generation”¹ reform to the financial advice industry, allowing firms to offer targeted support to customers, opening up the door for innovation here at Chip.

The FCA’s research shows the gap we can close:

• 24% of people with over £10,000 in cash savings don’t invest because “they don’t know enough”
• 12% feel overwhelmed by the number of options
• 8% say they need more support before investing

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3. A legacy industry ripe for disruption

We think the legacy advice providers and currently available wealth services leave a lot of room for improvement.

We’re not alone - you might have heard the term ‘advice gap’ where people who could benefit from advice are not being served by the currently available services.

These services are seen as exclusive, only open to the very wealthy and expensive - typically costing anything between £500 and £5,000+ a year.

Or to quote the 2025 Advice Gap report:

“It seems there are a significant number of people who need advice and would benefit from it, whether that’s financially or from the peace of mind that advice brings.

“But they can’t access it because it either costs too much, or the services they need are just not profitable at those levels for companies. Finding a solution would not only help those people but open up a huge untapped client list.”

Whilst we don’t believe AI can fully replace the world of face-to-face human consultations at the moment, it’s clear that this legacy advice model can’t provide service at scale, and stops many millions of people who could benefit from the advice seeking it out.

We believe we are very well placed to build an AI that can fill this gap in the market – delivering real value to Chip customers while opening the door for millions of people across the UK who want financial guidance, but are currently under-served.

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Where this will take us

We’ve spent much of the last eight years putting as many tools, products and accounts in the palm of your hands as possible, so you can build your wealth at the tap of a button.

But now, we’re presented with a game changing moment to tie it all together with a personalised user experience powered by AI.

Essentially, you’ll have everything you need to build and grow your wealth in a couple of taps across cash, investments, pensions (and eventually even more).

But also, you’ll have a guide that listens to what you want, asks about your goals, and builds a plan around your needs that is personal to you.

There’s many people who are ready for better guidance and as one the UK's fastest growing companies, we are built to move quickly and capture a share of this £2.4 trillion² financial advisory market.

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Please note it will not have direct control over your finances and all of Chip’s AI solutions will operate exclusively inside our own infrastructure.  This will be an optional in-app service.

Source:

1 Financial Conduct Authority

2 St. James's Place

From April 2027, the allowance for saving into cash ISAs will be cut from £20,000 to £12,000

Chancellor Rachel Reeves has delivered the Autumn Budget, setting out the government's financial roadmap for the coming years. After weeks of intense speculation, and some notable late-stage changes to the Treasury’s plans, we now have clarity on changes to the tax and savings landscape.

Here is a summary of the key announcements and what they could mean for your money.

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ISA allowances shift for cash savings — use it or lose it!

In a significant move for savers, the structure of the Individual Savings Account (ISA) allowance is changing from April 2027.  

The total annual limit for saving and investing, with either a Smart Cash ISA or Stocks & Shares ISA, is £20,000 across all accounts, and savers are permitted to open different ISAs of the same type across different providers, provided they remain within the allowance limit.

However, following Rachel Reeves announcement on Wednesday, savers will only be permitted to save £12,000 of their total annual allowance within Cash ISA products — a move the Chancellor hopes will encourage greater use of Stocks & Shares ISAs.

The Treasury has indicated this policy is designed to shift the UK’s savings culture, and encourage savers with solid cash savings to consider investing as a way of getting the most out of their money long-term.

Big piles of cash savings generally lose value to inflation over time, and investing can hold the keys to really growing that money. The Chancellor said in her speech “investing £1,000 a year in an average stocks and shares ISA every year since 1999 would have delivered a £50,000 better return than if it was invested in a cash ISA.”¹

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Income tax stays put, but thresholds frozen until 2030

Following intense debate over potential rises to Income Tax, the Chancellor confirms that the rates for basic, higher, and additional taxpayers will remain unchanged.

However, to raise further potential revenue of £7.5 billion, the freeze on Income Tax has been extended for a further two years until April 2030² — this determines how much you can earn before paying tax (currently £12,570) or entering the 40% tax bracket (£50,270).

This means that while real income tax rates aren’t changing, the effect of ‘fiscal drag’ means that as wages rise with inflation over the next five years, a larger proportion of earnings will likely fall into higher tax bands.

This effectively increases tax contributions of earners without moving the tax bands.

Tax beyond Personal Savings Allowance to increase from April 2027

The rules on rates of tax outside the Personal Savings Allowance are changing from April 2027 with a 2% increase to tax on savings interest outside of ISAs. The increases that apply to your tax band are as follows. Basic (20% to 22%), higher rate (40% to 42%) and additional bands (45% to 47%).

The tax on dividends outside of your £500 allowance will also increase by 2% from April 2027 for each tax band respectively.

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Changes to pension salary sacrifice

The rules for sacrificing a portion of your pre-tax salary to make additional pension contributions are being tightened. Under current rules, employees can opt in to sacrifice a portion of their gross pay to additional workplace contributions as an employee benefit.

This is a more tax-efficient way to pay more into your pension, as the amount comes from your salary before tax and national insurance are taken, meaning it costs you less to make a contribution.  

New restrictions coming into effect in April 2029, will limit the amount of national insurance exempt earnings that can be exchanged for pension contributions to £2,000 a year.

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Pension tax-free lump sum is safe

Providing certainty for those approaching retirement, the Chancellor confirmed that the 25% tax-free pension lump sum will remain as it is, with the current cap (£268,275) unchanged. This ends recent speculation about potential reductions to tax-free withdrawals.

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Things to think about‍

Make use of your cash ISA allowances: If you plan to save more than £12,000 into your Cash ISA, tax year ending 5 April 2027 will be the last year you can do it before the allowance is lowered.

With a 2% increase in tax outside of your personal savings allowance also announced, ISAs are as important as ever.

Keep an eye out for pension changes: If you make additional contributions to your pension through your employer's salary sacrifice scheme, keep your eyes open for any communications regarding changes to your scheme.

The importance of making your money work harder: The Budget is a reminder that factors like fiscal drag may squeeze your take-home pay. Keeping a solid cash buffer is important, but growing your money through investing can be an effective way to stay ahead over the long term.

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Get the most out of your £20k

At Chip, our Smart Cash ISA and Stocks & Shares ISA can help you take full advantage of your tax-free allowance.

Whether you’re looking to make the most of the £20,000 cash allowance before the 2027/2028 Tax Year rolls in, or take your money further with investing, we’ve got you covered — all in one place.

Chip does not provide tax or financial advice. Tax treatment depends on individual circumstances and may be subject to change in the future.

Right now we’re also letting new investors benefit from 0% platform fees* until 31 January 2027. Eligibility & T&Cs apply. Promotion ends 8 January 2026.

¹Budget 2025

²The Guardian

*Fund management fees apply

Seccl Custody Limited is the ISA Manager for the Chip Stocks and Shares ISA. ISA limits apply. Invest £20k per tax year.

The Smart Cash ISA is provided by Chip Financial (Investments) Ltd. ISA limits apply, deposit up to £20k this tax year. Terms apply.

ISAs are the most popular savings product in the UK, but they aren’t always the easiest to understand if you aren’t familiar with the ins and outs.

Some Cash ISAs are flexible. That means if you take money out, you can put it back in again within the same tax year, without using up any of your annual £20,000 ISA allowance.

But your ‘replaceable ISA allowance’ goes beyond that. ‍

‍This is the extra "capacity" created when you withdraw money from a previous tax year. Instead of losing that tax-free space forever, you get a temporary window to put that exact amount back in without it counting as a new contribution.

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The previous tax year rules

If you have a large balance built up over several years, a Flexible ISA allows you to treat that "old" money with the same freedom as your current £20,000 allowance.

You can withdraw "old" money: Let’s say you have £50,000 from previous years, you can withdraw any amount of it, e.g. £30,000, and your "replaceable allowance" for the year effectively becomes £50,000 (£20,000 current limit + £30,000 old money).

‍The "same account" restriction: While you can pay current year replacements into different ISAs, you must pay previous year replacements back into the exact same account they were taken from.

‍The "use it or lose it" deadline: Regardless of how old the money was, the "flexible window" always slams shut on 5 April. If you withdraw £30,000 of old money in August 2025, you have until midnight on 5 April 2026 to replace it. If you miss that date, that £30,000 of "tax-free capacity" is gone forever.

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How the flexible money goes back in (the order)

HMRC has a "filling up" order for when you pay money back into a flexible ISA so you always know how its affecting you

1. Replenish previous years first: Your deposits first "fill back up" any money you took out from previous years.
   
2. Replenish current year next: Once old money is replaced, your deposits then cover any current-year withdrawals.
   
3. New subscriptions last: Only after all withdrawals are replaced do your deposits start counting toward your fresh £20,000 annual limit.

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Why it can supercharge your tax-free savings

A replaceable ISA allowance gives you flexibility that many people don't realise they have.

In practice, this means you can pay in more than £20,000 in a single year, as long as part of that amount is replacing money you previously took out.

That flexibility makes your ISA a more adaptable tool for real life. You can use it for short-term needs, like a house deposit, home improvements, or a major life event, and still keep your long-term plans intact.

It can also be particularly useful if you have already used your £20,000 allowance for new money elsewhere and did not realise (or forgot) you still had the option to replace earlier withdrawals.

The key is knowing the allowance is there, and making use of it within the same tax year if it fits your situation.