What you should do with your savings depends mainly on how much you have and when you will need it. Under a few thousand pounds, the job is simple: clear expensive debt and build an emergency fund in the best easy access account you can find. As the pot grows, tax, the £120,000 FSCS protection limit and investing for the long term start to matter.
Whatever the amount, money sitting in a current account earning little or nothing is the one option that is almost always wrong. This guide sets out what to do at each stage. For a one-off lump sum such as an inheritance, see our windfall guide.
Before you choose an account: three questions
Answer these first, because they decide where the money should go.
- Do you have debt costing more than your savings earn? Paying off a credit card at 20% or more beats any savings account. Mortgages and student loans are a different question.
- When might you need it? Money for emergencies or the next year or two should be in cash. Money you will not touch for five years or more can be invested.
- Will the interest be taxed? Your Personal Savings Allowance lets you earn £1,000 of interest tax-free as a basic-rate taxpayer, £500 as a higher-rate taxpayer and nothing as an additional-rate taxpayer. Above that, use ISAs.
Savings plan by amount
A quick guide. Your own priorities and timescales may shift these lines.
| Savings | Main priority | Where it usually goes |
|---|---|---|
| Under £1,000 | Starter emergency fund | Easy access savings or regular saver |
| £1,000 to £10,000 | Full emergency fund, short-term goals | Easy access, Cash ISA, Premium Bonds |
| £10,000 to £50,000 | Split cash from long-term money | Cash ISA, fixed-rate bonds, Stocks and Shares ISA |
| £50,000 to £120,000 | Tax and diversification | ISAs, pension, spread across banks |
| Over £120,000 | FSCS protection, advice | Several banking groups, investments, financial adviser |
Under £1,000: build the habit and a buffer
At this stage, the account matters less than the habit. Move the money out of your current account into a separate easy access savings account so it is not spent by accident, and set up a standing order on payday.
Regular saver accounts often pay some of the highest rates for monthly deposits, though they usually cap how much you can pay in. See our guide to regular saver accounts. If you find it hard to keep going, SYM tells you a small amount to put aside each day and tracks your streak.
£1,000 to £10,000: finish your emergency fund
Aim for three to six months of essential spending in easy access cash. Use our emergency fund calculator to set a target, and read how much emergency fund you need.
Once the emergency fund is in place, save for known costs in the next year or two, such as a car, a holiday or a house deposit. A Cash ISA keeps interest tax-free if you are near your Personal Savings Allowance. Premium Bonds are an option for higher-rate taxpayers who want tax-free returns, but prizes are random, so many people win nothing in a given year. The prize fund rate was 4.35% at the time of writing (October 2026).
£10,000 to £50,000: separate short-term and long-term money
This is the point where keeping everything in cash starts to cost you. Split your savings into three pots:
- Emergency fund in easy access cash.
- Money for the next one to five years in fixed-rate bonds or notice accounts, which usually pay more in return for locking money away. See fixed-rate savings bonds.
- Money for five years or more in a Stocks and Shares ISA invested in low-cost, diversified funds. Over long periods, investing has historically beaten cash, but values can fall and you need to be able to wait.
£50,000 and above: tax, protection and pensions
With larger sums, three things need attention.
Tax. Each 1% of interest on £50,000 is £500 a year, so even a basic-rate taxpayer can exceed the £1,000 Personal Savings Allowance. Use your £20,000 ISA allowance every year, and consider a spouse's or partner's allowance too. From 6 April 2027, under-65s can put up to £12,000 a year into cash ISAs within the £20,000 limit.
Protection. The FSCS protects up to £120,000 per person per authorised firm. Some brands share one banking licence, so check before splitting money between them. Temporary high balances, for example from a house sale, are protected up to £1.4 million for six months.
Pensions. If you are still working, extra pension contributions get tax relief at your highest rate, which is hard to beat for retirement money. If your savings are large enough that the decisions feel complicated, paying for regulated financial advice can be worthwhile.
How to find a good rate
Rates change often, so do not rely on any list more than a few weeks old. Bank Rate is 3.75% at the time of writing, and the best savings deals tend to move with expectations about it. Compare current rates on MoneySavingExpert or Which?, check every account is FSCS protected, and set a reminder for when introductory bonuses or fixed terms end. Our hub on high interest savings accounts and Cash ISAs explains how to compare them, and the savings rates calculator shows how much difference a better rate makes.
Frequently asked questions
Common questions about where to put savings in the UK.
Where is the best place to put £10,000 in the UK?
How much savings is protected if a bank fails?
Do I pay tax on my savings interest?
Should I keep savings in cash or invest?
Is it worth keeping money in a current account?
- savings
- where to save
- Cash ISA
- emergency fund
- FSCS