Sarah Pennells' top money tips for 2026
Royal London's Consumer Finance Specialist Sarah Pennells' four top money tips to make your money work harder in 2026.
Household budgets are under increasing pressure – so it’s more important than ever to plan ahead. Here are some key areas to focus on this year.
1. Maximising your ISA allowance, and planning for changes
Individual Savings Accounts (ISAs) remain one of the most popular ways for UK adults to save and invest – but research suggests that we could be getting more out of them.
According to Royal London’s ISA Landscape Report, only 16% of ISA holders use their full £20,000 annual allowance. The Cash ISA annual limit is set to fall from £20,000 to £12,000 in April 2027 – so, if you are in a position to, it’s worth increasing your ISA contributions before the change, to make the most of the current allowance if you can.
Stocks and Shares ISAs offer the potential for higher returns over the long term. Our data shows that over a 10-year period, Stocks and Shares ISAs have significantly outperformed Cash ISAs. For example, an initial investment of £1,000 in a Stocks and Shares ISA would have grown to over £3,000 in ten years, compared to just over £1,100 in a Cash ISA.
However, many consumers remain confused about how ISAs work, especially regarding tax treatment and investment risk. Seeking advice from a financial adviser or using trusted online resources can help you to make informed choices.
2. Tackling debt: credit cards and beyond
With interest rates fluctuating and the cost of living rising, credit card debt can quickly become overwhelming. Start by listing all your debts and prioritising those with the highest interest rates. Consider transferring balances to lower-rate cards or consolidating debts if it reduces your overall payments.
Set a realistic repayment plan and avoid taking on new debt unless absolutely necessary. If you’re struggling, reach out to free debt advice services; many organisations offer confidential support and can help you negotiate with creditors.
3. Building financial resilience: start saving today
Royal London’s financial resilience research reveals a worrying statistic: one in five UK adults has less than £100 in savings. This lack of a financial safety net leaves many vulnerable to unexpected expenses, such as car repairs or household emergencies.
If you’re starting from scratch, open a simple savings account or Cash ISA and set up a regular transfer. Even £10 or £20 a month can make a difference.
Automating your savings helps build the habit and ensures you’re consistently putting money aside. It is advisable to build up at least three months’ worth of essential expenses as an emergency fund.
4. Seek support and stay informed
Financial confidence and knowledge are key to making good decisions. Royal London’s ISA Landscape Report found that only 40% of adults feel confident about investing, and many are unsure about where to start. Don’t hesitate to seek advice from professionals or use reputable websites such as MoneyHelper. From April 2026, financial providers will start offering Targeted Support, which is a limited form of advice, designed to address the so-called ‘advice gap’. Our own modelling shows that 21.5m people could benefit from this.
