The tax year just changed. If you didn't notice the switch from 2019-20 to 2020-21 on 6 April, you've just missed a deadline—but you haven't missed the opportunity.
This is the moment when your ISA allowance resets to £20,000. Your Personal Savings Allowance resets. Your regular savers accounts start fresh. And if you're thinking about bank switching for a bonus, the clock is now ticking on how much you can earn before next April.
Whether you earned nothing last year or maxed out your allowances, the new tax year is a psychological and practical reset. You get a fresh 12 months to build your banking income. Let me walk you through how to make the most of it.
Your £20,000 ISA Allowance: Use It or Lose It
Here's the thing about ISA allowances: they don't roll over. If you didn't use your £20,000 in the 2019-20 tax year, that money is gone forever. You can't claw it back.
But from 6 April 2020 onwards, you have a brand new £20,000 to play with.
An ISA (Individual Savings Account) lets you earn interest completely tax-free. The government is basically saying: "Stick money in an ISA, and we won't tax the interest, no matter how much you earn." This is huge if you're trying to build savings without losing chunks to tax.
There are four types of ISA:
- Cash ISA — Your money sits in a savings account earning interest, tax-free
- Stocks and Shares ISA — Invest in funds, shares, or bonds, tax-free
- Innovative Finance ISA — Peer-to-peer lending, tax-free
- Lifetime ISA — For under-40s saving for a first home or retirement, with government bonuses
Most people reading this should focus on Cash ISAs and Lifetime ISAs. Stocks and Shares ISAs are great if you're comfortable with investment risk.
The key decision: should you open a new ISA or use one you already have?
If you have an existing Cash ISA with a low interest rate (anything under 0.5% is low in 2020), move your money to one of the better-paying ISAs available right now. You can do this via a transfer, and there's no tax hassle—you keep the tax-free status.
Check our live offers page for which banks are currently paying decent ISA rates. With some banks offering 1.5% or higher on Cash ISAs, the difference between a lazy 0.3% and an active 1.5% is hundreds of pounds per year.
The Personal Savings Allowance Just Reset
This one catches people out because it's not as flashy as ISAs, but it matters.
The Personal Savings Allowance lets you earn a certain amount of interest on savings without paying tax, even if it's not in an ISA. The amount depends on your income:
- Basic rate taxpayers (£12,500–£50,000 income): £1,000 allowance
- Higher rate taxpayers (£50,000+): £500 allowance
- Additional rate taxpayers (£125,000+): No allowance
What this means: if you're a basic rate taxpayer, you can earn up to £1,000 in interest from regular savings accounts before you owe tax. That's a "free" £1,000 of interest.
Most people don't think about this because they think "I don't earn that much interest." But if you're being strategic—combining bank switch bonuses, regular saver accounts, and a bit of stoozing—you absolutely can hit that threshold.
And here's the thing: the Personal Savings Allowance and your ISA allowance are separate. You can use both. An ISA lets you earn interest tax-free on £20,000. The Personal Savings Allowance lets you earn interest tax-free on regular accounts. Stack them both, and you're legally avoiding enormous amounts of tax.
Bank Switching Bonuses: Your Fresh Start Year
If you switched banks last year, the new tax year means you might be ready to switch again. Most accounts require a 12-month cooling-off checker period before you can switch away and claim another bonus.
Right now (April 2020), there are solid bonuses available:
- TSB and Nationwide are both offering £1,500 switch bonuses through the switching service
- Santander is offering £1,200
- Virgin Money is offering £1,000
If you're eligible and haven't switched in the past year, this is free money sitting on the table.
Here's the strategy: switch now, keep the money untouched in the account for a few months, then—when you're eligible—switch again to a different bank offering a bonus. With four major banks offering £1,500+ bonuses, you could realistically earn £3,000–£4,500 over the next 12 months from switching alone.
Check our switching guide for the rules and what to watch out for. The main thing: make sure your account meets the eligibility criteria. Most banks require a minimum number of direct debit guides or standing orders, and some have income minimums.
Regular Saver Accounts: The Underrated Income Source
Regular saver accounts are brilliant because banks need you to develop a habit. To encourage you to keep saving regularly, they pay much higher interest rates than you'd get on an instant-access account.
At the start of 2020-21, you can find regular savers paying:
- 5% or higher on regular deposits (usually capped at £500/month)
- Tax-free if you use your ISA allowance, or within your Personal Savings Allowance if you use a regular savings account
The catch: you must save regularly, and you usually can't touch the money without losing interest.
But here's where it becomes a system. If you set up one regular saver with £300/month, that's only £3,600 over a year. At 5% interest, that's around £90 of interest. Doesn't sound like much—until you set up three or four of them at different banks (you can use your £20,000 ISA allowance across multiple ISAs, remember).
Suddenly you're earning £300–£400 a year from money you're saving anyway.
Stoozing: The Year-Long Play
Stoozing is using a 0% credit card to earn interest on the money you put into a savings account. You borrow at 0%, earn interest in a savings account, and pocket the difference. Free money.
But here's the key: the new tax year matters because your 0% periods reset on your credit card limits.
If you took out a 0% credit card in summer 2019, you might be nearing the end of that interest-free period by now. Rather than letting the interest kick in, you can:
- Switch to a different 0% credit card
- Use your new tax year allowances (ISA, Personal Savings Allowance) to maximize the interest you earn
- Plan the withdrawal dates so you've paid off the balance before the interest starts
Here's how stoozing works if you're new to it. The basic idea: borrow on a 0% card (say £5,000), put it in a savings account, let it earn interest for 18 months at whatever rate you can find (right now that might be 1%), then pay the credit card back before the interest kicks in. You've just earned ~£75 for "free."
The difference between a good stoozing year and a mediocre one is planning. Map out when your 0% periods end. Know when you need to switch cards. Understand your interest rates. The new tax year is the perfect time to draw up a 12-month stoozing plan.
Putting It Together: Your Fresh Start Strategy
Here's a practical example. Let's say you're earning £35,000 a year and you want to maximize your earnings from banking in 2020-21.
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Switch your current account. Open a new account at TSB or Nationwide (£1,500 bonus). Start moving your direct debits over. Bonus hits your account after 30 days. ✓ £1,500
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Open a Cash ISA. Put £10,000 into a Cash ISA paying 1.5%. Over a year, that earns you £150 in tax-free interest. ✓ £150
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Open a regular saver. Set up a standing order to feed £300/month into a regular saver paying 5%. Over 12 months, that's £3,600 saved, earning around £90 in interest. ✓ £90
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Stooze with a 0% card. Borrow £3,000 on a 0% credit card, put it in a savings account earning 0.7%, and pay it back before the interest kicks in. One-off earnings: ~£20. ✓ £20
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Use your Personal Savings Allowance. Earn up to £1,000 in interest from non-ISA accounts tax-free. You're already on track with the regular saver and stoozing.
Total from this approach: £1,760 in the first year. Not a fortune, but that's legitimate money you're earning—largely risk-free—just by being organized.
Most people earn £0 from their money because they don't think about it. You now have a plan.
Common Questions
Can I open multiple ISAs in the same tax year? Yes, but there's a catch. You can hold multiple ISAs (Cash, Stocks and Shares, Lifetime, Innovative Finance), but you can only pay into one of each type per tax year. You can move money between them via a transfer without losing the tax-free status, but you can't open a second Cash ISA and pay into both. Choose wisely.
What happens if I miss the ISA deadline? There is no deadline. Your ISA allowance is available every single day of the tax year. The only real deadline was 5 April (last week), which was the end of the previous tax year. Your new allowance is now live until 5 April 2021. You have a full year.
Do I have to use all my ISA allowance? No. You can use £10,000, or £5,000, or nothing. Unused allowance doesn't roll over, but there's no penalty for not using it. Use what makes sense for you.
Will switching banks hurt my credit score? Bank switching triggers a hard credit check, which does show up on your credit file. But switching isn't viewed negatively by lenders. In fact, the dedicated bank switching service includes a guarantee to protect your credit history. If you're planning a mortgage in the next year, space out your switches. Otherwise, don't worry about it.
Can I combine ISAs with stoozing? Absolutely. Put your 0% credit card money into an ISA, and all the interest is tax-free. This is the highest-earning combination you can legally do without investment risk.
The tax year is reset. Your allowances are refreshed. The banks are offering bonuses if you switch. The only question now is: are you going to be intentional about earning from your money, or are you going to let it sit in a 0.01% account for another 12 months?
Head to our offers page to see what's available right now, or use our eligibility checker to find out which banks you qualify for. The fresh start is yours to take.