Ndubuisi 'Andy' Egwim advises on automating savings via direct debits into a cash ISA (tax-protected savings) and emphasizes the need for a clear financial goal. He recommends building an emergency fund (commonly 3–6 months of expenses) and, once that goal is reached, redirecting ongoing contributions (a rule-of-thumb ~20% of salary) from the cash ISA into a stocks & shares ISA for investing. The guidance distinguishes between tax-protected cash savings and active investing.
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So if you want to set up a direct debit to go from your salary account to the ash isa, it's just going into a savings account, but it's tax protected. So that's all by direct debit. But the mistake most people make is they just continue doing it forever and they keep saying the isa, nothing is happening. The money is not moving. Nothing's happening like it's not going to move. The savings account is just tax protected, right? So that's the first bit. Now when you've hit your goal, that's why you need a clear goal. When you've hit your goal, your emergency fund, whether it's three months worth or six months worth, the next step is investing. So you don't need to continue using the cash. Isa, that 20% of your salary. I tend to say 20% is not gospel, but it's one of the money wise Dr. Rules. It's not as important as the Ten Commandments from Moses, but it's one of our ten rules. 20%, 20, 25%. But at least 20% that was going into clearing up debt. If you have debt or number two savings, if you, you don't have emergency fund, that same 20 now goes into your investing account, which is now your stock and shares. Isa, that's the investing account.
