Where to find returns in 2026
This is a financial promotion and is intended to provide information, not investment advice.
The start of a new year marks a good opportunity to review your investment strategy and make sure your money is working hard.
The kind of returns you get depend on whether you’re a saver or an investor. Either way you may be wondering where to find the best returns in 2026 and where the key opportunities for growth lie.
Tax-free growth
The first port of call should be to use your ISA, an important shelter for your money, where interest and investment returns are tax-free. Current rules allow individuals to place up to £20,000 per tax year across the menu of ISA accounts which includes cash, stocks and shares, and innovative finance ISAs (IFISAs).
Those savers who prefer not to invest in the stock market and to keep their money in cash will soon see their options limited, however.
In the Autumn Budget, Chancellor Rachel Reeves announced reforms to the ISA regime including a cap on the amount savers can shelter in a cash ISA. From April 2027 the new limit will be £12,000, down from £20,000.
The annual ISA allowance of £20,000 will remain but should you wish to utilise the rest of this valuable tax-free shelter, the remaining £8,000 must be invested in a stocks and shares ISA or an IFISA.
For basic-rate taxpayers, the impact of losing the ability to use the full annual allowance of £20,000 may be modest, but higher and additional-rate taxpayers could face significant extra tax on savings above the new cap.
The reduced limit means cash savers will need to think more carefully about how they structure their savings in a tax-efficient way.
Savings rates – watch them fall
UK interest rates are on a downward path, and as a result savers have suffered lower rates of return on their money. There were four cuts to the Bank of England base rate in 2025 and there could be more to follow in 2026.
Economists predict there could be two more base rate cuts in the next 12 months.
This will further lower returns on cash deposits and makes cash less attractive compared to other kinds of investments such as peer-to-peer and the stock market.
Inflation is still higher than the Bank of England target of 2% and on average inflation has outpaced the average savings account this year .
Since it is likely to remain that way for the time being, it’s important to ensure the value of your savings doesn’t get eroded by inflation.
Investors undecided about AI bubble
Investors have seen excellent returns over the past 12 months after an extraordinary run in stock markets.
Tech and AI growth has dominated markets, with concerns over an AI bubble mounting – or bursting - as we look to the new year.
As always, every investor is reminded to diversify between regions and asset classes which include alternatives such as property. Should any such bubble burst, those investors well diversified will limit their losses.
Peer to peer investing
For savers who want to grow their money without investing in the stock market – but want better returns than cash, a peer-to-peer investment through an IFISA could be worth exploring.
Peer to peer is an alternative finance which connects individual borrowers with individual investors. As an investor you get a regular interest payment and then your money back once the loan is repaid.
The easyMoney peer to peer lending platform matches carefully selected property professionals looking for short-term mortgages with investors seeking a better return on their money.
Interest rates of between 5.4 and 7.7% are currently available.
easyMoney’s CEO Jason Ferrando said: “There are plenty of reasons to be optimistic about 2026.
“Savers have to be comfortable with getting less-than inflation-busting returns. But there are alternatives to consider when looking for ways to get your money working harder.
“We offer returns between 5.4 – 7.7% for our retail clients and up to 10% for our professional clients, and in a year when the Bank of England cut the base rate four times, we haven’t cut rates paid to our investors.
“The property market is well positioned for growth in 2026 which is comforting news for our investors - and borrowers.
“We have a proven track record of performance over almost a decade and we are proud to say that no investor has ever lost a penny of their capital by investing with us.”
*Capital is at risk. Past performance is no guarantee for future results.
Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future.