If you made resolutions at the start of January that you’ve already failed, you are in good company – it is estimated that approximately 80% of New Year’s resolutions fail by the first week of February.
However, think of this moment as a sign to focus your attention elsewhere. Now that we are fully settled into 2023, this is the perfect time to undertake a financial ‘spring clean’. These are some of the areas we recommend you take the time to review this spring.
1. Review your insurance and protection policies
Circumstances change, so it is important to regularly make sure that your policies still reflect your needs. You may find that you need to increase your cover, or perhaps even take out a new policy entirely.
At the very least, you may find that you can save yourself a significant chunk of money by shopping around when it comes to your renewals. The same rule applies to household bills, such as energy or phone bills.
2. Update your Will
The same principle applies here. It is vital to review and, if necessary, update your Will on a regular basis to ensure that any changes in your circumstances or wishes are formally accounted for. A handwritten post-it note stuck to the front of your copy will not suffice in the eyes of the law, unfortunately.
A Will is an essential part of your intergenerational planning for cascading your wealth in the years ahead.
3. Check your tax-free allowances
Check if you have made the most of your tax-free allowances, particularly on any ISAs you or your partner may have. Currently, you can pay up to £20,000 per person per year into an ISA and not have to pay any tax on it.
You may have younger family members using Lifetime ISAs (LISA) to save for their first home. These allow them to save up to £4,000 per year tax-free, with the government contributing a 25% bonus on their savings. Check in with them to see if they have made the most of their allowance and, if not, perhaps you could arrange to gift the remaining allowance to them.
4. Shop around for the best interest rate on your savings
As we are all keenly aware, the Bank of England interest rate rose several times in the last year, currently sitting at 4% as of 9th January 2023. While this is worrying in regards to inflation, and bad news for those with loans of any kind, it is a benefit to your savings account.
Many banks have adjusted the interest rates on their savings accounts to reflect the rise. Some have passed on the entire 4%, whereas others have only raised them by a fraction. If the latter applies to you, it may be time to shop around and consider moving your money to an account where it can grow and work as hard for you as possible.
5. Review and update your financial plan
Having a financial planning review at least once a year gives you the space to reflect on where you are, what you want and what’s happened over the last few months. That way, you can make sure your arrangements remain on track to allow you to meet your goals and plan as best you can for what might lie ahead.
That peace of mind is well worth a recurring date in your diary.
We have written before about the importance of the regular review. You can read it here.
As ever, we are only a phone call away if you would like any support with reviewing your financial plan or making changes to your arrangements. You can contact us on 02920 782330 from 9am-5pm from Monday to Thursday, or by email at email@example.com at any time.