New Year Financial Resolutions

Whilst our clients benefit from our holistic financial advice, I am often asked for a convenient financial check-list, sometimes to pass on to friends or wider family. Accordingly, this is my top-10 of New Year Financial Resolutions:

  1. Goal setting: Define what you want and make a financial plan. This should cover both savings and the repayment of any debt. The plan should incorporate an achievable savings plan to support financial security in retirement, as well as contingencies, such as the financial impact on the family of potential illness, nursing care and death (‘what-if’ scenarios). Review annually.
  2. Budget: A budget should ensure that income can support current expenditure, as well as ensuring an appropriate balance between both current and potential future standard of living.
  3. Review investments and pensions: What are they worth? How are they performing? Is there a benchmark? Are they adequately diversified and do they remain appropriate for your risk tolerance? What are the charges? Could they be simplified to streamline administration?
  4. Do not believe pundits’ predictions: Nobody has a crystal ball, as was evidenced by incorrect predictions concerning the Brexit referendum, US and UK elections. In addition, it is very difficult to predict the timing of important political or economic events and how the market will react. My advice is to invest for the medium-term with a disciplined structured approach and stick to it.
  5. Save tax: Make the most of tax allowances, reliefs and exemptions, as well as tax-free ISAs, pensions and where appropriate more specialist savings vehicles, such as EIS, VCT, SITR.
  6. Manage cash savings: set aside enough cash to cover potential emergencies, but don’t hoard cash. Interest rates remain low and lower than inflation, so cash should be put to work.
  7. Will and Lasting Power of Attorney (LPA): Write a will and keep it updated to ensure your estate ultimately passes in accordance with your wishes. An LPA is desirable to ensure that your financial affairs and healthcare decisions can be looked after on your behalf in the event of incapacity.
  8. Inter-generational planning: Passing wealth down to children or other family members can be complex. Decisions need to take account of when and how much and to whom to pass income or capital in a tax-efficient manner. This can involve lifetime gifts, provisions in a will, as well as the potential creation of a trust or family company.
  9. Consider re-mortgage: Whilst interest rates remain low and it may take time for rates to rise significantly, where appropriate review a mortgage and consider a fixed rate.
  10. Charity: Many clients choose to donate to charities, either during their lifetime or on death. A philanthropy strategy can be dove-tailed with tax planning, making use of Gift Aid or Social Investment Tax Relief (SITR).

Please note, this article is for information only and does not constitute investment or tax advice. Past performance is not necessarily an indication of future returns; the value of investments and any income from them is not guaranteed and can fall as well as rise; pension rules and tax legislation are subject to change. If you would like investment or pension advice on your individual circumstances, please do not hesitate to get in touch on 01392 875500 or

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