Author:
Megan Jenkins
Chartered Financial Planner,
Saltus Asset Management Team
Reviewed by: Alex Pugh, Chartered Financial Planner, Saltus Asset Management Team
A fresh start in January is a great time to think about your aspirations and goals. It’s also an opportunity to get your ‘financial house’ in order to help you achieve them. Whilst New Year’s resolutions may feel overwhelming, with many people giving up on goals through the year, there are some simple actions which could make a meaningful difference to your financial wellbeing in 2024.
Revisit your goals
Setting your financial goals is just the first step in creating a successful financial plan. Equally important is reviewing it regularly to ensure you are on track. Financial plans aren’t static and, as your life changes, your needs and desires change, so should your financial plan. Before getting into the detail of “how much do I need to invest?” or “what level of risk should I take?”, take some time to think about what your end goal is and what financial fulfilment looks like to you [1].
Any good financial plan starts with setting your goals and then reviewing them regularly. Now is as good a time as any to take a step back to consider what you really want in life.
Gather your information
With busy lives and changing careers, it is easy to lose track of what you have where. Therefore, it’s unsurprising that 22% of UK investors have lost or unclaimed assets [2], with 1.6 million ‘lost’ workplace pension pots [3].
You may know exactly which pensions and investments you have but paying them an extra bit of attention can go a long way. Ensure you know how much you are contributing, where these are invested and what options are available to you.
Making sure you have full sight of your finances is the perfect financial goal for 2024. Not only will it put your mind at ease that you know what is where, you may also find working out how much you really have surprisingly reassuring.
Review your protection
Life is full of surprises and the past couple of years have taught us that you can never quite predict what is around the corner. Whilst it’s easy to get swept up in your everyday life, with major life events come changes to your financial situation and your need for protection.
Whether you’ve moved house, changed career or started a family (to name a few), these can impact the type or amount of cover that you need or indeed can afford. For most, a major life event happens every couple of years, but how many of us can honestly say we review our protection needs every couple of years [4]? Maybe 2024 is the time to do this.
Make use of your allowances
Every new year presents the perfect opportunity to ensure you are making the most of your tax allowances, and January is a great time to do it ahead of the tax year end rush! Whether you are accumulating for retirement, planning your retirement income, or even managing your estate position, there are beneficial tax allowances that you could be using each year to make your financial plan run smoothly.
Whilst some tax allowances are ‘use it, or lose it’ and reset each year, others can be carried forward, such as the pension annual allowance (with some limitations) and yearly IHT gifting allowance. Making sure you are utilising these in the most efficient way can have a significant impact on achieving your financial goals.
Check your beneficiaries
Life admin tends to be at the bottom of the to do list for many, and checking your wills or beneficiaries on any plans you have may be even more so, but it is incredibly important. When thinking about estate planning, having your will in place and up to date is the first step in this, as it allows you to control how your estate is distributed and ensure no unnecessary IHT is due.
Whilst you are looking at your will, do you have a power of attorney in place? Putting in place a power of attorney can give you peace of mind that, if you no longer have capacity to make decisions yourself, someone you trust can act on your behalf.
It is equally important to check any nominations of beneficiaries you have for any pensions or life policies to ensure that anything is distributed in line with your wishes. You may have set these up some time ago, and your life and circumstances may have changed, so ensuring that these are up to date is an easy thing to tick off the to do list.
Whilst you may not get to all of the above in 2024, these are some easy goals and quick wins that are worth seeing past January to give you more confidence in your financial wellbeing.
Article sources
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All authors have considerable industry expertise and specific knowledge on any given topic. All pieces are reviewed by an additional qualified financial specialist to ensure objectivity and accuracy to the best of our ability. All reviewer’s qualifications are from leading industry bodies. Where possible we use primary sources to support our work. These can include white papers, government sources and data, original reports and interviews or articles from other industry experts. We also reference research from other reputable financial planning and investment management firms where appropriate.