Financial Planning Resources

Review Your Budget

Creating a budget might not sound like festive fun, but it’s a vital exercise for understanding your financial situation. A clear picture of your income and expenditure can:

• Highlight unnecessary expenses, such as forgotten subscriptions.
• Show areas where you can reduce spending.
• Help you set realistic savings or debt repayment goals.

Take some time to list all your income sources and regular outgoings. This could be as simple as reviewing your bank statements or using a budgeting app (or our budgeting tool). The insights you gain might surprise you and can provide a sense of control heading into the new year.

Check Your State Pension and National Insurance (NI) Contributions

Your State Pension will likely form an important part of your retirement income. However, the amount you receive depends on your National Insurance record. To qualify for the full new State Pension, you need at least 35 years of contributions. If you have gaps – perhaps due to career breaks or time spent raising a family – you may be able to address them by making voluntary contributions.

Why is this important now?

• You have until 5 April 2025 to fill gaps dating back to 2006.
• After that, you’ll only be able to address the previous six tax years.

Use the government’s online tool to check your State Pension forecast. If there are gaps, consider whether voluntary contributions are worthwhile for your situation. There are plenty of useful guides online, such as at Money Helper, which can help you decide.

Understand Your Workplace Pension

Workplace pensions often represent the largest retirement savings for many people, yet they’re not always well understood. Here are some key points to consider:

• Investment Strategy: Many workplace pensions default to a standard investment strategy that might not suit your age, goals, or risk tolerance. This is a fund chosen to reflect the needs of a wide range of investors. But the one-size-fits-all approach won’t be right for everyone.
• Lifestyling: Some pensions automatically shift investments into cash or bonds as retirement approaches, which can result in missed growth opportunities. Retirement doesn’t mean you no longer need to be invested. The days of everyone taking an annuity are gone and your money will need to keep working for anything up to 40 years through your retirement phase.

Take the time to review your pension statement. Understand where your money is invested and whether it aligns with your retirement goals. If necessary, seek advice to ensure your pension is working as hard as possible for you. For more information on workplace pensions, read our article here.

Create a Financial Life Pack

Have you thought about how your loved ones would access your financial information if something unexpected happened to you? A “Financial Life Pack” is a comprehensive file that includes:

• Details of your accounts, investments, and financial policies.
• Instructions on accessing online accounts.
• Copies of key documents, such as your will and power of attorney.

This pack can be invaluable for your family during difficult times, helping them navigate your financial affairs with clarity and ease. As part of the process, consider whether your will reflects your current wishes and update it if necessary.

Our podcast “Don’t Leave it Too Late” delves deeper into the importance of communication around finances.

Visualise Your Retirement

One of the most important aspects of financial planning is having a clear vision for your retirement. Ask yourself:

• What does a typical day in retirement look like for you?
• What hobbies or activities do you want to pursue?
• Who do you want to spend your time with?
• How would you like to support your family?
• What legacy would you like to leave for your loved ones?

Having a detailed picture of your retirement goals can make it easier to develop a financial plan that supports them. It also provides motivation to stick to your financial resolutions. If you’re unsure where to start, speaking with a financial planner can help you clarify your vision and take actionable steps towards achieving it.

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The Christmas holidays are a time for reflection and an opportunity to take actions your future self will thank you for. By taking these five steps, you’ll not only improve your financial situation but also create a solid foundation for the future.

If you’d like tailored advice or help with your financial planning, feel free to book a no-obligation call with me here.