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Financial Fitness

Get your finances in order for the new year

Get your finances in order for the new year

The new year is a time when most of us make resolutions about our physical health, such as joining a gym or starting a diet.

But what about your financial fitness? It’s important to get the basics right, so here are a few tips from some money experts to help you stay shipshape this year.

With new pensions freedom and the added benefits of tax relief on your contributions, what better way is there to start re-assessing your financial fitness than with your retirement planning?

Laura Newman
Head of Private Clients – Advice at NatWest

Add your signposting title here… Focus on saving into a pension

Pensions offer not only tax-free growth but also tax relief on contributions, and can really boost your saving efforts.

“The start of the year is a great time to review your finances and make sure you’re getting the most from your money,” says Laura Newman, Head of Private Clients – Advice at NatWest. “With new pensions freedom and the added benefits of tax relief on your contributions, what better way is there to start re-assessing your financial fitness than with your retirement planning? Of course, pension rules and jargon can be bewildering even for those who are financially sophisticated, so it makes sense now to focus on your own priorities, review your current strategy and where needed, speak to an expert.”

Some people have a number of pension schemes, and it is important to keep track of them all. Michelle Cracknell, chief executive of the Pensions Advisory Service, adds: “Whether it is a pension that you set up or a workplace scheme, do not lose sight of it when you move jobs or house. If you think you may have lost a pension, the Pensions Advisory Service has a useful Lost Pension tool.

To find out more about pensions visit www.pensionsadvisoryservice.org or www.pensionwise.gov.uk.

Stack of household bills
Add your signposting title here… Take a structured approach

With ISA limits set to increase to £20,000 in the 2017/18 tax year starting on 6th April, Martin Upton, Director of the True Potential Centre for the Public Understanding of Finance, advocates making saving an essential expenditure by setting up a standing order that pays an amount into a savings account every month. “Do this rather than save what’s left at the end of the month because the odds are that by that point you would have spent what you intended to save,” he says.

Structure your household spending into three categories: essentials, non-essentials and ‘essential non-essentials’. “The latter are the things you don’t need to stay housed, healthy and well fed, but are the things you need to make life enjoyable, such as holidays and nights out.”

For more information on how ISAs work see: www.which.co.uk/money.

Whether you want to buy a car in August or a home in October, you should have a financial plan in place

Sam Boothroyd
Founder of online accountants Rymer Associates

Add your signposting title here… Plan, plan, and then plan some more

All good businesses have a carefully planned annual budget, and personal finances should be the same. “Whether you want to buy a car in August or a home in October, you should have a financial plan in place,” says Sam Boothroyd, founder of online accountants Rymer Associates. “It’s as simple as planning your income and expenditure for the year on a simple spreadsheet. Having a solid, visual plan will make it easier to adhere to.”

Visit  www.moneyadviceservice.org, which gives free and impartial money advice on everything from cars and travel, to investing in property.

Try our budget planner

Small changes add up to big savings

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Switching providers of things such as energy, mobile phone or broadband can deliver big savings. Jonquil Lowe, senior lecturer in economics and personal finance at the Open University, says: “Mark on the 2017 calendar the renewal dates for these things and when any fixed-rate fuel deals come to an end. A fortnight before each date, make sure to shop around and switch provider if you can get a better deal.”

Tips for managing your household bills

Keep a check on your online finances

Laptop and notepad on table

Hannah Maundrell, editor in chief of money.co.uk, says: “With so many providers moving to online statements, make a conscious effort to log in and check bills, current account statements and credit card statements in the same way you used to when you found the paper version on your doormat. Keep an eye on your direct debits too; make sure you aren’t being charged for services you no longer use.” 

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Financial Following

If you want to keep your finances on the straight and narrow throughout 2017, it might be worth following some of the top financial experts on social media.

The Money Advice Service was set up by the government to offer free, impartial money advice and regularly tweets interesting financial titbits.

@YourMoneyAdvice

To keep up to date on all the latest pension regulations follow The Pensions Advisory Service.

@TPASnews

Sarah Pennells is the founder of savvywoman.co.uk, a finance website aimed at helping women get more from their money.

@Savvy_Woman

For all the latest news and opinions on financial matters, follow the FT’s personal finance team.

@ftmoney
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