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Making a Financial New Year Resolution

View profile for Richard Eastwood
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The 12 Days of Christmas may have been and gone, but as we start 2017 with New Year resolutions and plans, Financial Adviser Richard Eastwood has 22 good intentions to get your finances in order and reasons why you should:

  • Determine the rate at which you need to save at to meet your long-term needs.

Reason: confidence in the future

  • Assess how much risk you should take and need to take to achieve your goals.

Reason: peace of mind.

  • Couples can combine their objectives together into a single plan in a cost effective and tax efficient way. And ensure that everyone is involved in making decisions.

Reason: peace of mind.

  • Determine how much money you’ll need to retire and when you can retire.

Reason: peace of mind.

  •  Look at old final salary or "frozen" pensions from previous employments.  Transfer values are at all-time highs (bond yields at all-time lows).

Reason: you may be able to retire earlier, take more tax-free cash, increase life cover / flexibility, plan for IHT.

  • After you retire, help figure out how much you can / should take out for living expenses, and keep updating the numbers as your circumstances evolve.

Reason: Potentially prevent you from running out of money.

  • Determine what kinds of insurance you need, how much, and the best way to buy cover at low cost.

Reason: peace of mind and potential savings.

  • Make sure life insurance is written in the right trust.

Reason: benefits are paid quickly to the right people in as tax effective manner as possible – potentially saving tens of thousands of pounds in tax.

  • Put the right asset classes in the right amounts in your portfolio.

Reason: Reducing risk and potentially boosting your returns.

  • Determine how much fixed income investments your portfolio should include, and the best fixed-income funds.

Reason: Potentially tens of thousands of pounds from avoiding losses and losing income in poor performing funds.

  • Determine the most efficient way to divide your investments between tax-exempt, tax-deferred and taxable accounts (ISAs, bonds and GIAs)

Reason: Boost your after-tax returns.

  • Regularly rebalance your assets.

Reason: to help control risk and potentially add to your returns.

  • Select the new generation of low-cost index funds to reduce your expenses.

Reason: Add 0.5% or more per year to your returns.

  • Choose the right ISA for 2017 - don't forget allowances rise to £20,000, making sure you put the most tax efficient assets in your ISA.

Reason: every little extra return helps

  • Select funds and contributions into your employer’s retirement plan.

Reason: potentially tens of thousands of pounds.

  • Harvest tax losses and gains when appropriate and use your CGT allowance, offset gains and losses.

Reason: Potentially tens of thousands of pounds.

  • Manage your estate planning and long term care provision. Make a will. Sort out Powers of Attorney.

Reason: Potentially tens or even hundreds of thousands of pounds in the form of additional benefits to your heirs.

  • Don’t make emotional investment mistakes during inevitable market volatility, both on the upside and the downside.

Reason: Potentially tens of thousands of pounds.

  • Make decisions about charitable giving.

Reason: potentially boosting what the charity receives from your gift.

  • Decide on giving money to your children, grandchildren or others.

Reason: potentially priceless.

  • Set aside money for education for children, grandchildren or others.

Reason: a long term gift that can last for decades, if not the rest of their lives.

  • Help your children get a smart start as investors.

Reason: Assuming they learn well and follow through, this is priceless.

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers LLP or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.