New Year is the perfect time to review your financial health as well as your personal health

David Haughton
Financial Planning

The new year is the perfect time to spring clean your finances, says David Haughton of Lovewell Blake Financial Planning.

Whether it’s a promise to lose weight, a pledge to cut down on drinking, or a commitment to do more exercise, many New Year’s resolutions are related to health – and that’s a very sensible approach. 

But if those good intentions help you live longer, then you will need to ensure that your finances will be in a position to sustain that healthier lifestyle, so this is a good time to make some resolutions about your financial health, too. 

January is an excellent time to take stock of where you are, coming as it does at a time when most of us are looking forward, and also a couple of months before the end of the tax year, giving us all the chance to make sure we are maximising our allowances before they expire. 

Whether you use an Excel spreadsheet or an old school pen-and-paper approach, now is the time to sit down and assess where your money is, what it is doing, and whether it will meet your needs, whatever the timescale. 

Timescale is an important consideration.  We all need to think about what our long-term (i.e. five years and beyond) needs and aspirations are, but also whether we will need money to meet planned expenses in the medium-term, and unexpected emergency costs in the short-term.  The best-planned finances take into account all three of these time horizons. 

A good place to start is with your pension, which for many people will be the single largest pool of money they have.  Actually, that will more likely be ‘pools’, because many people have amassed more than one pension as they move through various employments (it will be interesting to see whether the measure announced in Jeremy Hunt’s autumn statement enabling new employees to insist that employers contribute to their existing pension rather than open a new one for each employment will change this). 

Understanding what you have is the place to start, especially if you haven’t reviewed your pension(s) for a while.  You will need to dig out your most recent pension statements – you should receive one of these from each pension at least annually.  If you think you may have lost track of a pension, you can use the government’s online tool to check, at

If you set your pension up some time ago, you may want to review whether the mix of funds is still appropriate, given how much the economic landscape has changed over recent years.

Another thing to check is whether the death benefit nomination is up-to-date – you would be surprised how many pensions have the nominee as someone who is either no longer in the person’s life (such as an ex-spouse), or who has passed away. 

It is not just pensions which could be due a spring clean.  If you manage your investment portfolio yourself, you may benefit from taking an overview of whether your investments are still on track to meet your needs and aspirations, and whether they are invested appropriately in the light of the changing economic and political environment.  If your portfolio is managed on your behalf, it is still worth asking these same questions of your adviser. 

Finally, take this opportunity to take a look at your insurance products to make sure they are still giving you the cover you need.  For example, will income protection products taken out some time ago (perhaps when your income was smaller) still provide for you if you find yourself in a position where you cannot work? 

Far fewer employers offer meaningful sickness benefit today than ten years ago, so should you be considering some kind of cover in case you are ill and lose your income for a period?  And does your life cover take into account your changing family circumstances – if you have started a family, for instance? 

It is entirely possible that such a review of your financial position will reveal that you are in a good place, and don’t need to do anything – in which case congratulations, but it’s good to know.  More likely is that you will need to make some tweaks or even some more fundamental changes to ensure that your financial plans are fit for purpose. 

Either way, you are unlikely to regret resolving to spring clean your finances alongside committing to a healthier lifestyle.

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