As we head into the new financial year, now is the perfect time to start thinking about spring cleaning your finances.
By taking just a few proactive and thoughtful steps, you’ll be able to enter the new tax year feeling organised and optimistic. Read on to discover our top tips.
Make the most of your ISA allowance
If you have an ISA (Individual Savings Account) or are considering opening one, you can pay in £20,000 tax free during each financial year. The tax year runs from the 6th April 2024 until the 5th April 2025 and, as savvy savers should be aware, this is known as ‘ISA season’.
We recently discussed the changes to ISA rules in 2024 which will further shape your savings plan from April onwards. Knowing the details and impact of these new rules can benefit you and family members, including those with Junior ISAs.
Assess your current spending
You can’t make an informed investment for the future, if you’re not 100% sure of how much money is leaving your bank account(s) each month. Thankfully, you can regain control by creating or updating your monthly spending budget this spring.
A great place to start is to refer to bank statements (online or digital) to find payments that you no longer need. For example, unnecessary standing orders or direct debits can be cancelled. Or, you may have outgoings that could be reduced.
The money saved across key areas could be reinvested into a new savings account. We have award winning personal and business savings accounts with competitive interest rates and a range of accounts to suit different needs and circumstances. Any unnecessary spending on items, such as subscriptions and mobile phone contracts, could help boost your savings. You might be surprised at the outgoing expenses you no longer need.
Knowing where you want to be financially next April can really motivate you to prioritise your savings. Many people find it difficult to set aside money for their future, whether that is for retirement, assisting grown up children, buying a holiday home, or maybe getting married. However, you’ll benefit greatly if you set clear financial goals that work for you.
These goals should be realistic and relate to your monthly income and outgoings to be successful. Include short and medium-term goals over the next tax year and anticipate any considerable purchases. These can include planned home renovations, buy to let investments, travel and healthcare plans, along with an emergency fund. Your independent financial advisor should be able to help you develop measurable goals.
You might already be investing in your pension for a more secure future. However, the new financial year is the ideal time to revisit this.
We’d advise you to consider whether increasing your employee contributions is affordable. Your employer may match this amount, meaning you could save more than you think. Also, remember to check how your pension investments are performing.
Financial institutions are great at keeping you up to date on how your accounts and investments are doing, but that can mean a lot of letters throughout the year. If you haven’t already, we would suggest you go paperless and create a digital filing storage. This is kinder to the planet, and won’t clutter up your home or office.
If you prefer something you can physically hold in your hand, have a sort through of all your paperwork and file it away neatly. Statements should be kept for at least a year, however many choose to keep them for seven as this is the time limit set for legal action related to most financial issues.
If you have paperwork that is older than this, please consider safe disposal. A shredder will be your new best friend!
A lot can change in a short space of time, so the start of a new financial year is the perfect time to check all your ducks are in a row and your personal details are up to date. This is especially important if you have done any of the following within the last 12 months:
Spring cleaning your finances can help you reassess and achieve your future goals. And we’re here to help. You can now open a new Cash ISA for this tax year. Visit our Cash ISA savings accounts page to learn more.