Less than two weeks into the year reveals a lack of willpower amongst the UK population when it comes to the gym… But what about our savings?
The good thing about that ‘new year feeling’ is that it can encourage you to make changes which will last all year – and beyond.
And just like looking after your health, taking positive steps when it comes to your finances can make a real difference to your future.
New year, new plans
As we move towards the end of 2018, putting some time in your diary to think about what next year could have in store for your finances makes a lot of sense.
Could 2019 be your best ever savings year?
Now is a great time to think about what you want to achieve over the next 12 months and consider your future plans. We talk to four savers about what next year has in store for them and how they plan to make it the best yet.
Small changes – big difference: “I’ve decided to get serious about saving!”
Lauren Tragis works at Standard Life Aberdeen and is still living at home but wants to save up enough to move out. “Turning 24 next year has got me thinking about my spending habits, so in 2019, I’ve decided to get serious about saving!
“I’ll be bringing my lunch to work every day, as I’m spending on average £5 a day. If I succeed in saving £100 a month, I will be £1,200 closer to moving out by the end of 2019.
“I think small changes make a big difference, and the less you feel an impact on your monthly finances, the more likely you are not to touch your savings.”
Time to get excited about tax: Tax-efficient saving and investing – and “sorting out that tax return early”
Tax rarely sounds very exciting but being organised about it can make a real difference to your money. It might not be as exciting as joining a stylish new health club but being tax efficient could make that membership easier to budget for.
Ken Okoroafor, personal finance expert and founder of thehumblepenny.com says: “A great money resolution that also helps you financially is to ensure that all forms of saving and investing are done in tax-efficient accounts.
“This offers you the benefit of using your annual allowances, whilst also giving you the potential to improve the returns on your money due to tax savings from various tax-efficient accounts such as cash ISAs, stocks and shares ISAs, and pensions too.” Bear in mind that stocks and shares ISAs and pensions are investments and can go down as well as up in value, and you could get back less than what has been paid in.
Ken adds: “Another great tip is to ensure that you complete your tax returns early, particularly if you’re self-employed or a higher-rate tax payer. This not only saves you any potential fines – from HM Revenue and Customs – for submitting them late, but it also gives you the opportunity to get any relevant tax rebates early and earn a return from investing that money from the beginning of the tax year rather than from the end.”
Retirement resolutions: “2019 will be the year I sort out a pension”
Taking a look at where you are with your retirement savings could be another 2019 resolution. If you’ve accumulated a few pension pots, have you ever thought about bringing all of them together? This could help you save on fees, and make it easier to check how much you’ve saved – and how your pension investments are performing. Do be aware this isn’t right for everyone and you’d need to make sure you don’t give up any valuable guarantees.
If you’re self-employed, why not make 2019 the year that you make some plans for the future? As Helen Wilson-Beevers, lifestyle blogger at beautystylus.com explains, pensions can be last on the finances ‘to do’ list for those who work for themselves.
“I’m determined that 2019 will be the year I sort out a pension. Being self-employed, it’s so easy to forget about preparing for the future, as you’re constantly living in the here and now of new work commissions. Whether I put a small or large amount away, I’m mindful of how important it is to get a proper pension in place.”
And if you’re wondering what happened to that pension you started years ago? You can easily trace it. Read our article ‘Tracking down a lost pension’ to find out how.
Get some financial planning: “It is very reassuring to know that we are on track”
If you’re closer to the age when you’re starting to think about working less, and how much money you’ve saved, why not make 2019 the year to review your life savings?
Emma Maslin, personal finance blogger at The Money Whisperer says she recently undertook a financial lifestyle planning exercise, which she’d recommend to anyone who wanted to get their retirement plans in place in 2019.
“This involved determining when we would like to retire, looking at the assets which we currently own, what we earn and expect to earn between now and the point at which we wanted to retire, modelling our expenditure over time (thinking about things like mortgage term, private school fees, new cars, holidays etc) and overlaying growth and inflation assumptions.”
“It is very reassuring to know that we are on track to have sufficient funds to be able to retire in our 50s, and have the funds that we will need to enjoy what we want to do in retirement.”
To give you an idea, try our pension calculator to see how much you could have in the future.
Your best year yet
As this year comes to a close, why not make plans for your best savings year yet. With your finances in better shape in 2019, you could get the opportunity to grow your savings and even top up your pension.
Whatever stage you’re at, doing what you can to make the most of your money and build your savings means you’re more likely to be able to live the life you want. A resolution like that could last a lot longer than that gym membership…
Elle Tucker is a freelance journalist writing on behalf of Standard Life.
The information here is based on our understanding in December 2018 and should not be regarded as financial advice. Your own circumstances will have an impact on tax, and tax and legislation may change. A pension and some types of ISA are an investment and their value can go down as well as up and may be worth less than was paid in. The links provided to external sites within this blog are for general information purposes only. Standard Life accepts no responsibility for information contained in these sites or for them being available at all times.