8 financial resolutions for 2024
As we enter 2024, a fresh chapter unfolds, bringing new opportunities and challenges. It’s the time of the year when resolutions are made to guide us through the months ahead. Take advantage of this moment to review and update your financial strategies for the year ahead. In this article, we offer updated insights and advice to kickstart your financial resolutions for 2024. Let us navigate the upcoming year together with confidence.
1. Revisit your financial plan
Revisit your financial plan to ensure it continues to align with your current circumstances. Consider if adjustments, whether minor tweaks or significant changes are needed. Given the unique events of the past few years – in both investment markets and many people’s circumstances – it is crucial to examine if your risk profile has shifted or if your income levels have experienced fluctuations.
Reflect on what you aim to achieve in the short, medium and long term, and make any necessary adaptations to position yourself for success in the evolving financial landscape of 2024.
2. Pension health check
2023 saw several changes announced regarding pensions, notably increased annual allowances and the removal of the lifetime allowance. These changes may provide opportunities for some, but also potential pitfalls.
Periodically reviewing your pension is crucial to ensure it is on the right trajectory and poised to generate the income you aim for in retirement. Our expert advisers are available to assess the performance of your current pension, ensuring it is invested appropriately and aligns with your expectations. We can collaborate on enhancing your contribution strategy or adjusting income plans to optimise the benefits of this critical investment.
3. Using tax allowances
With the current government either maintaining or reducing tax allowance levels and exemptions, it is worth taking advice on how best to maximise the allowances in each tax year to avoid unnecessary tax charges. Capital gains and dividend allowances are again reducing from 6th April 2024, while the income tax bands and allowances are being maintained. Tax-efficient savings and investments have never been more important, and updating the structures of your investments now could yield significant improvements over the long term.
4. Review your protection
With continued high levels of inflation, are your existing policies providing adequate protection? As your circumstances change, so do your protection requirements. It may be that additional people now depend on you for your income, your expenditure has increased, or you have started a new business and need protection to ensure it can continue if you were incapacitated.
Higher interest rates may also significantly impact any debts you have, whether personally or within your business. With potentially higher repayments, increased terms and debt higher for longer, reviewing your protection to ensure this is covered in the worst-case scenario is vital.
5. Protect your estate
With an election likely in 2024, estate planning and inheritance tax are likely to be hot topics. Consider whether your Wills are up to date and if they reflect your current wishes. With an up-to-date Will, you will have peace of mind that those precious items will be bequeathed to the right people.
However, will your Will distribute your wealth in the most tax efficient manner? With inheritance tax bands frozen for the foreseeable future, many will suffer potential tax liabilities that were not there previously due to an increase in asset values. Proper estate planning is about achieving the balance between tax efficiency, providing for yourself in retirement, and ensuring your beneficiaries are prepared for any potential inheritance, whether received during your life or through your will.
6. Cash savings
Base interest rates continued their rapid rise in 2023, hitting highs of 5.25%. However, many banks still have not passed these rate rises to their customers, especially with business banking relationships. While we may start seeing rates reducing in 2024, opportunities remain for those wishing to earn interest on deposits.
It is worth reviewing your cash holdings – especially if you have not seen any increases in the last couple of years – and ensuring they are working as hard as possible for you, whether within your business or your personal savings. Our advisers can help you deploy your cash to maximise returns, helping you benefit from increased interest rates while minimising risk and maintaining the flexibility you need for the future.
7. Jumpstart your mortgage planning
Begin the new year by getting your mortgage in order. Many will see their fixed-rate mortgages ending this year, and, planning early is vital with possible rate changes.
Start looking at least 6-months before your current rate ends to ensure you avoid your lender’s costly Standard Variable Rate. Loyalty does not pay when it comes to mortgages, and as interest rates drop, consider the whole market. Changing lender could save you thousands over the coming years.
It is essential to explore the diverse mortgage options available to you. Whether it be a fixed rate, variable term product or an offset facility, re-evaluating what is likely your biggest asset may significantly impact your finances.
8. Create or update your budget
The last few years have seen spending patterns and budgeting change significantly. Many have benefitted from pay rises, while the increased cost of living has impacted others. Changes to working patterns have also led to money being spent differently.
Budgeting will help you cover your expenses whilst maintaining a rainy-day fund as security. With rising costs, neglecting your longer-term savings goals is easy, but a good budget will help ensure you have a good balance.
As your trusted financial partner, Moore Kingston Smith is here to support you on your journey to financial well-being. Contact our team of expert advisers to discuss your financial plans for 2024 and beyond.