Financial resolutions for 2023

As we start the new year, many people have made new year resolutions to try and assist them in the upcoming year. This is the perfect opportunity to revisit your finances and ensure you are making the most from every hard-earned penny. At Moore Kingston Smith Financial Advisers we are in a great position to be able to help you do this.

Financial hints and tips for 2023

Revisit your financial plan

Do your financial projections still marry up with your current circumstances? Do you need a few tweaks, or some major adjustments? Has your risk profile changed, or have your income levels gone up or down? After an unusual few years, now is a good opportunity to reconsider your objectives and what you want to achieve in the short, medium and long term.

Pension health check

While your pension is a long-term investment, it is worth checking at regular intervals to ensure it is moving in the right direction and likely to produce the income you require or desire at retirement. Our advisers are on hand to help ensure your current pension is invested appropriately, performing as expected, and provides the flexibility you need. With tax bands and allowances either static or being reduced, we can help improve your contribution strategy (or income plans) to help you make this most of this important investment.

Using tax allowances

With the current government either maintaining or reducing tax allowance levels and exemptions, it is worth taking some advice on how best to maximise the allowances in each tax year, to avoid unnecessary tax charges. Capital gains and dividend allowances are reducing from 6 April 2023, while the income bands and allowances are being maintained in the lower earnings levels or reduced for additional rate taxpayers. 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.

Review your protection

With 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, or you have started a new business and need protection to ensure the business is able to continue if you were to be incapacitated.

Protect your estate

Are your Wills up to date and do 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, does your will distribute your wealth in the most tax efficient manor? 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.

Cash savings

Base interest rates have now increased to 14 times what they were at the start of 2022, and while this isn’t great news for borrowers, it can be fantastic news for those wishing to earn interest on deposits. However, many banks have been slow to pass on these rate rises to their customers, especially with business banking relationships.

It is worth reviewing your cash holdings 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.

Create or update your budget

The last few years have seen spending patterns and budgeting change significantly. Many have benefitted from pay rises, while other have been impacted by the increased cost of living. Changes to working patterns have also led to money being spent differently.

Budgeting will help you cover your expenses while maintaining a rainy-day fund as security. With rising costs, it is also easy to neglect your longer term savings goals, but a good budget will help ensure you have a good balance. Contact us for more guidance.