Pension & retirement
Harry Sims
The beginning of the year is a great time to start afresh – so why not try some New Year’s financial resolutions?
Each of the suggestions below could help you and your family to face the future with confidence – whatever may happen.
Taking action now could provide major benefits later down the line and provide valuable peace of mind in the meantime.
Whether you’re close to retirement or it’s decades away, it’s never a bad time to take a good look at where you stand when it comes to your pension.
If you have a workplace pension, look at how much you’re contributing and how that money is being invested.
While it’s tempting to think everything is sorted because you’re paying in every month, you may be surprised when you take a second look.
Are your pension investments performing well?
Is your pension fund being invested at the right risk level for you?
Could you afford to pay in a little more each month – and how could that help build your fund?
If you have paid into a number of different pension funds during your working life, take some time to track them down. The Government’s free pension tracing service can help with this.
Once you’ve got details of all your pension plans, you may wish to consolidate some or all of them into a single fund.
You need to think carefully about this – check our pension consolidation guide for more information – but consolidation can help cut fees and simplify pension management.
Talk to a financial adviser to get expert help on what could work best for you – and how to do it.
If you’re aged over 55 (or you turn 55 this year) then you can get access to up to 25% of your defined contribution pension as a tax-free lump sum.
This may be useful if you want to want to pay off your mortgage or have other debts you would like to settle.
However, you don’t have to take all the money in one lump and there are ways in which that tax-free cash can grow.
Check out our guide to pension lump sums to find out more.
As well as resolutions, people like making predictions at this time of year.
However, the reality is that most of us have no idea what could be around the corner.
Being prepared for what life could throw at you is a great way to start 2026.
Protection policies such as life insurance, critical illness insurance, income protection and mortgage protection can help take away financial worries in difficult and stressful circumstances.
Are your existing protection policies enough?
Check what cover you currently have in place and assess whether it’s enough for you and your family.
Then consider whether additional policies are needed to cover other eventualities – and enjoy greater peace of mind this year and other years to come.
Mortgages remain most people’s biggest financial consideration.
With interest rates starting to fall, the coming year is a good opportunity to take stock of where you are and whether you could get a better rate.
Talk to a mortgage adviser who will be able to survey the current market and provide expert insight into your next move.
As well as getting a better rate, you could find out ways to pay your mortgage off earlier.
One interesting section about November’s Budget was when the Chancellor talked about the power of investing.
Rachel Reeves pointed out that someone who had invested £1,000 a year in an average stocks and shares ISA every year since 1999 would be £50,000 better off today than if they’d put the same money into a cash ISA.
While it’s important to say that the value of investments can go down as well as up, the difference in the example above is startling.
This is one of the reasons why if you are looking for a long-term return on your money, consider looking into investments.
Talk to a financial adviser who will be able to help you choose investments which match your financial goals and attitude to risk.
If you already have investments, it’s a good idea to check on their progress.
Are they performing in accordance with your goals?
Does the risk level match your outlook?
Are there ways you could be making your money work harder?
Getting a good grip on your investment management could pay dividends not just this year but in years to come.
Whether you have a cash ISA, a stocks and shares ISA or a mixture of both, you should try to maximise your annual £20,000 tax-free allowance.
This will ensure that as much of your savings and investments as possible is free from tax.
The 2025/26 tax year ends on April 5 in 2026 so make this a red letter day as you cannot roll over any of your ISA allowance into the next tax year.
The November Budget reduced the amount that under-65s can pay into a cash ISA from £20,000 to £12,000 from April 2027.
Take action now if cash savings are a priority.
Thinking of the future often means thinking of your descendants.
The start of the year is a good time to assess how you’re preparing your children (or grandchildren) for their financial future.
Their retirement may seem a long way away, but starting a child’s pension is one of the very best gifts you can give – and it can literally last a lifetime.
On a shorter timescale, Junior ISAs are a great way to set your child or grandchild up for the start of their adult lives.
Like children’s pensions, Junior ISA contributions are tax-free and can be made by other relatives and friends.
If your children or grandchildren are grown up but still starting out when it comes to property, you might want to consider opening the ‘Bank of Mum and Dad’.
Helping family out with home loans, deposits or mortgages is becoming more commonplace as house prices continue to rise.
However, it is a good idea to talk to a financial adviser before embarking on assistance since it will have implications for you as well as your offspring.
No-one likes to contemplate the end of their life, but thinking about what will happen when you’re no longer around is a vital aspect of financial planning.
Estate planning is name given to the process that works out how you would like your assets to be managed and passed on after your death.
With inheritance tax affecting more and more families, it is a good idea to plan now to maximise how much you could pass on to your loved ones.
Things like making a will and getting Lasting Power of Attorney can give you great peace of mind now as well as making your family’s lives easier when you are no longer around, especially at a time of stress and grief.
Talking to a financial adviser can help start the estate planning process while you will also need professional legal advice on things like wills and lasting power of attorney.
If you’ve never taken professional financial advice before, the start of a New Year is a great time to consider it.
A financial adviser can help you clarify your financial goals, provide a plan to help you reach them, monitor and review progress and make changes in line with your circumstances.
In a recent survey, 91% of people who paid for financial advice said it was either helpful or very helpful in helping them manage their money.
If you already benefit from financial advice, maybe 2026 is the year you share that benefit by recommending friends or family consider talking to an expert.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. Always seek professional advice before making financial decisions.
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