5 financial housekeeping jobs to tackle this Christmas break

The run-up to Christmas can be a hectic time. Battling queues on the high street, managing lengthy gift lists during a cost of living crisis, and arranging visits with relatives can leave little time for relaxation.

Once the big day is over though, you might find yourself at a loose end, stuck in the void between Christmas and a new year return to work.

One way to use this time effectively might be to make a list of the financial housekeeping jobs you’ve been putting off all year and use your free time to tick them off.

Here’s a rundown of five simple tasks that could help you start the new year in the best possible financial position.

  1. Check in with your household budget and put a saving strategy in place

Recent forecasts from the Office for Budget Responsibility (OBR) confirm that inflation and interest rates are now expected to stay higher for longer. The figures, released alongside the chancellor’s Autumn Statement, mean that the cost of living crisis is likely to continue well into 2024. That makes now a great time to revisit your household budget.

Make a list of your income versus expenditure and you might find areas where savings can be made. Maybe you signed up to subscription services in the summer that you no longer use or your gym membership from January has been largely forgotten.

Cut out unnecessary expenditure and revisit your savings and your emergency fund. The prolonged period of high inflation may have cut into these savings so put a strategy in place to top it back up, starting in January.

  1. Revisit your pension contributions and top them up if you can afford it

Pension saving became even more attractive in 2023 as the chancellor looked to encourage older workers back into employment.

The abolition of the Lifetime Allowance (LTA), and the raising of the Annual Allowance and the Tapered Annual Allowance mean you can make more tax-efficient contributions in 2024.

You’ll receive automatic tax relief at 20% on contributions up to £60,000, and as a higher- or additional-rate taxpayer, you can claim even more. As a higher earner, triggering the Tapered Annual Allowance allows you to contribute £10,000 in 2024/25 while still receiving tax relief.

Revisit your plans too, and ensure they still align with your wishes.

  1. Maximise your ISA allowance ahead of the new year and prepare for new rules from April 2024

It’s never too early to get end of tax year-ready and that means making the most of the tax efficiencies your ISA offers.

You don’t pay tax on the interest you earn in your Cash ISA, while gains in a Stock and Shares ISA are free of both Income Tax and Capital Gains Tax (CGT).

The current subscription limit is £20,000 a year, so check how much you have paid this year and then see if you can afford to top yours up.

It’s worth noting that the limits will remain the same in 2024/25. From April, though, you will be able to deposit money into multiple ISAs of the same type during the same tax year. This marks a change from previous rules.

  1. Find lost pensions and start thinking about whether consolidation might be right for you

If you have held multiple jobs over your career you likely have multiple pension plans too.

Make time this Christmas break to sort through your old paperwork and find the plans that you have forgotten about or “lost” along the way.

Money Marketing confirms that the value of lost pensions in the UK is nearly £27 billion. This is one of the reasons for the chancellor’s recently announced “pot for life” plan.

For now, though, digging out your pension paperwork could help to ensure all your pots are accounted for.

You’ll have all the available information when you come to make a retirement decision. And you might even start to think about consolidation. Moving all your plans into one means you’d only have one provider to contact, one value to consider, and you could find that there are other advantages too. Older plans might have higher charges, for example, or be less flexible, with fewer funds to choose from or inflexible death benefit options.

We can help decide if consolidation is right for you. Remember, you can use the government’s pension tracing service if you need help to find your lost pensions.

  1. Review your protection policies and look to fill any gaps in cover

For your peace of mind in 2024, you’ll want to know that you and your loved ones are protected should something happen to you.

If your family relies on your income to pay household bills or mortgage payments, what would happen if an accident or illness stopped you from working? What if a career change means that you no longer have your work-based life cover?

Use your time off to check for expired policies or forgotten direct debits and see what you’re covered for. Once you’ve done this, think about what you and your family might need to be covered against and then speak to us for help to cover the gaps.

At the same time, you might want to revisit your will to ensure it still aligns with your wishes, or maybe think about putting a Lasting Power of Attorney in place.

The festive season might not seem like the obvious time to dwell on your mortality but taking action over the Christmas period could allow you to enter the new year with confidence that your finances are in order and that you are in control.

Get in touch

If you have any questions about your investments or how the future of the UK economy could affect your long-term goals, speak to us now. Please contact us on info@janesmithfinancial.com or call 01234 713131.

Please note

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

More stories

18 Dec 2023 Blog posts

3 Autumn Statement changes hidden in the small print and how they could affect your pension

Read more

22 Nov 2023

Everything you need to know about the 2023 Autumn Statement

Read more