5 ways to get your finances in shape for 2021


The new year is a great time to make a positive change. You might be thinking about taking up jogging or eating more healthily, but consider making financial changes too.

Forming good habits now will give you peace of mind, put you in control, and give you confidence as you head into the new year.

Here are five ways to get your finances in shape for 2021.

1. Check-in on your old pensions

If you’ve worked for several employers during your career, you’ll probably have more than one workplace pension. Having multiple pensions can make it easier to lose track of their performance or even forget about them entirely.

Even if these old pensions don’t hold a huge value, they can still make a valuable contribution to your income in retirement so it’s worth checking in on them.

According to a study by the Association of British Insurers, published in the Guardian, it is estimated that around 1.6 million pensions have been ‘lost.’ The total value of these pensions is around £19 billion, meaning that the average plan contains around £13,000.

If you think you may have a lost pension, you can check for free on the government’s Pension Tracking Service website.

As well as being difficult to keep track of, another risk of multiple pensions is that you can’t always be sure they are working hard to meet your goals. You might want to consider consolidating. Bringing your pensions together can make them more manageable, but also means you can concentrate your funds on the schemes with the lowest charges or the greatest flexibility.

Consolidating pensions can also have negative repercussions, such as triggering exit fees or losing valuable guarantees. Speak to us if you’re considering consolidating your pensions and we can help ensure it’s the right option for you.

2. Check-in on your allowances

If you want to live the most comfortable possible lifestyle in retirement, it’s important to maximise your allowances so that you can build your pension fund in a tax-efficient way.

Be aware of the Annual Allowance. Every tax year you can save 100% of your earnings or £40,000 (whichever is lower) into a pension and benefit from tax relief on your contributions. If you are a high-earner, or you have already accessed Defined Contribution (DC) pension benefits flexibly, different allowances might apply.

Speak to us if you’re unsure which allowance you need to consider.

An Individual Savings Account (ISA) could provide another useful source of income in retirement. They are also a tax-efficient way to build wealth.

In the 2020/21 tax year, you can contribute £20,000 across all ISAs you hold, so be sure to make the most of this limit.

3. Put the right protection in place

If you haven’t already done so, be sure to put financial protection in place as you head into the new year. Knowing that you and your family will be looked after should the worst happen will give you peace of mind.

A 2017 study by the Financial Conduct Authority found that almost two-thirds of Brits (65%) have no life insurance or other protection cover in place.

If you are the main or only earner in your household, the loss of income if you’re unable to work could be devastating.

Income Protection could support you and your family if you are unable to work for an extended period, while Critical Illness cover can offer a lump sum pay-out should you be diagnosed with certain conditions. Life cover pays out on death but there are many different types of plans to choose from.

Speak to us and we can take a holistic view of your finances and the protection you already have in place, plugging gaps in your cover to safeguard you and your family.

4. Review your estate planning

Another good way to ensure that you’re on top of your finances is to review your estate planning.

If you don’t already have a will in place, make this the year you write one. If you do have a will, take the time to review it and ensure it still aligns with your wishes. Changes to your circumstances, such as marriage, divorce, or births, can change your priorities.

An up-to-date will is the only way to be sure your wishes are known so write or update yours now.

5. Speak to a financial adviser

The coronavirus pandemic closed businesses, reduced wages, and left many facing redundancy this year. If your financial plans have been disrupted, you might be concerned about whether you are still on track to reach your financial goals.

Speak to us and we can give you peace of mind and confidence that you’re making informed decisions, whether you are on track to meet your goals or there is a shortfall to make up.

According to a study by Royal London, clients who have regular contact with their financial planners feel more in control of their finances and more confident in their ability to absorb financial shocks.

If you want the peace of mind that you’re growing your wealth in the most tax-effective way, get in touch with us now.

Get in touch

If you want to start the new year with financial peace of mind, we can help. Please email info@investmentsense.co.uk or call 0115 933 8433.

Please note

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The value of your investment (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available.

Life Assurance plans typically have no cash in value at any time and cover will cease at the end of term. If premiums stop, then cover will lapse.


The Financial Conduct Authority does not regulate tax advice or estate planning.