With 2025 just around the corner, you may be starting to think of some of the resolutions and changes you want to bring into the new year.

Of course, there are the usual promises we make to ourselves, like going to the gym, cutting down on excesses, and spending more quality time with family. But the new year is also an excellent opportunity to review your financial plan and ensure you feel secure and confident going into 2025.

So, as 2024 draws to a close, read on to discover four elements to review in your financial plan for the new year.

1. Revisit your goals and targets

In many ways, your goals are the most fundamental element of your financial plan, as they form its foundation and provide the motivation from which the rest of your strategy is built.

However, as your life progresses and your circumstances evolve, your goals may change too. For example, you may welcome the arrival of a new grandchild, or you might remarry and change your shared retirement plans.

A lot can change in a year and significant life events can be hard to plan for. So, the new year is the perfect opportunity to revisit your goals to ensure they still align with your current circumstances and dreams.

Consider the milestones you want to achieve in the year ahead, such as reaching a particular savings target, buying a new property, or paying off a debt. These short-term goals are important stepping stones toward your long-term financial security.

Once you’ve outlined your shorter-term objectives, take time to revisit your long-term goals – whether it’s retirement by a certain age, reaching an investment target, or ensuring you’re in a position to support your family as you grow older.

Revisiting your short- and long-term goals ensures that your financial plan remains aligned with your evolving circumstances and sets you up for continued progress in the years to come.

Even if your objectives are broadly unchanged, the new year is a good time to review your progress toward them and check you remain on track.

2. Review your budget

A carefully planned budget allows you to monitor your spending, avoid excessive debt, and direct funds toward future investments or emergencies. By creating and sticking to a budget, you gain better control over your finances, laying the groundwork for long-term financial security.

Each new year brings changes not only to your personal circumstances but also to the broader economic climate.

For example, high inflation may increase the price of your weekly shop while changing interest rates could influence your mortgage repayments. These macroeconomic shifts, combined with any personal life changes, may then directly affect your individual budget.

The new year is an ideal time to assess these factors, adjust your budget accordingly, and ensure it remains aligned with your financial goals and current expenses.

3. Complete your self-assessment tax return

The deadline for completing a self-assessment is 31 October if you want to file a paper return. However, you have until 31 January to file online, which is the final deadline to submit a return without incurring a potential penalty.

This means you have a month at the start of the new year to get your tax affairs from the previous financial year in order.

It’s important to remember that it’s not only self-employed people and business owners who need to complete a tax return.

There are several situations that may require you to file a self-assessment, including if you:

• Are employed and earn more than £150,000
• Have savings and investments outside of tax-efficient wrappers like ISAs
• Have made a profit on the sale of assets liable for Capital Gains Tax (CGT)
• Had to pay the High Income Child Benefit Charge
• Received income from property rent
• Earned tips or commission
• Earned income from a foreign country.

It’s important that you clarify the allowances for each of these situations as they often change.

It is your responsibility to ensure you file your return on time and claiming you didn’t know you had to is not considered a reasonable excuse. So, the new year can be the ideal time to make sure you have everything in place to meet the deadline.

4. Prepare for the upcoming tax year

The new calendar year arrives just a few months before the new tax year, which begins on 6 April. This makes the start of 2025 an ideal time to review your finances and ensure you’ve maximised your annual financial benefits before the limits reset in the spring.

For example, you might consider making additional tax-efficient contributions to your pension if you have remaining Annual Allowance, or topping up your ISAs before the allowance resets. By acting early, you can make the most of these and set a strong foundation for the year ahead.

If you don’t take advantage of these allowances by the end of the financial year, you risk losing out on valuable tax benefits.

So, taking steps at the start of the new year gives you ample time to help ensure you optimise your finances and make the most of available reliefs, contributions, and allowances before the tax year close.

Get in touch

A financial planner can work with you to help ensure your stability and prosperity going into 2025 and beyond.

To speak to a financial planner, get in touch.

Email info@blueskyifas.co.uk or call us on 01189 876655.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

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.

The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, trusts, Lasting Powers of Attorney, or will writing.