The New Year has arrived, meaning it’s only a matter of months until the 2020 to 2021 tax year ends. The tax year end is on April 5, 2021, and the new tax year – 2021 to 2022 – begins the day after.
The current UK lockdown restrictions will provide a time to review their finances, while others may have set money matters as their New Year’s Resolutions.
Whatever the reason for saving may be, Charlotte Oates from saving and investing app Moneybox, has shared some tips for how to make money resolutions you can stick to in 2021.
Don’t miss out on free money
Among her suggestions, Ms Oates is reminding savers of options which they may be eligible for – and the deadline to take advantage of them this tax year.
“As part of your planning, it’s worth spending some time researching the product that is right for you to make sure you don’t miss out on relevant tax relief or bonuses,” she said.
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“It may sound too good to be true, but depending on what you are saving for, there are some great schemes out there that could actually give you free money.
“If you’re saving for your first home for example, you can get up to £1,000 every year from the government with a Lifetime ISA.”
Track down your old pensions
Taking a look at pension pots could also be worthwhile, she postulated.
“Do you know how much money you have sitting in old pension pots? The ABI estimates that around £19.4billion worth of pensions in the UK are ‘lost’, as people change jobs and lose track of old workplace pensions,” said Ms Oates.
“The Moneybox Personal Pension allows you to consolidate all of your old workplace pensions, track your progress, and make contributions directly into your pension – all from your mobile phone.
“Better yet – our in-app Provider Search Tool makes tracking down an old workplace pension easier than ever.
“With 25 percent government tax relief on your pension contributions available each year – can you really afford not to find yours?”
“We’ve all seen those jam-packed gyms in January that slowly get quieter by early February… As with all New Year’s resolutions, it’s easy to go all in straight away, set unrealistic expectations for yourself and fall back into old habits just as soon as you started.
“Focus on building sustainable savings habits that don’t make a huge impact on your lifestyle. By starting small, for example saving your spare change with round ups, or by setting up a direct debit into your savings pot straight after payday, you can save and invest without even thinking about it.”
Make a plan for the year
“It may seem obvious, but having a clear overview of your monthly ingoings and outgoings can make a big difference to how you spend, and gives you an opportunity to see clearly where you are able to save as well.
“Remember to always include paying down any debt you may have (this should be a top priority) and consider where you are spending your money and whether there’s any wiggle room to shift this towards your monthly savings.
“Once you have an understanding of your current financial situation, you can establish your goals, both short term and long term, and put together a plan for the best way of getting there.
“Clear goals will help steer your money to where it can work its hardest.”
Slow and steady wins the race
“If you’re working towards a long-term goal and have a cash buffer in place, consider dipping your toe into investing, where time is your secret weapon. The longer you hold your investments, the higher the probability of making a return.
“We help our customers stay motivated with a Time Machine feature which shows how playing the long game can really pay off.”
Make your money matter
“Many of us want to play our part in protecting the planet, and make sure we reduce our plastic waste, do our recycling and maybe try to make more sustainable choices as consumers.
“But have you thought about where your savings might be invested and what companies these are funding?
“By opting for a responsible investment option for your ISA or pensions, you can put your money to work in a way that may be more aligned with your values.”
Think ahead, and also far ahead
“A great mantra in saving and investing is to keep your mind on the end goal.
“Whether you’re saving for your first home, a rainy day or planning for retirement, keep that goal in mind as you set aside money each month. Every little thing you do today is a step towards achieving your financial ambitions.”