New Year Resolutions

It’s that time of the year again, when we draw a line under the successes and failures of the past year and shift our thoughts towards ideas of perhaps stopping smoking, eating less and exercising more, etc. However, it’s often a case of another year another list of New Year resolutions only half completed.

2011 seemed to start brightly, but global economic gloom soon set in and with those clouds still on the horizon at the start of 2012, here are my top New Year resolutions for getting your finances in order.

1.  Review your mortgage. Although most lenders still have tightened lending criteria, there are still opportunities to negotiate a better deal. If that isn’t possible, the historically low bank base rate will mean that those with a variable rate mortgage will still have significantly lower monthly repayments, than in years gone by; so why not consider maintaining the previous (higher) level of payment, if affordable, to reduce the term of the mortgage and save a huge slice of interest?

2. Shop around for a better deal on your credit card. If the plastic has taken a beating over Christmas, search out an alternative. Lots of credit card companies are still offering very low or even zero per cent introductory rates on balance transfers, although be aware that there may be a fee based upon a percentage of the amount transferred, so check out the small print.

3. Make sure you're maxed out. Have you taken full advantage of all the tax-sheltered options available to you, namely, by funding your pension scheme and ISA up to the maximum allowable levels? For the 2011/12 tax year, the maximum ISA contribution limit is set at £10,680. There are just three months left to top up your tax-free savings.

4. Now’s an ideal time to review your pension arrangements. Pensions come in all shapes and sizes, so it is important to ensure that yours is a good fit. If you have had your pension for a number of years you could be paying high charges for a contract with little flexibility. Newer arrangements, including stakeholder pensions might be able to offer a wider range of investment options than your current plan, sometimes at a lower cost. However, before making any alterations to an existing plan make sure this will not affect any guarantees that it may have. Significant changes were made to pension legislation last year, so talk to an independent financial adviser to see if they affect you.

5. Review your savings and investments. With interest rates still so low, finding a good home for your money has become more difficult than ever. The best savings rates are usually reserved for internet based accounts and whilst some savers are wary of the internet, it really may be worth overcoming that fear to find the better rates. If the internet is definitely not for you, then consider telephone or postal accounts, as these often offer better rates than the high street.

Talk to your financial adviser about your investment portfolio, to make sure that the mix of investments matches your attitude to risk and the funds within the portfolio continue to meet your investment objectives.

Getting the right help with your financial New Year resolutions should, hopefully, make sure they last beyond the end of January and put you on the path to a financially brighter 2012.

Nathan Glaister

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