Six financial New Year's resolutions for 2026

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As we step into 2026, many of us will make resolutions to improve our health, relationships, or careers. But what about your financial well-being? Setting clear financial goals for the year ahead has never been more important, and these six resolutions can help you take control of your finances and plan for the future.

1. Create (or refresh) your budget

Regardless of your level of income, a budget is the foundation of good financial planning, yet many people don't have one or haven't updated theirs in years. Start by tracking your monthly income and expenses, categorising spending into essentials and discretionary items. You might be surprised by how much small purchases add up. Set realistic spending limits for each category and review your budget monthly, adjusting as circumstances change.

2. Build your emergency fund

Having three to six months' worth of living expenses set aside in an easily accessible savings account is recommended. This provides a crucial buffer against unexpected events such as job loss or major repairs. If you don't have an emergency fund yet, consider setting up a standing order so the money is automatically transferred each payday.

3. Review your pension contributions

It's easy to forget about your workplace pension, but reviewing your contributions annually is crucial. Check whether you're contributing enough to receive your employer's full matching contribution—this is essentially free money. If you've had a pay rise or bonus, consider increasing your contribution rate. Even a 1% increase can make a substantial difference over the long term, thanks to compound growth and tax relief. For those paying tax at 40%, a combination of tax relief and a scheme where an employer matches what you put in means you could get £2 in a pension (one from you and one from your employer) at a cost to you of just 80p. There aren’t many investments that can match that.

4. Make use of tax-efficient savings

Individual Savings Accounts (ISAs) remain one of the most accessible tax-efficient options for UK taxpayers. For 2025/26, the annual ISA allowance remains £20,000, allowing you to shelter that amount from income tax and Capital Gains Tax. From April 2027, for those under 65, the annual amount that can be deposited into a cash ISA will be £12,000, while the remaining £8,000 must be invested in stocks and shares.

5. Review your life insurance and protection cover

Whether you've recently married, had children, bought a property, or changed jobs, ensure your protection cover fits your circumstances. Life insurance is essential if others depend on your income. Beyond life cover, consider whether you need critical illness insurance or income protection. If you already have policies in place, review the coverage amounts and shop around.

6. Update your will and estate planning

It is vital that your loved ones know your wishes when you die; however, research suggests that 53% of adults aged 50-64, and 22% of those aged 65 and over, do not have a will. Without one, your assets will be distributed according to intestacy rules, which may not reflect your wishes. If you don't have a will, make 2026 the year you create one. If you already have one, review it—major life events should trigger an update. Consider whether you need lasting powers of attorney in place, allowing trusted individuals to make decisions on your behalf should you lose mental capacity.

Start the year with confidence

Financial resolutions don't need to be complicated. Pick one or two that resonate most with your current situation and commit to taking action over the coming months. Small, consistent steps can lead to significant improvements in your financial well-being over time.