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Five New Year money resolutions everyone should follow in 2023


Financial experts at AJ Bell have come up with five New Year’s resolutions that everyone can consider making with their money to get on top of their personal finances. From sorting out old pensions to beating the tax hikes by making the most of savings allowances, there are ways to make the most of one’s money.

January is a good time to sort out personal finances for the year ahead and money experts have been detailing tasks which could save people thousands of pounds.

Laura Suter, head of personal finance at AJ Bell, said sorting through personal finances might be boring but it’s definitely worth doing.

She said: “January is a month where most people stay in, shun socialising and have a bit of spare time on their hands, so it’s the ideal time to tackle some of that boring life admin that you’ve been putting off.

“The bonus is that you could make a decent amount of money from tackling some of these tasks, which is often much-needed at the start of the year.”

READ MORE: Britons can easily make £477 in January with this money making tip

According to the Department for Work and Pensions (DWP), people switch jobs on average 11 times during their careers – which means a lot of different pensions to keep track of.

It’s estimated there could be 1.6million lost pension pots in the UK, with each one being worth an average of £13,000 per pot. So, it’s worth digging out your old paperwork.

Ms Suter explained: “We’ve now had 10 years of auto-enrolment in the UK. This works on an opt-out basis, meaning that unless you deliberately decide not to save into a pension your employer must put one in place, subject to a few conditions.

“Thanks to this landmark policy, private sector workers are now paying over £60 billion a year into their pensions, a 50 percent increase on a decade ago.”

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She continued: “Although it has dramatically increased the amount we save for retirement, it also means more pensions to keep track of. Most people will have a new pension set up for them with every new employer. Consolidating them together could make them much more manageable, as well as giving you a better financial return.

“Your first port of call is finding any old paperwork that will tell you where your pension is and how to log-on to see its value and transfer it. If you can’t find any documents, you can use the government’s pension tracking service to find where it is now.

“Tracking down these old pots makes sense for a number of reasons. Firstly, knowing how much you have saved in total will help you work out how much you might need to save in the future to enjoy the retirement you want.

“Secondly, once you have located any old defined contribution funds you can consider combining them with your current workplace pension or moving them to a Sipp you can manage online. This will make your pension easier to monitor and manage, but also means you could benefit from lower charges, greater investment choice and more flexibility when you decide to access your fund.”

The financial expert also shared valuable advice to help people beat tax hikes by using up ISA and pension allowances.

She added: “The system is set to become less generous, with the taxman taking a bigger bite out of our earnings and investment income. That makes it doubly important that we all take advantage of legitimate tax shelters like ISAs and pensions.

“Anyone can put up to £20,000 a year into an ISA and most people have a £40,000 annual limit for their pension. On top of this, anyone with children can open a Junior ISA and put up to £9,000 a year into it.

“Make the most of these allowances to shield money from the taxman and look into ‘Bed and ISA’ transactions to make use of your Capital Gains Tax allowance, which will be slashed to just £6,000 in April and £3,000 in 2024.”

 

Five ways people can make the most of their money according to AJ Bell:

  • Sort old pensions
  • Start saving for your children
  • Write a will
  • Make the most of your cash
  • Beat the tax hikes by using your ISA and pension.



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