New year, new approach to your finances
As 2025 draws to a close, it’s time to set some New Year resolutions, and getting finances in order will be at or near the top of the agenda for many people.
Scotsman Money has asked a range of experts for their tips on making changes that are achievable and will have a lasting positive impact on such things as savings, investments, and mortgage and credit card payments.
Firstly, Royal London’s consumer finance specialist, Sarah Pennells, offers some practical guidance, applicable to both those just starting out on their financial journeys, as well as to people wanting to build on their existing knowledge:
◆ Tackling debt – credit cards and beyond
Start by listing all your debts and prioritising those with the highest interest rates. Set a realistic repayment plan and avoid taking on new debt unless absolutely necessary. If you’re struggling, reach out to free debt advice services.
◆ Building financial resilience – start saving today
Royal London’s financial resilience research reveals a worrying statistic: almost one in five of adults in Scotland currently have less than £100 in savings. This lack of a financial safety net leaves many people vulnerable to unexpected expenses. If you’re starting from scratch, open a simple savings account or a cash ISA and set up a regular transfer to this from your current account. Aim to build up at least three months’ worth of essential expenses as your emergency fund.
◆ Maximising your ISA allowance, and planning for changes
ISAs remain one of the most popular ways to save and invest – but research suggests that we could be getting more out of them. According to Royal London’s ISA Landscape Report, only 11 per cent of ISA holders in Scotland use their full £20,000 annual allowance, in comparison to 16 per cent across the UK. The cash ISA annual limit is set to fall from to £12,000 in April 2027, so it’s worth increasing your ISA contributions before then to make the most of the current allowance if you can.
Stocks and shares ISAs offer the potential for higher returns over the long term.
◆ Seek support and stay informed
Financial confidence and knowledge are key to making good decisions. Seek advice from professionals, or use reputable websites such as MoneyHelper. From April, financial providers will start offering Targeted Support, a limited form of advice designed to address the so-called “advice gap”.
Meanwhile, Ben Kumar, head of equity strategy at 7IM, says: “At the start of a new year, it can be tempting to go big. Run a marathon in X hours. Read Y books a week. Visit 10 new cities. And there’s absolutely no harm in shooting for the stars. Aim high and all that.
“But when it comes to financial resolutions, you’re not actually looking for big gestures or sweeping changes. Saying, ‘I’m going to make 1000 per cent returns this year’ isn’t something you can control – although if you can, do get in touch!
“What the New Year is actually good for is checking in on your portfolio, health-checking your investment habits, and making small tweaks to your plan if necessary.”
According to Jon Crowther, financial adviser at Glasgow-based Foster Denovo, people should prepare for the unpredictable and work within the principles of sound financial planning.
He says: “Reviewing your budget after the festive season is one way to identify the best use for your money, especially in the final months of the tax year.
“Can you pay more into your pension? Have you made the most of your available allowances? Is your portfolio where it should be in terms of tax wrappers, asset allocation, and objective, be that growth or income? What’s your tax position and can anything be done to mitigate this?”
Calum Brewster, from national financial planning firm Finli, says: “If you want to get a solid grasp on your finances for 2026, then it’s important to recognise your emotional habits and how this affects your financial choices.
“Start by being honest about how the past year has shaped your relationship with money. Did financial stress and Budget rumours make you overly cautious? Did you overspend to cope with pressure?
“Did you avoid looking at your accounts altogether because it felt overwhelming? Identifying habits like these will put you in a better position to make intentional decisions in the year ahead.”
He encourages people to review income and outgoings with a fresh eye, look for outdated direct debits, overly expensive bills or unnecessary spending.
Next, set one or two core financial priorities for 2026. These could include building an emergency fund, reducing debt, saving for a home, improving your pension contributions or preparing for a major life change such as parenthood or retirement.
Kevin Brown, savings expert at Scottish Friendly, says: “It’s not often you can manage to tick off every item on your wish list for the year ahead.
“The old saying that a stitch in time saves nine feels like it was coined for New Year’s resolutions around health and finances. The impact of not sticking to those can be felt far into the future.
“We recently asked what advice people would give their younger selves, and71 per cent of Scottish adults regret not having done more to secure a better financial future for themselves. Given the chance, they would tell their younger selves to save and invest more.
“The sooner you start taking small steps towards building a nest egg, the better – and the bigger your eventual pot. So, if you can, it might be an idea to not put it off. Act now if possible.
“And if you are about to have a baby, potentially have a look into stocks and shares Junior ISAs so you are ready to start investing for them when they are born. That way, you could ensure your child doesn’t miss out on a single year of compound growth.”
George Gray, financial planner at Acumen Financial Planning, says: “The best outcomes are often achieved through making a number of small changes which are easier to sustain and more likely to remain a habit.
“Take time to review your finances, consider your income vs expenditure and focus on what you want to achieve with your money. Small increments over long periods can make a big difference.”
He adds: “It may sound straightforward, but for some this can seem overwhelming. However, setting clear objectives early in the new year can help put yourself in a much better place to focus on you and everything else you hope to achieve.”
Sam Goult, director and financial planner at AC Wealth, says that the basics of retirement preparation involve understanding your desired lifestyle and taking a comprehensive inventory of your current and future financial position.
“Start by creating a realistic budget that accounts for both essential expenses and discretionary spending in retirement, keeping in mind that longer lifespans require savings to stretch further.
“Review all your pension statements – both workplace and personal – and make use of the government’s Pension Tracing Service to locate any forgotten pots from previous employers. Check your state pension entitlement and consider making voluntary National Insurance contributions to fill any gaps, as the full pension requires 35 qualifying years.”
Lisa Caplan, director of direct advice and guidance at Charles Stanley, urges people to get their tax return done. “You’ve got until 31 January, but you can get ahead of the deadline and breathe easy,” she says.
She adds: “Get ready for the new tax year. The tax net continues to close on investors following the autumn Budget, with important allowances frozen for longer and tax on dividends and investments set to rise. If possible, use your ISA allowance.
“Consider topping up your pension with an extra one-off contribution to benefit from tax relief keeping the limits and allowances in mind. There are also other allowances such as capital gains tax allowance – if you have the scope to utilise it, try to.”
Finally, Brian Byrnes, head of personal finance at Moneybox, offers his top five tips for achieving your financial objectives:
◆ Review your goals
Take some time to review your financial goals for 2026, and ensure they are realistic. Perhaps you’ve made more progress than you thought in 2025, or maybe you need to ramp up your efforts. Dedicating an hour or two over the holidays to setting up a budget can have a big impact on your financial confidence levels and your attitude to your money.
◆ Automate savings and investing
Whatever your goal is, automating your financial contributions is an easy way to make steady progress towards them in the background.
◆ Review your payments regularly
Have you ever signed up for a trial and forgotten to cancel it, letting the payments keep on leaving your account? Or subscribed to an app or other service three years ago that you never actually use anymore? Reviewing your regular payments is a great way to spot where you might be wasting money without realising it.
◆ The 50/30/20 method
Break down your income into three broad categories: 50 per cent should be allocated towards essentials, 30 per cent for spending, and 20 per cent for saving. It’s a simple way to view your finances, and you can adjust the percentages based on your priorities to better suit your lifestyle too.
◆ Plan for the future
It feels like 2025 just started, so it goes without saying that the year goes by quicker than you think. Take time now to review and think about your longer-term financial goals, like retirement, as putting it off might mean it stays on the to do list for another lap around the Sun.
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