Over half of people over 45 say they don’t set a new year’s resolution. But small changes from 1 January could make all the difference to your future. Here are three common goals for people at different stages of their saving and investing journey and how you can make them work for you too.

1. A new saver’s starting point – clear debts, then build savings, then invest: The fourth most popular New Year’s resolution is to save more money. It’s a great goal, but don’t stuff that cash under your mattress. How you save is important. For example, small debts like overdrafts can carry hefty fees and interest rates. It’s usually a good idea to pay these off before building your cash pot. When you’re in a position to start saving, you’ll want to start on an emergency fund. An emergency fund should be in cash savings you can access easily. It’s there to cover unexpected costs like a broken boiler or car repairs or a short-term loss of income. Three to six months’ worth of essential expenses is usually a good place to start, but you might want more depending on your circumstances. If you’re in or close to retirement, it’s usually best to have closer to 1-3 years’ worth of expenses. Once your high-interest debts are paid and you have rainy day savings to fall back on, think about dividing your money into pots. Experts suggest a ‘Goldilocks’ approach to saving in the form of short, medium and long-term goals with pots to go alongside them.
2. Make your long-term savings work harder: How often have you heard “if you just gave up your daily coffee you’ll have…”? But having financial stability and resilience doesn’t always mean giving up on the things you love. If you know that your morning coffee usually costs £2.50 per day, set up a monthly standing order to a savings account that matches the amount. Think about investing that money for the long-term (5 years or more) in something like a Stocks and Shares ISA or a pension. When you invest, you need to be comfortable with the value of your investments going down, as well as up. Unlike cash, you could get back less than you started with.
3. Make better investment decisions: Spreading your money, diversifying, is one of the most important things when investing. Lots of us know we should do it, but how do you know you’re diverse enough? Start by checking you have the right mix of investments in your portfolio. Spreading your money across different assets and markets.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of January 2021 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.