How to refresh your finances in 2026

The start of a new year is a natural moment to pause and take stock. Before day-to-day spending and saving habits take over again, 2026 offers a good opportunity to carry out a financial health check and make sure your plans are still heading in the right direction.

Regularly reviewing your finances can help you stay focused on your long-term goals, spot potential problems early and make informed decisions with confidence. Below are 12 practical steps that could help put you on a firmer footing for the years ahead.

Pensions

1) Review your pension to see if you’re on track

Few financial tasks offer as much long-term value as checking in on your pension. Start by gathering together details of all your pensions, including any older schemes you’re no longer paying into. Once you know how much you’ve built up, an online pension calculator can help estimate the income your pot might provide in retirement.

These figures aren’t guaranteed – outcomes depend on investment performance and future contributions – but they give you a useful sense of direction. It’s also worth requesting a state pension forecast to see when you’ll receive it and whether you have any gaps in your National Insurance record. You typically need 35 qualifying years to receive the full state pension, and gaps can often be filled by paying voluntary contributions for the past six tax years.

If your projected income falls short of what you’d like, even modest increases to your contributions can make a big difference over time. Lump-sum payments are another option if you have spare cash you’re happy to lock away until at least age 55 (rising to 57 from 2028).

2) Use salary sacrifice where possible

Salary sacrifice remains one of the most tax-efficient ways to build pension wealth. Although a £2,000 cap was announced in the Budget, it won’t take effect until April 2029, leaving several tax years to benefit from the current rules.

Under salary sacrifice, pension contributions are made before income tax and National Insurance are applied. That means basic-rate taxpayers save 8% NI and higher-rate taxpayers save 2%. In practical terms, a £100 pension contribution could cost a basic-rate taxpayer just £72, and a higher-rate taxpayer £58.

3) Increase contributions to counter fiscal drag

With income tax thresholds frozen until 2031, more people are being pulled into higher tax bands over time. Increasing pension contributions can help soften the impact of this so-called fiscal drag, as contributions within annual limits are exempt from income tax.

Higher- and additional-rate taxpayers benefit most, saving 40% or 45% tax respectively. Those earning between £100,000 and £125,140 can save up to 60% by preserving more of their personal allowance, which tapers away once income exceeds £100,000.

4) Track down lost pensions

It’s estimated that over £30 billion is sitting in lost pension pots across the UK. If you’ve changed jobs several times, there’s a good chance you may have misplaced one.

As long as you know the name of your former employer or pension provider, the government’s pension tracing service can help you track it down – potentially adding thousands to your retirement savings.

5) Check you’re receiving the right pension tax relief

Many higher-rate taxpayers miss out on pension tax relief because it isn’t always applied automatically. Contributions to SIPPs and some workplace schemes receive basic-rate relief at source, but any additional relief must be claimed via self-assessment or by contacting HMRC.

You can claim back missing relief for up to three previous tax years, and the repayment can be substantial.

6) Consider consolidating your pensions

Multiple small pension pots can be hard to manage. Consolidating them may make it easier to track performance, manage investments and understand fees – particularly as you approach retirement.

However, some older schemes include valuable guarantees that could be lost on transfer, so it’s important to check the detail before making any decisions.

Passing on wealth

7) Make use of gifting allowances

Inheritance tax is affecting more families as thresholds remain frozen. Planned changes from April 2027 will also bring pensions into the IHT net, making lifetime gifting even more important.

You can give away up to £3,000 each tax year free from IHT, with the option to carry forward unused allowance from the previous year. A couple could therefore gift £12,000 immediately if neither used their allowance last year.

Gifts made from surplus income can also be exempt, provided they meet HMRC rules. This is a powerful but often overlooked planning opportunity and one where advice can be invaluable.

Stocks & Shares ISAs

8) Make full use of your ISA allowance

ISAs remain one of the most effective ways to invest tax efficiently. With dividend taxes rising and income tax thresholds frozen, their value is only increasing.

From April 2026, dividend tax rates are due to rise by two percentage points. A basic-rate taxpayer receiving £10,000 of dividends outside an ISA could face a tax bill of over £1,000, while a higher-rate taxpayer could pay more than £3,300. Within an ISA, dividends and capital gains remain tax free.

Using your £20,000 annual allowance consistently can help build significant long-term wealth and provide flexibility later in life.

9) Use Bed & ISA to manage capital gains

If you hold investments outside an ISA, Bed & ISA can be a useful strategy. This involves selling assets and immediately repurchasing them within an ISA wrapper.

By using your £3,000 annual CGT exemption, you can gradually move investments into a tax-free environment without triggering a tax bill. Deadlines often fall before the end of the tax year, so planning ahead is key.

10) Consider Junior ISAs for children or grandchildren

A Junior ISA can be a powerful long-term gift. You can invest up to £9,000 a year, with all growth free from income and capital gains tax.

Starting early gives investments time to compound over 18 years, and JISAs also provide a great opportunity to introduce children to investing and long-term financial thinking. Funds become accessible at 18, so conversations about how the money is invested are important as that milestone approaches.

Protection and planning ahead

11) Review your financial protection

Protecting your wealth is just as important as growing it. Life insurance and income protection can provide crucial financial security for loved ones if the unexpected happens.

Putting the right cover in place can ensure your family can maintain their lifestyle and avoid unnecessary financial stress during an already difficult time.

12) Reassess your medium- and long-term goals

If you already work with Kellands, you’ll likely have clear goals in place – from retirement timing to legacy planning. After a volatile period for markets and household finances, it’s natural to want reassurance or adjustments.

A review with your financial planner in early 2026 could cover retirement timelines, portfolio performance, upcoming expenses, changes to income allowances, and any concerns you may have. A fresh perspective can help you move into the year ahead with clarity and confidence.

Get in touch

If you’d like help setting – or resetting – your financial goals for 2026, speak to Kellands today. A structured review now could make all the difference in the years ahead.

Please note 

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

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