New year, new start: 5 steps to get ahead for 2021

After the turbulent events of 2020, many may be planning to make life changes now the new year has started. John Williams suggests five easy ways to make a start by putting your finances in order.
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Published 6 January
5½ mins

The year 2020 has certainly been a strange one for most of us. With the relentless march of the COVID-19 pandemic, many people have found their normal lives and routines thrown into disarray. The enforced lockdowns, working from home, and restricted travel and interaction, even with your family, have led many to rethink their priorities and what really matters to them. This new year, more than most, may see a rush of resolutions.

With the approval of COVID-19 vaccines and the rollouts already underway, there are high hopes for a happier new year around the world. But what can you do if you wish to make your own life-changing plans?

A great and achievable place to start is to take stock and review your financial situation. This might be the last thing you want to do having been buffeted by the uncertainties of the last ten months, but there are five easy steps you can take to ensure you get your finances in order for the new year and beyond.

1. Keep on top of the paperwork

With so many of our transactions now done online, we should really have less paperwork to worry about – but do we need to keep it all? Official documents, such as Wills, share certificates, and birth and marriage certificates, should be kept together in a secure place where you and the rest of the family can easily find them, when needed. For financial matters, the rules for how long you should keep paperwork depend on the type of document. If you’re self-employed, any records to do with your business need to be kept for at least five years, but for personal tax-related documents, the HMRC recommends at least 22 months from the end of the tax year they relate to.  One of the best ways to manage your finances is to set up a timetable and stick to it. Simply keeping a note of the financial events you know are coming up over the coming year allows you to set reminders for all your important due dates, such as insurance renewals, dividend payments or organising your tax returns.

2. Work out your cost of living

While sifting through your paperwork, you may uncover long-standing costs and commitments you had forgotten. It can be revealing to make a schedule of your regular payments and see what you’re actually spending your money on. Are you still paying out for things you no longer need, such as gym memberships, news subscriptions or streaming services? By recording what you regularly spend and stopping payments you no longer need, you will have a much clearer picture of your own cost of living. You could even take this exercise to the next level and work out your own personal inflation rate. The Office for National Statistics publishes the official UK inflation rate each month based on the Consumer Price Index (CPI). By taking your own monthly costs and comparing them to those the previous year, you can estimate your own personal inflation rate. How does it compare to the current UK CPI figure of 0.6%*? If you repeat this exercise once or twice a year, over two to three years, you can track your changing spending patterns, which can help you plan more clearly for the future.

3. Make a Will

When planning for the future, one of the most important things you can do is make a Will. They say nothing is certain except for death and taxes, yet over half of UK adults apparently don’t have a Will to help their families with the first on that list. If you haven’t already made one, make it a priority this year. If you have, it should be reviewed regularly as your circumstances change. Anyone with assets overseas may need additional specialist advice to determine whether a Will is required in each jurisdiction.

4. Tax matters

As discussed above, the other certainty in life is taxes so with your paperwork and records properly organised, you can now get ahead and investigate whether you are taking full advantage of any possible tax allowances and reliefs you could be entitled to. If you are UK resident, are you using your annual ISA allowance? Is your pension working most effectively for you? Apart from the well-promoted benefits of contributing to ISAs and pensions, some pensions can also be passed on to the next generations outside of your estate. You are currently allowed to put up to £40,000 into your pension each year, although this may be reduced if you have an income of over £240,000, or have already accessed part of your pension.

Tax relief can also be claimed against donations and subscriptions. So any professional subscriptions, annual memberships of charities, or donations to registered community amateur sports clubs may be tax deductible and can soon mount up. It is always worth ticking the gift aid box, which allows UK charities to claim back the basic rate tax already paid on donations by a UK tax-paying donor. If you are a higher or additional rate tax payer, you can reclaim tax relief on your gross contribution at 20 or 25% respectively.

The future tax landscape is very uncertain. While it is clear the UK government will need to consider tax increases to address the rapidly increasing national debt, as a result of COVID-19, the nature and timing of any changes is less certain. With talk of a wealth tax, increases to capital gains tax and reform of inheritance tax, now is an opportune time to review your financial affairs.

As ever, tax matters are notoriously complex and it always pays to take specialist tax advice to suit your own individual circumstances.

5. Looking ahead

Once you are on top of your current finances, you can make more informed decisions about your future goals. Whether you are planning to escape to the country, retire early, or leave a legacy for your children – you will have a clearer picture of how you can achieve it.

If you’re planning to make changes in your life, it is always worth discussing your values and aspirations with your family. It will help with succession planning and preserving your wealth across the generations to come, as well as avoiding any potential family feuds in the future. It is never too soon to start the conversation and we can help.

This has been a difficult year, but staying on top of your finances, looking ahead and planning for your own and your family’s future can be a great start for 2021. If you would like to discuss any aspect of your financial plans, please get in touch – our experienced wealth planners would be very happy to assist you in developing a personal wealth plan to help you and your family achieve your financial goals.

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how wealth planning can help them achieve their financial goals and objectives, or call +44 (0)1624 645000 to speak to our client services team.


If you would like to find out more about how we can help you with wealth planning support, please contact us on the same number as above, or complete the contact us form using the link below.

* UK consumer price inflation, Office for National Statistics, November 2020

Any examples of investments and structures used are for illustrative purposes only. The inclusion does not constitute an invitation or inducement to buy any financial investment or service. None of the content constitutes advice or a personal recommendation. Individuals should seek professional advice, based on their jurisdiction and personal circumstances, before making any financial decision.

about the author

John Williams

John Williams

John heads up the wealth planning proposition for the international business. He works with clients and their families, in tandem with their professional advisers, to ensure they have a clear financial plan in place to achieve their financial objectives. Working in partnership with our teams of private bankers, he integrates the benefits of wealth planning alongside our broader wealth management and wealth structuring capabilities.


John has over 25 years of advisory and management experience, working for global organisations providing solutions to a wide variety of UK and international clients. He joined from Credit Suisse UK where he was head of wealth planning for five years. He has also held similar senior roles at Barclays and UBS.

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