For many, the New Year can provide an opportunity for change. While resolutions can be difficult to stick with, there are a few ways to help make sure you start the year on a positive financial footing.
Set your goal and track progress.
Everything starts with a goal – so what’s yours?
For investing, you may wish to consider what outcome you want. If it is a financial goal in the shorter term, typically five years or less, a Cash ISA could be more suitable. If your goal is five years or more, you might want to consider investing in a Stocks & Shares ISA.
For a longer term goal such as retirement, a detailed plan can not only give you a goal to work towards, but potentially help you get there by recommending the most suitable pensions and investments for your circumstances.
Remember, pensions have access restrictions – you can’t currently access your pension until you’re at least 55 (this is set to rise to 57 in April 2028). However, you will typically benefit from tax relief of at least 20%, depending on your personal tax band.
Take advantage of your disposable income.
Tracking your investments over time is a useful way to stay motivated towards your goal, and making extra contributions to your investments when you have spare money at your disposal could potentially help you stay on track.
Making little and often contributions into your investments lets you potentially benefit from pound-cost averaging and compound growth.
Did you know as part of the technology you have access to you can set reminders to impulseSave®, or set up a regular contribution through a direct debit?
Whether you would rather impulseSave® when you have spare income, or if you would rather structure your contributions with a monthly direct debit, there are actions you can take to be pro-active in building up your investments over the long-term.
It’s important to remember that with investing, your capital is at risk. The value of your investments may fluctuate, and your investments can go up as well as down.
Take advantage of your annual tax-free allowances.
Every year you are given tax-free allowances for your investment products and this currently breaks down to £20,000 for your ISA and up to £60,000 for your pension. This means that you can contribute up to this limit during the 2024/25 tax year to protect your money from Income and Capital Gains Tax.
The new year provides an opportunity for you to use your allowances to potentially unlock more tax-free growth for your investments.
Additionally, you can also pay £4,000 into a Lifetime ISA in a tax year until you’re 50, separate from the tax-free ISA allowance. However, you must make your first payment into your Lifetime before you’re 40.
Consider consolidating your investments.
Another step you could consider to help you grow your wealth in 2025 could be consolidating any other pensions into your True Potential Pension.
By merging multiple pots into one, you could potentially reduce your fees, streamline your investments, and take better control of your retirement planning to help master your money in 2025.
Some pensions have benefits that would be lost if you transferred your pot, therefore it’s important that you speak to an expert before making this decision.
It’s worth taking into account that consolidating your pensions might not always be the best course of action. Some Pensions might contain guarantees that would be lost on transfer or benefit from low costs that can’t be matched elsewhere.
You can also lose any possible annuity rate if you change to another type of pension or even a different annuity provider.
Stay the course.
As an investor, it can feel uncomfortable in the short term when world events disturb markets, yet taking a long-term perspective can be useful.
For example, the second half of last year saw a whole host of events to navigate. While on a political level we had the US presidential election and first UK Budget under the new Labour government, the war in the Middle East and a fundamental policy pivot in China added to the mix meant the final quarter of 2024 was anything but dull.
Disciplined and consistent behaviour can help build towards the achievement of long-term goals. At the same time, keep in mind that staying invested isn’t always best for everyone, as this will be dependent on your circumstances. If you are unsure you should speak to a financial adviser.
The importance of completing an Investment Review.
Your annual Investment Review gives you the chance to examine your current situation by reviewing the investments and pensions you hold, as well as progressing towards your long-term goals. Your circumstances can easily change and it’s important to address these changes and adapt accordingly.
With your review, you’ll see an overview of your investments and their total value, as well as tracking how the value has changed over the last 12 months.
When due, we’ll send you a letter, email and text letting you know. Completing your review is simple – just log in through your app or online account and you’ll see a banner on the overview page.
Upon completion, we’ll produce an Action Plan personal to your circumstances and this is available in your app and online account at any time.
Stay informed with the latest insights.
Once you’ve set your investment habit and are in a regular routine, it can be useful to seek out knowledge around your investment and investment products, engaging with the latest news and insights that could affect your goals.
Each week we share our views on the top investment and economic news, the latest from True Potential, and ways you can do more with your money. You can catch every episode by subscribing to our True Potential YouTube Channel.
You can also view the latest blogs, morning markets, commentary and market insights by logging into the True Potential App.
Take advantage of our advice offering.
Finally, if you are a True Potential Wealth Management client and need assistance with your financial plan, investments or account, we’re here to help. We cover a range of services from tax, savings and investments to retirement, pensions and more.
On the app, select the ‘Advice Services’ page near the top of your screen. If you’re logging in via your online account, select the menu on the left-hand side of your screen and click ‘Advice Services’.
We’re always here to help you do more with your money and investments. Click below to view our latest Do More With Your Money podcast as our expert panel expand on the key areas mentioned in this blog with their guide to financial success in 2025.
With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest. This material is not a personal recommendation or financial advice and the investments referred to may not be suitable for all investors.
Tax is subject to an individual’s personal circumstances and tax rules can change at any time. You can only invest in one ISA during a tax year.
You should ensure your contribution does not result in your total Pension contribution within the tax year exceeding £60,000 or 100% of your earnings, whichever is lower. Pension eligibility and tax rules apply.
True Potential Wealth Management is authorised and regulated by the Financial Conduct Authority. FRN 529810. Registered in England and Wales as a Limited Liability Partnership No. OC356611.
True Potential Investments LLP is authorised and regulated by the Financial Conduct Authority. FRN 527444. Registered in England and Wales as a Limited Liability Partnership No. OC356027.
