Top tips for a financial spring clean

Spring cleaning isn't just for the home. Use these tips from a financial expert to get your money matters in order for the summer.


Springtime is a good opportunity to get organised and declutter, and this is especially true after spending a prolonged period of time at home. With non-essential shops reopened and social restrictions continuing to ease, it’s worth getting your finances ready now. With consumer spending limited for most of the past year, it’s unsurprising that some people have actually seen their savings go up, not down in 2020. Indeed, figures from the Bank of England show that at the height of lockdown between April and June last year, households saved £54.6billion, setting aside an average of 29% of their disposable income.

Now is the time get things organised and set up good savings habits for the future. Whether you’re working out how much is needed to afford those plans you’re making after lockdown, or you have cash in savings that you can sweep into longer-term investments for yourself or loved ones, spending time to organise financial affairs now will be far more rewarding in the long run.

Here, Zoe Bailey, Chartered Financial Planner and Director at Tilney has shared some advice to have a financial spring clean and prepare for lockdown restrictions easing:

Emergency cash fund
  1. Declutter spending and set up an emergency cash fund

As we get closer to lockdown restrictions lifting, it can feel tempting to start planning expenditures on all the things we’ve been denied. However, before you rush into making those purchases on bigger ticket items it’s important to pause and get a clear understanding of your financial health. This will help you identify where you’ve experienced any losses last year and prevent you from overspending.  

In addition, what the pandemic really hammered home was the fact unexpected things can happen at a moment’s notice. Therefore, it’s also really key to set aside some of this cash you have accumulated as an emergency cash fund, no matter how small, should you ever need it and maintain your money-preserving and saving habits going forward.

Savings for children or grandchildren
  1. Organise savings for children or grandchildren

The pandemic has caused a tremendous amount of stress for university students as they’ve had to navigate periods of limited social interaction, virtual lectures, and continued mounting accommodation and tutoring fees. Indeed, most students are likely to graduate university with a large amount of debt, which they will be tasked with repaying throughout their early careers when they are unlikely to have any excess income. Therefore, now might be a good time to consider the other ways you, or other family members, can help financially – instead of them taking out further student loans or higher interest rate credit cards. If you were planning to gift assets to them over your lifetime or your Will anyway, then it could be more tax efficient for you to gift them this money sooner to help them start their working lives on the right footing and help them with their future, if affordable.

The key is to first find out which student loan plan, other sources and interest rates they have opted for or are liable for. That way you can determine whether it’s more beneficial to be debt-free now or to have a gift for a new car or a deposit for their first-home after university. Whether you’ve got children or grandchildren at university now, or are preparing other children or grandchildren for university, speaking to a financial planner ahead of time is the best way to plan the most efficient use of your savings to help their future and your overall tax efficiency.

Pension savings
  1. Sweep money into pension savings

For lots of people, getting their pension savings back on track post-pandemic is high on the list of priorities, and rightly so.  

If you have accumulated any excess cash on deposit that you can set aside for your future, do not forget to review your pension contribution annual allowance. If you have any more room to make further lump sum or monthly contributions, doing so can help these cash savings grow more than current cash rates and inflation, while also prioritising building your retirement pot this year. This is worthwhile no matter how young you are. Now is also a good time to review how your pensions fared last year. Are they in the correct risk profile for you, or do they need reviewing? Initial meetings with a financial planner to help you enact this task are at no cost and can help you review your options going forwards.

This pension savings message is even more critical for women to consider, especially with the disproportionate impact of Covid-19 on women’s savings and pensions. According to research by The Wealthiher Network, women in the UK are one and a half times more likely to have lost or resigned from their jobs than men over the course of the pandemic[1]. Taking significant career breaks to raise children, care for a relative or due to pandemic-related redundancy and unemployment are all key factors as to why there is a widening gap in either their state or personal pension contributions between men and women.

This year onwards, it’s going to be really important for women to adopt more of an active approach when it comes to their pension and prioritising their personal, longer-term savings in general in order to recover any financial losses. This will include knowing where their retirement savings are invested, how well these investments are performing and whether they are in a position to restart or even increase contributions.

Cashflow modelling with a financial planner is an efficient way to see how much money you’ll need to set aside for a comfortable retirement and how far off your finances are from achieving that goal. Speaking to a professional who’ll be able to talk you through your options is a critical step when thinking about your future.

Greener future
  1. Freshen up investments for a greener future

Despite the economic turmoil caused by the pandemic, demand for environmental, social, and governance-focused investing options has only increased. Indeed, the pandemic has brought a greater spotlight on the global challenges we all face such as the environment, healthcare, and our society more generally. Plus, with the Sustainable Finance Disclosure Regulation coming into force this month, it’s likely more environmentally friendly, socially responsible and good corporate governance (ESG) funds and the conditions of those funds will continue to improve throughout this year.

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