The start of a new year is a perfect opportunity to take stock of your financial situation and lay solid foundations for the year ahead. With the festive chaos now behind us, January offers the mental reset many of us need to consolidate, simplify and focus.

This six-step checklist is designed to help you get ahead of your finances in 2026, so you can spend more time doing the things that matter most.

1. Inheritance Tax: Are You in the Firing Line?

The IHT nil-rate band remains frozen at £325,000 until 2031 and the residence nil-rate band is unchanged at £175,000. In real terms, that means more estates are being pulled into the IHT net as asset values continue to rise. If these thresholds had increased with inflation since 2010, they’d be well over £500,000 by now.

And from April 2027, most unused pension funds will be brought into the IHT net on death, overturning one of the most valuable estate planning tools of recent decades. If you’re relying on your pension to pass on wealth tax-free, it’s time to revisit your plan.

Tip: Get a clear understanding of your IHT exposure and make use of available exemptions (such as the £3,000 annual gifting allowance, normal expenditure out of income and the small gifts exemption).

Update your Will and consider strategies such as trusts or life cover in trust to meet future liabilities.

2. Run a Quick Audit on Your Direct Debits

It’s astonishing how many forgotten subscriptions and small payments continue quietly in the background. Reviewing your bank statements can often reveal long-defunct memberships, duplicate services or charges that have crept up without warning.

Tip: Use your banking app or tools like MoneyDashboard, Emma or Snoop to highlight unused subscriptions. Set a recurring quarterly reminder to reassess and cull what no longer adds value.

3. Pension Check-Up: Are You Being Lifestyled?

Many workplace pensions automatically move your investments into lower-risk funds as you approach retirement – a process called “lifestyling.” This may suit some, but for others it could mean unnecessarily dampening long-term growth.

Given the changes to the pension landscape, including the abolition of the Lifetime Allowance and the introduction of the £2,000 salary sacrifice cap from 2029, this is a good time to make sure your retirement plan is aligned with your goals.

Tip: Review whether lifestyling applies to your pension and assess whether it suits your time horizon and risk appetite. Consolidating old pensions could reduce fees and simplify your planning.

4. Understand and Maximise Your Workplace Benefits

Do you know the full extent of the benefits your employer offers? Many high earners are leaving money on the table by not maximising pension matching, share schemes or private healthcare perks.

Tip: Increase your pension contributions up to your employer’s maximum match. Small increases now can compound significantly over time. Also check for overlooked benefits like financial education, wellbeing services or insurance cover.

5. Will You Fall Into the 60% Tax Trap?

If your income is between £100,000 and £125,140, you’re effectively paying 60% tax due to the tapering of the personal allowance. This is still one of the most punishing quirks in the UK tax system.

Tip: Consider making pension contributions or charitable donations to bring your taxable income below the threshold. This can help reduce your tax liability while supporting your long-term goals or favourite causes.

6. Review Your Investment Strategy

After a strong year in the markets in 2025, portfolios may be skewed toward certain sectors or regions. The beginning of the year is a good moment to rebalance and ensure your investments are still aligned with your goals.

Tip: Review your ISAs, pensions and taxable accounts for diversification, risk levels and fees. Consider topping up your ISA before year-end (£20,000 limit for 2026/27). And don’t overlook tax-efficient vehicles like VCTs or EIS if suitable.

Conclusion

January is an ideal time to get on the front foot financially. You don’t need to overhaul everything overnight, but a few thoughtful moves now can save you time, money and stress later. If you’d like help reviewing your strategy for 2026, book a call with me or Adam Walkom and we’ll help you start the year with clarity and confidence.

Click here to book a call today.

Adrian Johnson