World Financial Planning Day on 9th October 2024 is the perfect moment to take stock of your financial situation and plan for the future. So, what is World Financial Planning Day? Perhaps it will be the moment you choose to bolster your pension, navigate the changing tax landscape, or simply gain better control over your money. Here are four concrete steps you can take to help achieve long-term financial stability.

What is World Financial Planning Day?

World Financial Planning Day is an annual event aimed at promoting financial literacy and encouraging individuals to take control of their financial health. It is organised by the International Organisation of Financial Planning (FPSB) in partnership with various national financial planning associations. It provides a platform for financial planners worldwide to offer guidance, resources, and information on managing personal finances effectively.

The goal of World Financial Planning Day is to raise awareness about the benefits of financial planning, help individuals understand key financial concepts, and provide strategies for achieving long-term financial stability. Topics typically covered include budgeting, retirement planning, investment management, tax planning, and estate planning.

It serves as an opportunity for people to reassess their financial situations, set new financial goals, and consider seeking professional advice to better secure their financial futures.

Here are four strategies to help you make the most of this day to get you started.

1. Maximise Pension Contributions and Tax Benefits

With recent changes to pension allowances, now is a great time to consider boosting your contributions. The annual allowance has increased from £40,000 to £60,000, giving you more room to save for retirement while reducing your tax liability. Additionally, the tapered annual allowance and the money purchase annual allowance have both been raised from £4,000 to £10,000.

If you’re a higher earner, this means you can contribute more without being penalised, even if your income exceeds £260,000. Review your current contributions to make sure you’re taking full advantage of these allowances, especially if you have spare cash to invest. Maximising your pension contributions now will not only shield more of your income from tax but also boost your retirement savings pot, helping to future-proof your financial well-being.

2. Reconsider Your Financial Goals in Light of Rising Costs

With inflation pushing up the cost of living, it’s wise to revisit your financial goals. Are your spending and saving habits still aligned with your long-term plans? Maybe you were aiming to buy a house or set aside more for retirement, but increased day-to-day expenses have made these targets feel out of reach.

If that sounds familiar, it’s time for a recalibration. Start by taking a closer look at your budget. Identify areas where you can cut back without compromising your lifestyle and divert those savings into your longer-term goals. Small adjustments, like reducing discretionary spending or shopping around for better utility rates, can add up over time, giving you more flexibility and helping you stay on track despite rising costs.

3. Use Your ISA and Capital Gains Tax Allowances

For the 2024/25 tax year, make sure you’re making the most of your ISA allowance, which allows you to invest up to £20,000 tax-free. With interest rates on cash ISAs remaining low, you might want to consider stocks and shares ISAs for better returns – especially if you have a longer investment horizon.

Another important point to keep in mind is the sharp reduction in the capital gains tax allowance, which has dropped from £12,300 to £3,000 this year. This means many investors will be caught out by unexpected tax liabilities if they don’t plan carefully. Take this opportunity to review your investment portfolio. It might make sense to spread gains across different tax years or consider transferring assets to a lower-taxed partner to stay within the new allowance.

4. Regularly Review and Update Your Will and Estate Plan

When was the last time you reviewed your will? It’s an easy thing to overlook, but an up-to-date will is vital in ensuring that your assets are distributed according to your wishes and can prevent future complications for your family.

If you’ve experienced any major life changes recently – like buying a new property, having children, or getting married – it’s a good idea to revisit your estate plan. This ensures that everything is still set up correctly and that your loved ones are provided for in the way you intended. A little time spent on this now could save your family from potential legal and financial headaches down the line.

Take Action This World Financial Planning Day!

World Financial Planning Day is about more than just checking off to-do lists – it’s an opportunity to take charge of your financial well-being and build a solid foundation for your future. Whether it’s boosting your pension, exploring new investment opportunities, or simply making sure your affairs are in order, taking proactive steps now can set you on the path to achieving your financial goals.

And remember, you don’t have to do it alone. If any of these strategies seem complex or you’re unsure where to start, consider reaching out to a financial advisor for personalised advice. Investing a little time in planning today can yield significant rewards tomorrow.