Money decisions to make now for a better 2026 - from inflation to savings and spending
From grasping the concept of inflation to mastering your savings strategy, financial share six essential steps for a more prosperous 2026. It might feel premature to consider next year, but in the realm of personal finance, today's choices could shape your financial future.
For those aiming to replenish their savings, delve into investments, or simply understand the financial forecast for the coming year, the consensus among experts is clear: taking action now can have significant benefits. In other news, state pension warning for millions of Brits who are between two specific ages.
Here are six proactive measures you can take to ensure a financially brighter 2026.
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Clarify your financial goals
Managing money without clear objectives is like navigating without a map. Determining your financial intentions is a crucial step in 2025. "Write down your own financial priorities in life – whether it is being debt free, helping your children, or having enough money to retire – and allocate a specific amount of your disposable income to these priorities," advises Iain McLeod, head of private clients at St. James's Place.
McLeod suggests seeking professional advice if you're uncertain: "Seek financial advice to ensure that these savings are working harder for you – from a taxation and investment perspective."
"The worst move is to do nothing," he warns, "the second worst move is to follow a flow chart – everyone's circumstances are as unique as their fingerprint," he explains.
Deciding whether to save, invest, or spend
It can be tricky with inflation still above the Bank of England's target and interest rates at 4.25% and it might feel like a dilemma between hoarding cash and splurging on big-ticket items before prices climb further. However, trying to time the market or predict interest rate moves is not the key.
"The best approach is to focus on what you can control," advises McLeod. He explains: "Once you have balanced how much you would like to spend and how much you can afford to save, you are in a stronger position to commit savings to longer-term investments. This provides the foundation of a longer-term plan, which can be resilient against shorter-term shocks in the markets."
Or as James Ballinger, a financial planner at TrinityBridge, succinctly puts it: "2025 is no different from any other time [...] Generally, if you are younger in age or still haven't reached financial independence, you should be looking to maximise savings and investments – whilst still enjoying life!".
Start with what you already have
For those just starting out with investing, it's important not to be swayed by market fluctuations or the allure of quick profits. Instead, consider what financial arrangements you already have. "The best area to start is always with cash," suggests McLeod. "How much do you need readily available at the bank for emergencies such as house repairs, large expenditures such as holidays, or simply an amount that gives peace of mind?".
Long-term objectives should guide your financial strategy. "Start with the end in mind – how much do you realistically need to save in order to meet your retirement goals?" he advises. He also emphasises that "diversification should be a core principle [...] it is generally the safest way to achieve longer-term investment goals".
Ballinger concurs that saving mechanisms can be straightforward. "ISAs and pensions are both tax-efficient ways to save for the future," he notes, adding that "more basic than that, having a separate bank account that you earmark for saving, can help to avoid overspend."
Rebuilding your savings without feeling skint
Replenishing your savings doesn't have to entail giving up all life's pleasures if you've recently tapped into them. "A lot of planners will talk about 'paying yourself first'," Ballinger mentions, referring to the practice of automatically transferring money into savings as soon as you receive your pay. "This creates discipline and forces you to adapt to your remaining budget through the rest of the month."
Budgeting tools can be beneficial. Ebony Cropper, a money-saving expert at Money Wellness, recommends using banking apps or online resources to monitor your spending habits.
"People are often surprised to find they're spending hundreds a month on things they don't actually need, like forgotten subscriptions, daily coffees or impulse buys. Just cutting £5 a day could save over £1,800 a year," he says.
Don't overlook the upcoming changes set for 2025 and beyond
The financial landscape is ever-evolving, with tax thresholds and pension rules among the areas subject to change – and not always to your advantage. "The 2024 autumn Budget introduced a number of changes that could impact savers in the future," McLeod points out.
He highlights that Capital Gains Tax has increased, and from April 2025, the Stamp Duty threshold in England and Northern Ireland will be reduced from £250,000 to £125,000. "First-time buyers will also be impacted, with their stamp duty threshold dropping significantly from £425,000 to £300,000."
McLeod further warns that "unused pension funds and death benefits will be included in the value of a person's estate for Inheritance Tax from 6 April 2027." He advises those affected to consult a financial adviser without delay. Ballinger anticipates another government Budget this autumn and suggests, "we may see further changes to tax then".
Take advantage of existing schemes and benefits
However, it's important not to panic about future changes. There are still many government schemes and benefits that remain underutilised.
Cropper reveals that "Over £23bn in benefits goes unclaimed every year," She explains that even higher earners might be eligible for support based on factors like childcare or housing costs. "Someone earning £30,000 with two kids and high childcare costs could be entitled to hundreds of pounds in support."
She also encourages people to explore cashback schemes and to verify their tax code, cautioning that "errors can cost you hundreds". For individuals with limited resources, she advocates the Help to Save scheme as a smart choice: "Save £50 a month and you'll get £600 in bonus payments over two years – and £1,200 if you keep it going for four. That's a 50% return, completely risk-free."
The financial habits you establish today – from more intelligent budgeting to savvy use of tax wrappers – will yield dividends not just in 2026, but for many years to come. As McLeod puts it: "The best time to plant a tree was 20 years ago. The second best time is now."
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