10 useful financial jobs you need to do during your Christmas break

7 December 2021

Thanks to the fact that Christmas is at the weekend this year, many people will be able to enjoy a few days break during the festive period.

Once you’ve eaten your last mouthful of turkey curry or Christmas pudding, you may find yourself with a little bit of time on your hands at home.

So, it could be the idea time to get some of your “life admin” done. Here are 10 financial jobs you can get your teeth stuck into over Christmas and the new year.

1. Review your protection

You’ve previously read about why some of the myths surrounding life insurance and other types of protection are often inaccurate and misleading. But when was the last time you reviewed the life, health and income protection you have in place?

Major life events such as changing employers, having a child, getting married or divorced can mean it’s time to change your levels of cover. For example, perhaps you’ve moved job in 2021 and your benefits package has changed?

This is a great time of year to review your protection policies to ensure you have the appropriate cover. And, when you review your cover, check if your life assurance is in trust. If it isn’t, consider placing it in trust to ensure that, when the payout is made, it doesn’t automatically form part of your estate or your beneficiary’s estate on your death.

2. Go through your direct debits

Spend half an hour this festive season looking through your bank statement and work out if you can make any savings.

Do you still read that magazine? Watch the TV you’re paying for? Or are you paying over the odds for insurance, utilities, or even your bank account itself?

An annual review of your direct debits can help you curtail any unwanted expenditure – and then consider diverting those savings to your pension or ISA.

3. Update your pension death benefit nominations

Your pensions will normally not form part of your estate for Inheritance Tax purposes, which means your will won’t dictate what happens to them when you pass away.

So, to specify who you would like to receive your pension on death, you need to have a pension death benefit nomination (sometimes called an “expression of wish” form) in place.

It’s always a good idea to regularly check your nomination forms to ensure they are up to date. For example, if your circumstances have changed since you started paying into your pension (perhaps you have got married or divorced) then you may need to review your arrangements.

Contact the pension provider/administrator, obtain the relevant form, and make sure your beneficiaries are up to date.

4. Check your Power of Attorney is up to date

You recently read about why it’s so important to put a Lasting Power of Attorney (LPA) in place.

Just as you need to ensure your death benefit nominations reflect any changes to your circumstances, your LPA should also be up to date.

Your LPA is designed to ensure your finances are dealt with in accordance with your wishes at a time when you’re still alive, but unable or unwilling to manage your own affairs.

Check that you are still happy with how it is written and that any stipulations you made at the time it was originally drawn up remain appropriate.

If you don’t currently have a Lasting Power of Attorney in place, now’s a great time to set one up. You can only set up an LPA while you have mental capacity so, if you delay, it could be too late.

5. Create an In Case of Emergency document

An “In Case of Emergency” (ICE) document contains all the information your loved ones may need to know in an emergency. It will typically contain:

• Contact details for your accountant, solicitor, and financial planner
• Details about where important documents such as your will and LPA are kept
• Information about any insurance policies you have and where you keep the documents
• Bank and savings account information, as well as details of all the investments you hold.

If you haven’t done so already, it’s worth taking time to put all the important information into one document. This makes it easy for your family to deal with your affairs should something unexpected happen to you. It also ensures nothing gets missed.

6. Establish your State Pension eligibility

Your State Pension will provide a guaranteed, inflation-proofed income once you reach the State Pension Age. While it may not be enough for you to live the lifestyle you want, it will provide a useful regular income.

So, if you know how much pension you might receive it can help you to plan your retirement.

The new State Pension is based on your National Insurance contributions (NICs) record. You’ll receive the full amount if you have 35 or more “qualifying years” – years where you have been in full-time employment, or where you received National Insurance credits.

Head to the government website to find out what State Pension you are entitled to, and when you might receive it. If you won’t receive the maximum, you might be able to take steps to pay additional NICs to “buy” extra years – speak to us to find out whether this is likely to benefit you.

7. Think about making gifts

Christmas is a season of giving so, at this time of year, you might want to make a financial gift. Making such a gift from capital is normally considered a potentially exempt transfer (PET). This means that, if you were to pass away within seven years of making the gift, it would typically form part of your estate for Inheritance Tax purposes.

Remember that each individual has an annual gift exemption of £3,000. This allows you to make an outright gift each tax year up to this amount, and this gift is exempt from your estate for Inheritance Tax purposes.

If you have the disposable income to do so, you can also make gifts out of your income. These could also be immediately exempt from Inheritance Tax provided:

• You make the gifts from your disposable income
• Your intention is to establish a regular pattern of gifting
• The gifts do not adversely impact on your standard of living.

Keep careful notes of any such gifts as your beneficiaries will have to prove the three points above when you pass away.

8. Check your will is up to date

Research by Will Aid has found that almost half (49%) of adults in the UK have not prepared a will.

By writing a will, you can you ensure that you leave your possessions, money, and property to the people of your choice. It also enables you to appoint trusted guardians for your dependent children.

Even if you do have a will, you should regularly review it to ensure the provisions are still applicable to your current circumstances. For example, if there’s another child or grandchild in your life, or you have married or divorced, you might need to update your bequests.

9. File your tax return

If you’re self-employed, an employee earning income in addition to your PAYE salary, or you want to claim certain tax reliefs, you need to remember to fill in your self-assessment tax return before the deadline.

The date for online returns is 31 January 2022. Remember that HRMC will charge a penalty starting from £100 if you file your return late.

Take time over the Christmas break to submit your return. And, if you’re a higher- or additional-rate taxpayer, don’t forget to claim your additional pension tax relief when you submit your return.

10. Book your financial review

One of the benefits of developing an ongoing relationship with a financial planner is that they can undertake a regular review to ensure your plans remain on track.

So, if it’s been a year or more since your last financial review, start the new year by chatting about your plans and goals with your financial planner, or consulting a trusted expert for the first time.

Get in touch

If there are any financial tasks you’d appreciate help with, please get in touch. Email info@depledgeswm.com or call 0161 8080200.