Financial tips for 2026 New year resolutions...

For most people, their workplace pension is their first exposure to investments. Understanding how your pension is invested, and how contributions are being made, is a great place to start.

If you’ve never selected any investment options, you’ll be placed into a default fund. Some providers use broad, balanced funds designed to suit most people. Others take more risk when they’re younger and gradually reduce risk (“de-risking”) as they approach retirement.[1]

The investment needs of a 35 year old differ significantly from someone in their 60s preparing to retire so it’s worth reviewing whether your pension setup actually aligns with your goals.

There are two things you should consider checking when it comes to tax relief and your pension:

• If your employer uses relief at source, higher-rate and additional-rate taxpayers must claim the extra tax relief from HMRC. You can backdate this for up to four tax years.
• If contributions are made via Salary Sacrifice, tax relief is given automatically because the contributions are taken before tax so there is no claim required. It is worth noting that the government recently announced in the 2025 Autumn Budget, that salary sacrifice payments above £2000 a year would be liable for national insurance contributions.[2] It is worth speaking to a financial adviser if this will affect you.

Giving your pension a “health check” means taking a closer look at several practical areas to ensure everything is working as hard as possible for your future. This includes reviewing your contribution levels to confirm they’re sufficient for your retirement goals, checking charges and fees to avoid unnecessary erosion of your savings, confirming your tax relief position, and making sure your beneficiary nominations are up to date.

Protection: Is it a necessity?

What if you become too ill to work or die unexpectedly? Many people buying a home are encouraged to take out life insurance to cover the mortgage. That’s useful but often incomplete.

Most employers offer a Death-in-Service benefit, typically paying a multiple of salary to a beneficiary. (Check that your beneficiary nomination reflects your current circumstances, it is sometimes restricted to a legal spouse.)[3]

Your workplace pension can also be left to a nominated beneficiary. Combined, these can provide substantial support to loved ones if you die.

You may also have little ones and would like to ensure that they are not financially disadvantaged by your death. A Family Income Benefit policy could be the solution to pay a tax free income for 20 years from death of a 35 year old healthy person, this can be around than £14 a month for £2,500 a month.[4] The proceeds can help cover the associated costs of children in addition to clearing a mortgage as a lump sum. Just remember that the actual cost and level of cover will depend on your circumstances, and whether this type of protection is suitable for you should be assessed as part of a full financial planning and protection review with a financial adviser.

Statutory Sick Pay in the UK is £118.75 per week up to 28 weeks.[5] After that, those unable to work may receive Employment Support Allowance (ESA), with the main rate capped at £140.55 per week after assessment.[6]

For most households, these amounts simply won’t cover mortgage payments, bills, food, and additional costs that often arise during illness. Without proper protection, savings can be wiped out and relationships put under strain.

Income protection is often overlooked, but it can be surprisingly affordable. A healthy 35 year old male can often insure £1,500 a month of income (starting after three months off work) for sometimes less than £30 a month.[7] Many people only consider this after something has already gone wrong and at that point it may be difficult or more expensive to obtain cover.

Am I doing the right thing?

Understanding what you want from life is as important as preparing for the future. Knowing the difference between your essential costs and your nice-to-have spending can make your financial habits clearer and more intentional.

You may have people dependent on you, and it is important that they are considered, but also it is important not to disregard your own needs. Prioritising your own long term financial security in retirement could be more important than stretching your finances to gift a lump sum to your children.

Thoughtful planning of your budget, your pension, and your insurance can make 2026 the year you lay strong foundations for a comfortable future while protecting yourself against unexpected bumps along the way.