New Year, New Goals: Setting your wealth priorities for 2025

Save yourself from another round of broken New Year promises to hit the gym more or cut out chocolate. Instead, make 2025 the year you improve your financial future with these 5 priorities.

1. Understand the retirement you wish to achieve

Planning for a successful retirement requires first understanding what your goals are. We all dream of retiring early, but have you ever put much thought into how you'll actually fill your time in retirement? Without doing so it’s difficult to establish how much income you need to achieve that lifestyle and work backwards to understand how much you’ll need to save in the first place.

An independent financial adviser will help you identify your retirement goals and build a clear picture of the route to achieving them. Ascot Lloyd's financial advisers have access to sophisticated cash flow modelling tools which take into account many factors to calculate how much income you'll require in retirement, adjusted for things like inflation and future care needs.

2. Investing for the future

If the interest on your savings is lower than the current rate of inflation, the value of your money is in fact decreasing in real terms.

Compound interest is a powerful thing and if you're not taking action to make it work for you, it’s likely working against you. Investing in higher-yielding assets, matched to your risk profile, can help the value of your savings outpace inflation so you achieve a more prosperous retirement.

3. Save in the most tax efficient way

Once you’ve established that investing your savings can help you meet your retirement goals, you’ve then got to decide how to hold your investments. Investing through a general investment account will require you to pay tax on capital gains you make when you come to sell or any dividends you receive (beyond annual allowances), which could hinder your compound growth.

If you really want to maximise the growth of your investments, it’s important to invest in a tax-free wrapper. The two most prominent and powerful wrappers are pensions and Individual Savings Accounts (ISAs). Each comes with its own benefits and drawbacks, as well as rules and limits on how much you can pay in and what tax you’ll pay when you come to take it out. A financial adviser will work with you to build the most tax-efficient way to plan for your retirement.

4. Preserve your legacy

Effective tax planning doesn’t just seek to reduce the amount of tax you need to pay throughout your life, but also when you die. Inheritance tax is a 40% charge on the value of your estate beyond your nil rate band (currently £325,000, with a possible further £175,000, subject to conditions, if you leave your home to a direct descendant. This means married couples and civil partners can have up to £1 million of NRBs for their combined estate.). The IHT is payable by the executors of your will before your beneficiaries can access what you left them.

If you want to maximise how much of your legacy goes to your loved ones rather than the taxman, there are numerous ways to mitigate the IHT due on your estate when you die, including gifting, trusts and investing in business relief qualifying assets. A financial adviser will evaluate your individual situation and goals to present the more suitable and effective strategy.

5. Protect your family

Death is an uncomfortable conversation to have, yet ensuring your family is protected financially should something happen to you is a vital consideration. This makes insurance a crucial part of a financial plan – and yet many people overlook it, leaving families vulnerable following a death.

Failing to write a will, or appoint a lasting power of attorney to manage your affairs when you are no longer capable yourself, can also leave your family exposed and facing unnecessary stress at an already difficult time, so don’t neglect to do it.

Choosing the right life assurance policy and ensuring you are covered for everything you think you are, can be a complex undertaking, so speak to a financial adviser if you are unsure. Likewise, working with both a solicitor and a financial adviser when making a will and lasting power of attorney can ensure you are making all the right financial as well as legal decisions.

Ascot Lloyd's Independent Financial Advisers are experts across the full breadth of financial planning including tax, legacy, protection and investing. To discuss your wealth priorities, contact your adviser or get in touch to book a free callback with our Client Services team.