7 New Year tips for investors

The start of a new year often feels like a fresh chapter – a time to reflect on areas of your life, reset where needed and plan for the year ahead. Your financial health should be one of those areas.

But instead of chasing lofty goals or resolutions, which often fall by the wayside before January ends, why not focus on practical steps that truly make a difference? 

These tips for investors aren’t about overhauling your life. They’re simple, achievable actions that either require a one-off effort or fit easily into your routine.

Here are seven ways to help you get your finances in order for 2026:

1. Review your expenses

The new year is a great time to review your finances and starting with something as simple as understanding your day-to-day spending can set you up for success. 

Start by listing all of your monthly costs – everything from your mortgage, food and utility bills to your council tax, insurance and childcare. That way, you can identify what needs to be accounted for and where you can save money.

For example, cancelling monthly subscriptions to things you don’t really use or need can make a big difference to your disposable income.

Once you get a handle on your everyday spending, you’ll feel more confident about taking on bigger financial goals. It’s all about knowing what you need and seeing just how much you can achieve.

2. Check you’re on track to meet your goals

If you haven’t recently done so, consider if your goals are still the same. Do you have any new priorities? Are you still on track to achieve your current goals or could you invest a little more money each month? For long-term goals, the earlier you start investing the better. This is principally due to the power of compounding, when you earn returns on the money you invest as well as on the returns themselves.

Another way to leverage the power of compounding is to invest regularly and increase your contributions over time, particularly if you’re not on track to meet your goals. Even a seemingly small amount can make a huge difference over the long term. For example, investing £50 a month could be worth an extra £20,000 after 20 years, assuming a return of 5% a year after costs.

3. Make the most of your ISA allowance

Recent Budget announcements mean it’s more important than ever to ensure you’re investing tax efficiently. 

In November, the chancellor announced that income tax thresholds will be frozen for another three years until the end of the 2030-31 tax year. When income tax thresholds are frozen, the amount of income you can earn before you start paying tax at higher rates stays the same, even as salaries or the cost of living go up. So, as your income rises, you might cross into a higher tax bracket and end up paying more income tax.

A simple way to reduce the impact of frozen income tax thresholds is to make the most of your ISA allowance. Income from investments in an ISA is tax free, which means it won’t push you into a higher tax bracket or result in a bigger income tax bill. 

Dividend tax changes also formed part of the Budget. Currently, basic-rate taxpayers pay 8.75%, higher-rate taxpayers 33.75% and additional-rate taxpayers 39.35% on dividends¹ that exceed the annual tax-free allowance of £500. From 6 April 2026, these rates will rise to 10.75% for basic-rate taxpayers and 35.75% for higher-rate taxpayers. The rate for additional-rate taxpayers will stay at 39.35%.

To reduce the impact of the dividend tax increase, you could consider moving more of your investments into an ISA, a process called ‘bed and ISA’. When you initially sell your investments, you’ll be liable to capital gains tax (CGT) on profits that exceed your CGT allowance (currently £3,000). However, once your investments are inside the ISA wrapper, they are sheltered from tax. Bear in mind that bed and ISA transactions will count towards your £20,000 ISA allowance.

4. Don’t forget about saving for retirement

Even if retirement feels a long way away, it pays to think about it today. For example, paying more into your pension earlier means more money to work harder and more time for long-term growth, regardless of whether you have a workplace pension or a SIPP. If you contribute £100 a month (including tax relief) from age 20, you’d have a pot worth almost £150,000 after 40 years, assuming a return of 5% a year after costs. But if you wait until you’re 30, you’d need to save around £180 a month to achieve the same amount.

There are several benefits that come with saving into a pension, so make sure you’re using those that apply to you. For example, it’s worth checking to see if you’re maximising your employer pension contributions.

Many employers will match or even exceed your contributions up to a certain percentage of your salary, which could make a huge difference to your retirement savings.

Pension contributions also benefit from tax relief from the government. For employees, some of your money that would have gone to the government as income tax goes into your workplace pension instead. If you have a self-invested personal pension (SIPP), the government will top up your pension by 20%, so for every £80 you contribute, you’ll get a top-up of £20. If you’re a higher-rate or additional-rate taxpayer, you can claim back an additional £20 or £25, respectively, via your self-assessment tax return. The most you can pay into your pensions each year and receive tax relief on is £60,000 or 100% of your gross relevant earnings, whichever is lower².

5. Tidy up your pensions

If you’ve worked for lots of different employers during your career, the chances are you’ve probably accumulated several pension pots along the way.

Managing multiple pots can be a headache, but an easy way to navigate this is by combining them. This can help you save on costs as you only have one fee to pay meaning you have more money to enjoy in retirement. One bigger pot rather than several small ones can also help motivate you to manage your pension better as it reduces admin and makes it much simpler to implement one investment strategy to help you reach your goals. 

However, make sure to check if any of your pots have exit fees or valuable guarantees, such as guaranteed income or protected tax-free cash sums. Read our article to find out if combining your pension plans is right for you.

It’s also worth regularly checking if your contact details and any named beneficiaries are up to date. Under current rules, pensions do not form part of your estate and, as such, they are not covered by your will. So make sure your pension provider knows who your beneficiaries are.

6. Make sure you are fully invested

Do you have excess cash building up in your investment account? This may be because of the income paid by some funds or it may be because you were sometimes unable to buy an exact number of fund units each time you funded your account. Holding too much cash can end up being costly.

Now is a good time to check if you have any cash in your account and to make sure this money is fully invested. After all, it’s time in the market and not timing the market that counts most in the long run and every little helps.

7. Invest in a way that works for you

There’s no one-size-fits-all when it comes to investing. Some people like to be fully engaged and active with their investments while others prefer a ‘set and forget’ approach. Either way, investing is not as complicated as it seems and you certainly don’t need to be a financial expert. 

At Vanguard, we offer a range of services to help you get started. If you want a helping hand, or don’t have the time or experience to manage your investments, we offer a managed service for those investing via an ISA or personal pension. We’ll select a portfolio of investments for you, based on your attitude to risk.

Alternatively, you can build your own portfolio from our range of over 85 low-cost funds. Or you can keep things simple with an all-in-one solution, such as our LifeStrategy funds or Target Retirement funds, which combine different types of investments in one ready-made portfolio.

¹ Dividends are the payments some companies make to their shareholders out of their profits.

² For more on what counts as ‘relevant earnings’ that can earn tax relief when used to fund a pension, see the HMRC Pensions Tax Manual. Your annual allowance might be lower than £60,000 if you have a high income or you’ve already flexibly accessed your pension pot. To work out if you have a reduced (tapered) annual allowance, see HMRC’s website. If you’ve flexibly accessed your pension, you can work out what your alternative annual allowance is here.