Five financial resolutions for 2012

1. Tackling inflation

Bank base rates have been sitting at an all-time low for a couple of years now, so those of us with deposit savings are struggling to get a positive return against inflation.

A basic-rate taxpayer needs to get an interest rate of about 6% to ensure their money maintains its buying power – and those rates just aren't available. So to combat the effects of inflation:

Make sure you have used your cash ISA allowance, as its tax-free status helps to close the gap between the interest rate earned and the inflation impact.

Check out our weekly round up of the best cash ISA rates on the market.

Also consider investing longer-term in a tax-efficient stocks and shares ISA, which has the potential to produce higher returns. You can invest for growth or income, depending on your needs. Of course, you should ensure you are comfortable with the increased risk associated with stocks and shares compared to cash.

2. Remortgaging

What creates disappointment for savers is an opportunity for borrowers. It's still quite tricky for first-time buyers to get a sensible rate without a 10% plus deposit required. But if you're already a homeowner with 20% or more equity in your property, you could save money by remortgaging.

This may help to offset other living costs which have been escalating, or you could use the savings to overpay into your mortgage - thereby paying off your mortgage debt sooner.

Five tips to help you remortgage

3. Diverse investing

With ongoing concerns about the euro, market volatility may continue so it's worth checking how any investments you have are performing, including your pension. Bear in mind that investing in a well-diversified mix of underlying investments can help to combat the impact of market volatility.

Risk managed funds, for example, are a straightforward way of investing in different asset classes and balancing risk and reward. Also ask yourself the question, do your investments still match your risk appetite?

Where should you invest in 2012?

4. Annuities

If you are approaching retirement and have built up pensions investments, it's time to start thinking about what kind of annuity you are going to purchase to provide your retirement income. There are many to choose from and it's important to give careful thought to the shape of your annuity, to ensure you get the best value for money in retirement.

Whether or not you should inflation-proof your retirement income is a key consideration. If you don't, then the real value of your income could fall year-on-year and you may find it increasingly difficult to meet your overheads.

So don't just focus on the short term, think about the longer term - an annuity that increases in line with the Retail Prices Index or at a fixed rate each year can help you meet any increases in the cost of living as you grow older.

5. Pensions

Pension planning is vital and the earlier you start, the better. With a pension, you benefit from tax efficiencies that mean for every £1 invested you receive at least 25p in tax relief. You also see a compounding effect with savings in a pension fund that increases the longer you save and means you get a return on your investment return rather than just on what you have saved.

Four ways to keep your pension costs down

Julie Russell is the head of Standard Life Direct

This article was written for our sister website Money Observer