My five-step personal finance battle plan for 2015

23 December 2014

New year is a good time to make plans and forge resolutions to be adhered to (yes, adhered to, not broken) over the coming year – and 2015 is no exception.

Many of us promise to get fit in the New Year or to temper the intake of alcohol but others turn to money matters, and giving the household finances an overhaul can reap rich rewards.

While decorating the Christmas tree over the festive period, I came up with my own 2015 personal finance battle plan. Act on some – or all of it – and I promise that you will give yourself every chance of getting in better personal finance shape.

I'll be flabbergasted if at least one of my suggestions did not transform your finances, either immediately or in the long term. Some, of course, might not apply to you. For that, I apologise.

Part one: Tax

Get 2015 off to a solid start by ensuring you file your self-assessment tax return online in time. You have until the end of January to file (for the tax year ending 5 April 2014) although you may already have completed a paper return, in which case you can rest easy.

If you've received a notification since April 2014 from HM Revenue & Customs saying you need to submit a return, you must do so even if you think you don't need to. Not filing will result in an automatic late payment penalty of £100. So don't forget.

More than 10 million people need to complete a self-assessment tax return. As a general rule, if your tax is deducted by your employer, you usually don't need to submit a form (unless you get income from a second job or freelance work). Parents caught up in the changes to child benefit introduced in early 2013 – impacting on individual parents earning in excess of £50,000 a year – must complete a return.

Part two: Pensioner bonds

January heralds the launch of new pensioner bonds from NS&I, the government-backed savings organisation. Available to the over-65s, they will offer guaranteed returns over one year or three years. If you're eligible and can afford to tie up money up for a while, you'd be a fool to miss out. Grab them while stocks last.

Part three: Isas

Although household finances may be tight, do try to squirrel as much money away as possible in an individual savings account (Isa). These tax-friendly plans are a great way to build long- term wealth away from the grasp of the taxman without forcing you to wait until you are in your mid-50s (as a pension does) to access them.

George Osborne, Chancellor of the Exchequer, has boosted the amount that can be put aside in an Isa. In the current tax year, you can contribute £15,000 and from 6 April 2015 £15,240.

It's a use it or lose it allowance, so in 2015, my advice is simple: use it. Money can also be put aside for children in a Junior Isa – £4,000 in this tax year and £4,080 in the next. Remember, the earlier you start saving in life, the better.

Part four: Pensions

In April 2015, most people aged 55 and over will have far greater freedom over how they draw money from their private pensions - a personal pension or a company scheme.

There will no longer be a need to purchase an annuity. Indeed, there will be nothing – other than self-discipline and probably a hefty tax charge – to stop you withdrawing the lot. As part of this new pensions world, free guidance will be available from either Citizens Advice or The Pensions Advisory Service. Ensure you take advantage of it.

Part five: Home Loans

Finally, if you haven't done so already, try to keep a cap on your mortgage costs by locking into a three- or five-year fixed-rate home loan. Low interest rates won't be with us forever.

All that remains is to wish you a prosperous 2015. Let me know if my battle plan works for you.

Jeff Prestridge is the personal finance editor of the Mail on Sunday. Email him at

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