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    12 step financial planning guide

    23 January 2020

    Punter Southall Wealth

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    4 minute read

    Clarify and improve the condition of your personal finance and investments. 

    Financial goals

    At Punter Southall, we offer clear, expert advice, cutting through the overwhelming mountain of financial information and putting plans in place to help people achieve their financial goals. 

    But regaining better fundamental control over a disorganised or hazy personal finance situation is something that everyone can do, and much of it can be done without professional advice. 

    Here we present our ‘12 Step Remedy for Financial Fitness’ that can clarify and improve the condition of your personal finance and investments.   

    Day One 

    Review your investments and finances

    This is a great place to start. Create a record (or update the one that you have) of your income and expenditure. Do you have any monthly subscriptions, memberships, or other expenses that you’re not enjoying or using enough? Can you put this money to better use elsewhere? Get to know your investments. Make a list of them, where they are invested, and how much they’re worth. Are you being charged for them? If so, how much? Are your investments held within wrappers? Could you make the holdings more tax efficient by maximising your annual allowances such as for your ISA or Capital Gains Tax allowance? The more familiar you are with your investments and finances, the more clarity you will have. 

    Day Two 

    Simplify your pensions 

    Pensions are not only a powerful savings tool - they are extremely tax efficient and can be invested in a wide range of strategies. Unfortunately for some, they are often forgotten until retirement approaches, when it might be too late to make any significant changes that would be of benefit. Start locating those old plans now, particularly those left behind with old employers. If you don’t feel you’re receiving good value from them, or you don’t think you need the features they’re offering, you could consider consolidating them to benefit from a lower cost solution. Ensure your pension is working for you and helping you to achieve your goals. 

    Day Three 

    Verify you are properly protected 

    Nobody likes to think of the unforeseen, but it can happen. What if you were no longer able to work and provide an income for yourself and your family? Would you be able to meet the costs to live comfortably, and would the business be able to continue without you? It is important to review your protection policies – both those held personally and with your employer. Are they still valid and up to date? Are you perhaps over- or under-insured? Perhaps you have moved employment and a plan previously available is no longer there and needs replacing. Ensure that this is considered before it’s too late. 

    Day Four 

    Use your ISA allowance

    If you have any spare cash from 2019 that you’d like to set aside, you may be able to top-up your ISA to the allowable limit of £20,000 before the end of the tax year. ISA funds can be held as cash or (if you’re prepared for a bit of risk to your capital) stocks and shares, but both kinds are very tax efficient. 

    Day Five 

    Pass on your wealth 

    If you have a secure financial plan in place to meet your income and capital needs in the future, you may find that you have surplus funds that you can distribute to loved ones and charities now, in future, and (along with your Will) after your death. Investigating these arrangements today can be a very satisfying and enjoyable responsibility, which could also relieve you of a potentially stressful financial situation later. 

    Day Six 

    Select a Charity to support 

    What’s your favourite cause? Do you have one, a few, or many? Spending some time considering and planning what kind of support you’d like to provide now, in future, and as a legacy can help make your giving more effective and potentially bring tax relief benefits for yourself and your estate. 

    Day Seven 

    Calculate required retirement income 

    Everyone wants a good lifestyle after they stop working, but not everyone knows what they will be able to afford. Interrogating your assets such as your pension as well as your savings and investments can help form a picture of what kind of income you will have after you stop earning. If you are still accumulating income, you can continue squirrelling away and investing the target amount of money each month to help you achieve your ideal retirement. But if you are within a few years of your retirement, you could try to estimate the income you’ll receive from your pension, savings and investments when you retire, as there may be adjustments you could make to your expenditure now to help bring you closer to the retirement lifestyle you’d like to have. 

    Day Eight 

    Take advantage of flexible working arrangements 

    If retirement has appeared on your time horizon, it’s good to look at the few years leading up to your target retirement date and determine whether or not you will benefit from reducing your working hours to part time. Individuals often struggle when going ‘cold turkey’ from their full-time income, and therefore a phase of part-time work that leads into retirement can provide a smoother transition. 

    Day Nine

    Gift your wealth

    If you can afford to do so, it’s possible to gift a certain amount of your money to family and friends each year without a potential inheritance tax liability. Should you wish to make gifts, it is important to consider what allowances you have available to you. 

    Day Ten 

    Read your Wil

    Writing or updating your Will doesn’t have to be a depressing task. It’s actually a very positive personal responsibility that can offer comfort and care to your loved ones after you’re gone. It is important to ensure that your Will accurately reflects what you wish to happen to your estate. We would always recommend seeking professional advice in relation to this to ensure if satisfies your requirements. 

    Day Eleven 

    Review your risk profile 

    When you reviewed your investments, did you consider if your lifestyle, life stage, or attitude to risk has changed since you originally made your investments? Being consciously aware of what level of risk you can, should, or would like to take when investing is an important part of recognising whether your investments are still suitable now or whether they require changes.

    Day Twelve

    Plan for the future

    When you train your sights on the future, you’ll almost always find that more financial fitness work can be done. Often allowances are available annually and therefore it can be a tremendous advantage to review your investments and finances annually. Whether it’s tidying up your pension plans, ensuring your savings are as tax-efficient as possible, or considering what sorts of new investments would be suitable, a financial planner can provide valuable input. We’re always here to answer your financial fitness queries

    Punter Southall recognised by FTAdviser as UK Top 10 Adviser 


    This communication is prepared for general circulation and is intended to provide information only. It is not intended to be construed as a solicitation for the sale of any particular investment or as investment advice and does not have regard to the specific investment objectives, financial situation, and particular needs of any person to whom it is presented. Tax treatment will depend upon individual circumstances and may be subject to change in the future.

    Please also note that the value of investments, and / or the income from them, can fall as well as rise so you could get back less than you invested. The past performance of an investment should not be relied upon as a guide to its future performance. Unless indicated otherwise, comment and opinion in this publication is based on HMRC’s tax regulations for 2020/21 tax year and future proposals.

    This communication has been approved and issued by Punter Southall Wealth.

    Further reading

    Visit our Resource Centre for more informative guides:

    Regaining better fundamental control over a disorganised or hazy personal finance situation is something that everyone can do, and much of it can be done without professional advice. 

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