Five fresh ways to spring clean your finances

Spring is upon us. This long-awaited season brings newly budded flowers, longer days, and lovely warm weather – or so we had hoped!

One popular way that many people mark this time of year is to spring clean their homes. You might take the opportunity to declutter, wipe away any dirt from the often-overlooked areas of your home, and complete long overdue DIY projects.

Here at PenLife, we believe in not only spring cleaning your home, but doing the same with your finances too.

If you’re looking for fresh tips on how to spruce up your money now that spring is here, read on to discover six ways to spring clean your finances in the coming weeks and months.

1. Declutter your subscriptions list

While your subscriptions might feel like part of your bank account’s furniture at this point, you would likely be surprised to learn just how much you spend unnecessarily each month.

While many of your subscriptions will be an important part of your life, such as a gym membership, you may discover long-forgotten costs that are no longer welcome in your budget.

In fact, research published by ScribePay revealed that as of 2023, Brits spent around £500 a year on subscriptions, half of which went unused.

By decluttering your subscriptions list, you could find yourself saving hundreds – remember, just £9.99 a month adds up to almost £120 a year!

2. Shake the dust off old pension pots

According to Which? more than £26 billion lies dormant in forgotten pension pots.

While you may feel you are on top of your pension funds, there could be long-overlooked pots in your name just waiting to be claimed. For example, if you have changed jobs or moved home in recent years, the pension provider could have been unable to contact you about a forgotten workplace pension scheme.

Fortunately, shaking the dust off your old pension pots is relatively simple. Using the Government’s Pension Tracing Service, you could track down any old pensions and contact the provider to obtain the relevant details, including any benefits available, any guarantees and the terms associated with them.

3. Weed out any low-interest savings accounts

Between 2009 and 2022, the interest rates offered on cash savings accounts were rather low across the board. Seeing as the Bank of England (BoE) set its base interest rate at around 1% or less during this time period, most banks and building societies followed suit.

Fortunately, the BoE base rate now stands at 5.25%, and as a result, most institutions offering savings accounts have raised their rates.

According to Moneyfacts, as of 29 February 2024, the highest available interest rate on an easy access savings account is 5.2%. However, January 2024 research from Yorkshire Building Society indicates that nearly £400 billion of UK savings is still sitting in accounts offering 1% interest or less.

As such, just as you might pull unwanted weeds from your garden this spring, weeding out any low-interest savings accounts and switching to those with more lucrative rates might help your money to blossom this year.

4. Give your financial protection a fresh lick of paint

If you already have a package of protection in place, you may not have checked in on the details of your agreements in some time.

However, when your life changes, it is crucial to let your providers know and update your information as needed. If you don’t, and you try to make a claim, it may be that your insurer does not provide the payout you need in a difficult time.

Some important details to update include:

• Your address
• Your earnings
• Your family situation, such as if you have been divorced since you took out this protection.

If you’re freshening up your walls this spring, make sure to give your life insurance, critical illness cover, and any other protection you have, a lick of paint too. Just as your home needs to be cared for, so too does your protection – you’ll thank yourself later if you ever need to make a claim.

5. Hire a professional to perform a comprehensive deep-clean

Spring cleaning can be good fun and very satisfying, but performing a comprehensive deep-clean of your home might feel like an overwhelming task to take on.

Similarly, sprucing up certain areas of your money shouldn’t take too long – but if you are looking to scrub your finances from top to bottom, gaining professional help could make all the difference.

Working with a Financial Planner to spring clean your finances could include:

• Weeding out any underperforming savings and investments, and planting new seeds in favourable conditions for your money to grow
• Wiping away any mistakes on your financial documents, including protection and estate planning documents like your will
• Making a financial plan that helps you complete all these time-consuming “cleaning tasks” more easily in future.

Just as you deserve to have a clean, beautiful home to live in, your finances deserve to be freshened up too. To find out more about working with a PenLife Financial Planner, email us at enquiries@pen-life.co.uk, or call 01904 661140.

Please note

All information is correct at the time of writing and is subject to change in the future.

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.