10 ways to refresh your finances in 2026

With the new year fast approaching, interactive investor, the UK’s leading flat-fee investment platform, shares 10 simple ways to boost your finances in 2026.

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Pensions

1) Review your pension to see if you’re on track

Craig Rickman, personal finance expert at interactive investor, says: “Making some time to review your pension and get your retirement savings on track could be the best thing you do for your finances in 2026.

“Make a start by digging out your paperwork and checking how much you have saved. Don’t forget to add in any older schemes you’re no longer contributing to. Then find an online pension calculator which can estimate what pension wealth and income you might achieve by retirement. Bear in mind, the figures aren’t guaranteed and the pot you accrue for later life depends on investment performance and your future contributions.

“It’s also worth getting a state pension forecast to see when you’ll receive it and identify if you have any gaps in your national insurance (NI) record. You need 35 years’ qualifying national insurance contributions (NIC) or credits to receive the full state pension and can plug any gaps by paying voluntary NICs, for the past six tax years.

“Once you know roughly where you stand, it’s much easier to make decisions about your retirement plans. If you’re set to fall short of your target income, examine your budget to see if you can afford to jack up your contributions. Even small increases can make a big difference to your eventual retirement wealth. You can also consider paying in lump sums if you have any spare cash you’re prepared to tie up until age 55 (rising to 57 in 2028), which is the earliest point you can access most pensions.”

• When will you get your state pension?

2) Use salary sacrifice to boost your pension wealth

Craig Rickman explains: “Salary sacrifice is one of the most tax-efficient ways to pay into a pension. Although the Budget announced a £2,000 cap on such schemes, the changes won’t come into force until April 2029. The delay means workers still have four tax years to make the most of the current rules.

“Joining a salary sacrifice scheme can make pension saving more affordable as you avoid national insurance (NI) on your pension contributions. Basic-rate taxpayers save 8% NI, while higher-rate taxpayers save 2%. The tax saving means that a £100 pension contribution made under salary sacrifice only costs £72 for a basic-rate taxpayer (saving £20 income tax and £8 NI) and £58 for a higher-rate taxpayer (saving £40 income tax and £2 NI).”

• What you need to know about upcoming salary sacrifice changes

3) Consider increasing pension contributions to reduce the impact of fiscal drag

Craig Rickman adds: “Frozen income tax thresholds will remain in place until 2031, dragging more of us into paying higher rates over time. And upping your pension contributions can be a great way to offset the impact of this stealth tax. Pension contributions, within certain annual limits, are exempt from income tax, so you can effectively claw back tax on contributions.

“It’s well worth sitting down to work out if you can afford to boost your pension contributions, as even small increases can have an outsized impact on your retirement wealth due to investment compounding, which can help your wealth to snowball over time.

“Making higher pension contributions is especially beneficial for higher-and-additional-rate taxpayers who can save 40% and 45% tax, respectively. Meanwhile, high earners with a salary between £100,000 to £125,140 can save as much as 60% income tax, as pension contributions help them keep more of their £12,570 tax-free personal allowance, which taxpayers gradually lose once their income climbs over £100,000.”

• Our income tax bills are rising: the lowdown on fiscal drag

4) Look for lost pensions

Craig Rickman explains: “Throughout the country, over three million lost pension pots are waiting to be reunited with their owners, with an estimated £31 billion locked away. The current retirement system means employees collect pensions as they move jobs and it’s easy to lose track of a pot from a previous employer.

“Tracking down lost or misplaced pensions can add thousands to your retirement wealth. As long as you know either the name of your old employer or your scheme, you can use the government pension tracing service to hunt it down.”

• Have you lost or misplaced a pension? Here’s how to find it

5) Check if you’re owed tax relief on your pension contributions

Craig Rickman says: “Thousands of higher-rate taxpayers are missing out on valuable pension tax relief, which isn’t given automatically on all contributions. The problem arises because contributions into a SIPP or a relief at source workplace pension only attract 20% tax relief - the rest needs to be claimed through self-assessment or by writing to HMRC.

“If you think you might be due a tax rebate, you can contact HMRC by letter or by filling in a tax return. You can claim missing tax relief for up to three previous tax years and you could receive a cheque in the post worth thousands.”

• Investment outlook: expert opinion, analysis and ideas

6) Consider consolidating your pensions

Craig Rickman adds: “When we move jobs during our career, we often collect small pension pots and end up with a mountain of pension paperwork. Although combining those pots won’t be right for everyone, it’s worth considering, especially as you approach retirement and need to start making decisions about managing your pension.

“Bringing your pension pots under one roof can make it easier to make decisions, keep track of investment performance and keep an eye on your pension fees. However, in some cases, pensions have hidden valuable benefits, like guaranteed annuity rates, that are lost on transfer so it’s worth checking the small print before you decide.”

• Five reasons to consolidate your pensions and three to think twice

Passing on wealth

7) Make use of gifting allowances

Craig Rickman says: “Inheritance tax (IHT) is on the rise, with frozen thresholds and changes to pensions expected to raise billions more for the Treasury in the future. Rachel Reeves announced last year that pensions will be included within IHT from April 2027, dragging more pension savers into paying the tax on their estates.

“The pension reforms mean that using IHT gifting allowances will become even more important.

“Any gifts you make within seven years of your death could end up being included in your estate for IHT. However, gifts worth a total of £3,000 each tax year are exempt from IHT, even if you die within seven years. You can also carry forward last year’s £3,000 exemption if unused, meaning a couple could potentially give away £12,000 today, tax free.

“In addition, gifts you make from your surplus income will be exempt from inheritance tax, as long as they meet HMRC criteria. For example, the gifts must be made from income rather than capital, not reduce your standard of living and there must be a regular pattern of giving. If you’re not sure, then it’s worth getting advice as this can be an extremely valuable exemption.”

• Use this lesser-known trick to cut your IHT bill

Stocks & Shares ISAs

8) Make the most of your Stocks & Shares ISA allowance 

Camilla Esmund, senior manager at interactive investor, says: “A core pillar to investing is maximising any tax-saving opportunities – helping you keep more of your growth and income. Investing in the markets, if suitable for your stage of life and time horizon, can put your money to work over the long term. Especially if you are staying diversified.

“Increasing dividend taxes and prolonged frozen tax thresholds will make Stocks & Shares ISAs even more valuable for investors in 2026. Amounts you invest in a Stocks & Shares ISA are protected from both dividend tax and capital gains tax. That’s a valuable incentive because these taxes can take a sizeable slice from your wealth over time.

“Investors could pay more dividend taxes from April 2026, as rates at the basic and higher levels increase by 2 percentage points. Someone with £10,000 dividend income from shares held outside an ISA will pay £190 more tax due to the changes. From April 2026, a basic-rate taxpayer will receive a £1,021 tax charge on £10,000 dividend income, while a higher-rate taxpayer will pay £3,396.

“Frozen income tax thresholds also have a knock-on impact on wealth taxes. As frozen thresholds push more people into higher tax bands, they also pay higher rates on capital gains and dividends.

“Making the most of your £20,000 ISA allowance each year can help you build a sizeable nest egg and give you more financial freedom once you reach later life. Remember there are managed offerings on the market, such as ii’s Managed ISA, if you want to invest for your long-term future, but do not want to make investment decisions yourself.

“When it comes to investing, keep an eye on fees. We can’t control the market, but we can control how much we pay to invest. Over decades, paying too much in investment platform fees, for example, can really add up – and that is money that should be in your Stocks & Shares ISA pot. interactive investor is a proud industry outlier; using flat-fee charging unlike many platforms which charge a percentage of your wealth.”

• How much help do you need when investing?

9) Use Bed & ISA to reduce your CGT bill

Camilla Esmund explains: “Maximising tax-efficient investing is only going to become more important, so be strategic about investments held outside tax wrappers. If you hold shares outside an ISA, then it’s possible to gradually transfer this wealth into a Stocks & Shares ISA through a process known as ‘Bed & ISA’. Simply put, this is where you sell shares held outside an ISA and immediately rebuy them inside an ISA.

“To avoid paying any capital gains tax (CGT) when you sell these shares, you can make use of the £3,000 CGT annual exemption, realising a gain up to this allowance each year and shifting the money to a Stocks & Shares ISA. In the future, any gains or dividend income on these shares will be completely free from dividend tax and capital gains tax. Bed & ISA often has an earlier deadline ahead of the end of the tax year.”

10) Consider a Junior ISA for kids or grandkids

Camilla Esmund adds: “Great oaks from little acorns grow. Investing in a Junior ISA (JISA) is a fantastic way to help save for your child’s future. It can also be a brilliant way to talk to your child about investing and engage them on this topic early in life – helping pave the way for a healthy relationship with money for the long term. As with an adult ISA, the earlier you can start contributing, the better. After all, if you invest in a JISA from the birth of your child, that pot has an entire 18 years to grow and benefit from the magic of compounding, all within a tax-efficient wrapper.

“You can invest up to £9,000 a year on their behalf and any money you invest can grow free from capital gains tax and dividend tax. Bear in mind that they’ll get access to the investment when they turn 18 – so, again, this presents a great opportunity to talk to them about how the JISA is invested before they get access, so that when they have agency over that pot of money, they’ll feel more confident keeping it invested for the long term.”