Your Betwixmas to-do list

The week between Christmas and New Year is usually spent doing all things festive including making a set of resolutions.

One of the best jobs you can do today to secure a comfortable future is to sort out your old pensions.

People switch jobs around 11 times in their careers, according to the Department for Works and Pensions (DWP), and it’s estimated there could be around 1.6 million “lost” pension posts in the UK, representing £19.4bn of retirement assets – or around £13,000 per pot.

You should be able to find the information you need in annual pension statements but if not contact your provider for this. The government also has a pension tracking service which is a database of UK pension schemes.

Laura Suter, head of personal finance at AJ Bell, comments: “Firstly, knowing how much you have saved in total will help you work out how much you might need to save in the future to enjoy the retirement you want.

“Secondly, once you have located any old defined contribution funds you can consider combining them with your existing provider.

“This will make your pension easier to monitor and manage, but also means you benefit from lower charges, greater investment choice and more flexibility. But just double check before you transfer any old pensions whether they have any guarantees attached, as these could be lost if you switch to a new provider.”

The next job on your list should be making a will.

This is important no matter what stage of life you’re in but becomes especially significant when you have dependents and if you’re not married or in a civil partnership.

A will can be used to specifically name where you want your assets to go when you die. Most people assume this will happen automatically, and in most cases it does, however there are never any guarantees.

Unless you name guardians for your children, for example, a court may decide what happens to them. If you’re not married or in a civil partnership, the nearest blood relative could inherit everything you leave behind.

A will doesn’t need to be a huge admin task either, it can be done online quickly and easily but if your finances are more complicated you can always pay for a solicitor to draw one up.

Hand in hand with will writing comes protection policies.

Life insurance is probably the most straightforward, paying out a lump sum to your dependents if you die, but there’s also income protection if you’re unable to work and critical illness cover – paying out a sum of money if you’re diagnosed with a specific illness.

The pandemic has highlighted the need for having a protection policy in place, yet a price rise for consumers is expected.

“Income protection, life cover and critical illness cover are all worth considering, especially as while insurers haven’t started increasing prices, yet it could be on the cards, so we recommend taking cover sooner rather than later,” a spokesperson from LifeSearch said.

When celebrating Christmas, and everything that comes with it, if you have children or grandchildren, they’re likely to take a main role.

So why not take this time to consider childcare costs.

The UK has the third most expensive childcare system in the world, according to the Organisation for Economic Co-operation and Development (OECD), with an average full-time place costing £12,376 a year.

There are some schemes to help, including tax-free childcare and free hours for most children when they turn three and a half.

Yet most parents go back to work at nine months so there is still a gap where these costs need to be met. Even after children go to school, there are always costs to pay out for, from school uniforms to university fees.

Suter explains: “If you managed to save just £100 a year every year since a child was born you could have £3,000 put away when they turn 18, assuming it’s invested and gets 5 per cent a year growth after fees. Putting away £50 a month would equal more than £18,000 by the time they turn 18.”

Last on the list, before you dive back into Elf again, is given your credit score a glance.

It’s the place where you’ll be alerted to anything untoward going on, such as fraudulent credit applications or mistakes on your file. It will also give you a good indication of your chances of securing credit in the future.

John Webb, credit expert at Experian, comments: “You can get your statutory credit report for free from all three credit reference agencies.

“If you spot anything that might need to be corrected, you can contact the lender directly to update your credit report. You can also query these through the credit reference agencies.”