The 2026/27 tax year has finally arrived.
As with every new tax year, this annual financial reset prompts many to conduct a sometimes long-overdue review of their plans.
If you’re keen to spring clean your finances, here are five strong habits to adopt at the start of the new tax year.
1. Keep your financial goals flexible
As they are often long-term objectives, it’s easy to lose sight of certain financial goals as time goes on.
Yet circumstances are constantly changing – for example, a pay rise, promotion, or inheritance can suddenly increase your income, or another child or grandchild can boost the size of your family. Meanwhile, cost of living rises or a redundancy could put pressure on your budget.
Your financial plan must react to these changes.
If your income increases, so might your potential tax liabilities. Similarly, if you have more children, this could put additional strain on your estate planning and inheritance goals. And if your retirement plans change, this can significantly impact your current saving strategy.
Instead of remaining passive, develop an active approach to your financial planning objectives. Ask yourself how each significant life event impacts your expectations and how you should subsequently structure your financial plan.
Embrace this new habit today by refreshing your financial objectives for 2026/27 so that you can start the tax year with clarity and purpose.
2. Pay yourself first
Paying yourself first is a financial planning strategy by which you immediately deduct a portion of your regular income and set it aside for your future self.
You can contribute this income to your savings, investments, and pensions. This wealth can grow over time to help you work towards long-term goals.
Paying yourself first ensures that you prioritise your future goals and will have enough income to live comfortably in later life.
If you wait until the end of the month, you could risk spending this amount before you save it, which can slow down your progress towards financial goals.
Start paying yourself first by setting aside a fixed amount of your salary each month. How much you save depends on you. We recommend starting small and slowly building the amount up to a level you are comfortable with (one that doesn’t significantly impede your current standard of living).
3. Maintain a layer of financial protection
Investing in your future is important, but it’s also vital that you keep enough cash on hand to support yourself in case of an emergency.
One way of doing this is by maintaining an emergency fund: cash savings usually equal to three to six months of your salary (although you could keep more than this if you prefer to be cautious).
An emergency fund is a valuable buffer against surprise life events, like a car breaking down or market crashes, which can put sudden strain on your finances, particularly if most of your wealth is tied up in illiquid assets like equities.
It’s also important that you regularly review your emergency fund, as inflation can slowly reduce the value of your pot. You’ll need to regularly top up your savings to keep the amount in line with the cost of living.
4. Be proactive with your ISA allowances
In our previous article, five common tax-year-end mistakes to avoid, we discussed the importance of making the most of your allowances before they run out.
While this is a good last-minute tax-efficiency option, you can benefit more by taking advantage of your ISA allowance at the start of the year.
This is because ISAs build wealth using compound interest or growth, meaning the longer you hold your wealth in an ISA, the more it can snowball and grow over time.
According to JP Morgan, if you regularly invested £7,594 (the average annual ISA contribution) into a Stocks and Shares ISA from the 2015/16 tax year until March 2026, you would receive an extra £16,738 if you invested at the start of the year compared to the end.
However, it’s important to note that investing carries risk, and that there is no guarantee of returns with a Stocks and Shares ISA.
5. Set up regular financial check-ins
If you leave too long between financial planning reviews, problems can pile up.
Rather than keeping to once-in-a-while financial check-ins, consider half-yearly or even quarterly reviews to help you stay on top of your financial plan. Regular reviews can help you avoid any last-minute tax planning panic and stay on top of legislative changes that may disrupt your wealth.
For even more peace of mind, consider setting up regular reviews with your financial planner, who can help you find more effective ways to manage your wealth.
If you’d like to learn more about how a Milsted Langdon financial planner can help you set good habits this financial year, please get in touch or email us at advice@mlifa.co.uk for more information.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
The Financial Conduct Authority does not regulate estate planning or tax planning.
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. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.