Your vision for 2026: how to make this a really good year for your finances

January is the perfect time to talk about setting new goals. In a perfect world, what would you like your finances to look like this time next year? And is anything standing in the way?

What would make 2026 a really good year for you?

Financial plans are inherently about the big picture. But they’re built brick-by-brick, year-by-year. That’s why even though we should always think long term, it’s also important to keep in mind the vision of what you want to achieve in the year ahead.

So, what would make this a good year for you?

It could be retiring early. The state pension age rises to 67 this April,  but three out of five of us (according to Just Group’s Countdown to Retirement Survey), will finish work before that date.

You might start a new business. One in 10 adults plans to start a new venture this year. Or you might be selling up. Many business owners will be tempted to find an exit in 2026 as the level of Capital Gains Tax relief is changing.

Will 2026 be a year of consolidation or growth for you?

Remember the 3 Fs – forecasting, foundations, flexibility

The questions above are the starting point for setting your goals. From there, we can work backwards and help you map out a way to achieve them:

• Forecasting: We use cashflow modelling to show you how your finances will cope in different economic scenarios and what would happen if you made specific changes (such as changing jobs).
• Foundations: Are you taking care of the basics? Are you using all your tax allowances, such as ISAs and pension contributions, do you automate payments to investment accounts?
• Flexibility: Rather than trying to predict the future, financial planning gives you a framework that allows you to easily adapt to what happens, adjusting as your life evolves.

Here are 5 things that could stand in the way (and how we can help you prepare)

1. Interest rates are coming down

The focus on interest rates is as intense as ever, following the Bank of England’s recent cut to 3.75%. By some estimates, it could bring its bank rate to as low as 3.5% by the end of 2026, depending on the state of the UK’s economy.

These changes shouldn’t be taken lightly. They will have a substantial impact on your month-to-month spending. Cheaper debt is potentially good news if you’ve got a variable-rate mortgage or are refinancing a loan. But if you’re one of the 1.8million or so people in 2026 renewing a fixed-rate mortgage set before the last big interest-rate hike, you’re likely to see payments rise sharply. Lower interest rates are also much less positive for any cash savings.

Our forecasting helps here. With cashflow modelling, we help you stress test how your finances will be impacted by lower interest rates, helping you get a clearer picture of how changes might affect your life and goals.

2. Cash ISA limits are changing

From April this year, changes are coming in for your ISA allowances. If you’re under 65, you can only put £12,000 into a Cash ISA. The remaining £8,000 of your Annual Allowance must be invested instead. Savers have between now and the beginning of April to maximise their contributions for this financial year. The government is also consulting on a replacement for the Lifetime ISA, so expect that to be phased out soon.

We pay attention to your foundations. Have you already used up your allowances for the current tax year? Remember, the overall ISA limit you can save tax-free is still £20,000, but you may choose to put more in stocks and shares ISAs instead.

3. Taxpayers are being pushed into higher brackets

‘Fiscal drag’ was one of the most talked-about terms of 2025. A freeze on income tax bands (extended in the Autumn Budget until at least 2031) is pushing more people into a higher tax bracket. HMRC projections in 2025 showed that for the current tax year, there are now more than 7 million people paying the higher rate of income tax, up nearly 40% from 2022/23. Previous research shows that more people must plan to avoid fiscal drag. Forecasts from the Institute for Fiscal Studies showed that one in four teachers and more than one in eight nurses will be pushed up a tax band by 2027/28.

More people are creeping into the ‘60% tax trap’, which affects people with salaries above £100,000, paying a higher rate of tax as their personal allowance tapers off. A simple solution to this problem has been paying more money into your pension.

Maximising your pension contributions can help mitigate against being pushed into a higher tax bracket. If you’re likely to receive a bonus payment that would put you into the higher earners bracket, are you able to defer the payment? If you’re married or in a civil partnership, it may be possible to share allowances or transfer income-generation assets to your partner.

4. Rates relief for selling your business is changing

If you’re selling your business in 2026, changes in April will affect how much tax you’re liable for. Business Asset Disposal Relief offers business owners a tax-efficient way of exiting their company, but after 6 April, this level is reducing. The rate of capital gains tax rises to 18% (up from 14%). The standard rates of capital gains tax are 18% (basic rate) and 24% (higher rate). The change will affect contractors winding down companies, family transfers and management buyouts.

If you’re an owner selling up, the BADR still gives you a reduced CGT rate, but there’s a crucial period in the next few months to avoid a higher tax bill.

5. Uncertainty, uncertainty, uncertainty

Every year has a degree of uncertainty; 2026 will be no different. Many big policy changes were floated in advance but abandoned ahead of Budget Day, such as raising income tax and cutting the tax-free pension lump sum. Who’s to say the government won’t come back for another go? Global stock markets soared in 2025, but many market watchers warn the AI bubble might burst. Meanwhile, local and regional elections are taking place across much of the UK.

We always advise clients to avoid reacting to speculation. This is why flexibility is one of the most important aspects of your financial plan when considering your goals.

Markets fall and rise, inflation and interest rates are unpredictable, and the government can simply change its mind on policies. Not everything possible is in our gift to control. However, you can be better prepared. If you’re setting, resetting, or simply refining your financial goals for the year ahead, please speak to one of our experts.