Is getting on top of your finances one of your New Year’s resolutions? If so, you’re not alone – a recent poll from YouGov found personal finance-linked resolutions were among Briton’s top priorities for 2026.
Tackling your finances can feel like a daunting task. But the key is to break the job down into small and achievable steps. Here are just seven ideas that could help to transform your finances over the year ahead.
#1. Move your savings out of Scrooge-like accounts
Britons now have £276bn sitting in bank and building society accounts that pay not a single penny of interest according to the Bank of England. From excess cash held in current accounts to money sitting in out-of-date savings products, this is a huge sum that needs to be put to work. And the eye-watering £276bn doesn’t even include savings held in accounts paying very low interest rates.
This is the perfect time of year to review where you currently hold cash. Analyse whether you’re keeping more money than you need to in your current account; check what rates of interest you’re earning on money held in all the savings products that you’ve opened over the years.
Armed with this information, you’ll be in a much stronger position to ensure you’re getting good value from your savings. Use online services such as Moneyfacts.co.uk to identify the best deals on savings accounts – from instant access products to deals where you might need to tie up your money for a set period.
Don’t underestimate the impact of poor-value savings accounts, particularly over the longer term. If you’ve got £10,000 in a savings account paying zero interest, you’ll be £410 worse off by the end of the year than someone with the same amount of money in United Trust Bank’s top-paying deal right now. After 10 years, you’d be more than £5,000 worse off, assuming interest rates remain unchanged.
#2. Make the most of the increased FSCS protection
Another good reason to review where you’re keeping your savings is to ensure you’re making the most of the protection provided by the Financial Services Compensation Scheme (FSCS), just in case your savings provider runs into trouble.
On the 1st of December 2025 the amount of savings protected per eligible person, per authorised bank, building society or credit union increased from £85,000 to £120,000 for qualifying single accounts and from £170,000 to £240,000 for qualifying joint accounts.
However, not all accounts are treated separately under the FSCS. It’s per person, per authorised firm and banking licence. For example, although United Trust Bank has its own UK banking licence, some banks share the same licence across multiple brand names. If you have savings across two brands that share one licence, your total protection will still be the single-firm limit of £120,000 per individual across all the accounts you have with those connected brands. Also, bear in mind there are providers that are not covered at all by the FSCS for deposit protection. Some e-money institutions including fintech firms and payment apps that hold your money as “safeguarded funds” rather than deposits, are not covered by the FSCS.
It’s a good idea to check what banks, building societies and other savings providers have or share a banking licence, and you can find a list of those providers on the Bank of England website HERE.
#3. Be smart about interest rate movements
The outlook for savers isn’t great going into 2026. The Bank of England’s Monetary Policy Committee reduced base rate from 4% to 3.75% at its final meeting of 2025 in December. Economists expect the Bank to cut rates again by the Spring – and then to make at least one further reduction before the end of the year. That would leave base rate at 3.25%, the lowest level since November 2022.
In this environment, it’s important to be smart with your savings strategy. In particular, consider fixed-rate savings accounts that will protect your cash from interest-rate reductions to come.
The good news here is that this doesn’t require much of a trade-off. Traditionally, banks and building societies offer lower rates on their fixed-rate accounts when interest rates are expected to fall. But that isn’t the case right now – the best fixed rates available on one-year savings bonds, for example, broadly match what’s available on easy-access accounts.
The longer-term outlook for interest rates is harder to predict, but the consensus view amongst economists is that rates are unlikely to start rising significantly during 2027 and 2028 – and that they may even fall further.
That could mean it pays to put savings into longer-term products, offering fixed rates for two or three years, say. Just remember that such accounts may not allow you to withdraw your money early or will usually levy early withdrawal charges if you need to get some or all of your money out sooner than expected.
#4. Make full use of cash ISAs while you still can
Cash Individual Savings Accounts (ISAs) can work well as the foundational layer of your savings and investments. You can use these tax-free savings accounts to stash away an emergency buffer of cash, as well as to earn competitive rates of interest so that the value of your savings grows over time.
However, the rules on cash ISAs are set to change. In the current 2025-26 tax year, which ends on 5 April, you can put up to £20,000 into a cash ISA; the same allowance will be available in 2026-27. But from April 2027 onwards, unless you’re over 65 and therefore exempt from the reduced allowance, you’ll be limited to putting just £12,000 per tax year into a cash ISA.
It’s therefore important to make good use of cash ISAs while you still can, particularly if you don’t have a cash buffer set aside. The best cash ISAs pay competitive rates of interest – for example, United Trust Bank’s one-year cash ISA currently pays a fixed rate of 4% a year, comfortably ahead of inflation.
#5. Use savings tricks to improve your discipline
Most of us have good intentions when it comes to putting money aside for the future – not all of us act on them. Behavioural economists have spent years studying what’s getting in the way of people making better financial decisions – the explanations vary from the difficulty of imagining ourselves many years into the future to the mental effort required to get on with making a change.
The solution to many of these problems is to make a few smart one-off decisions now that you’ll continue to benefit from for months and years to come because you probably won’t get round to changing direction for a while.
The most obvious example is setting up a regular standing order that moves money from your current account to your savings account each month. Do this as one of your New Year’s resolutions and you’ll effectively be automating your savings, rather than having to remember to put money aside regularly.
In this digital age, there are numerous products and services that use automation to magnify this effect. One good example is an app that automatically rounds up each spending transaction you make, sweeping pennies into your chosen savings account; over time, these small transactions can really add up.
#6. Free up cash to boost your savings
This time of year, also gives you an opportunity to cut down on wasted cash – and therefore to create a bit of headroom to increase your savings (or to help you budget more comfortably each month).
Subscription-based products, which have boomed in popularity in recent years, are a good example. Many of us have signed up for products and services that we no longer use – from magazines we never read to memberships of gyms we never get round to going to. Check in with your online banking to make a list of the things you pay for each month – then cancel every one of them that you’ve not used in the past six months, say.
In addition, while you’re logged in to your account, make some notes about your regular spending commitments. They’re likely to include utility bills – particularly gas and electricity – and telecoms, including your mobile phone, broadband and television streaming services. Price comparison services can help you to make substantial savings on many of these products and services – and they usually ensure the switching process is very straightforward.
#7. Be careful not to over-save
Saving is a good thing, providing you with a lifeline in case of emergency and a nest egg for the future. However, even the most competitive cash savings products don’t deliver stellar returns, especially in the current low-interest rate environment. Putting too much money into bank and building society savings accounts can therefore be a mistake.
How much is too much? There’s no single right answer to this question, because everyone’s circumstances are different. However, most financial advisers would suggest that you aim to have at least three to six months’ worth of essential living expenses in a savings account you can access quickly in the event of an emergency – losing your job, say.
You may also want to have additional cash savings for short-term financial goals – for example to pay for next year’s summer holiday, to cover children’s upcoming education costs, or for a home renovation you’re currently planning.
However, where you have additional savings that you can’t see yourself accessing in the medium to longer term – say for at least five years – it makes sense to explore investing this money. The stock market, for example, has in the past tended to deliver superior returns over periods of five years or more; that’s no guarantee it will do so again in the future, but you may be prepared to risk some short-term ups and downs if there is also potential for outsized returns over time.
Although this article may contain helpful information and tips, this is not personal advice. You may wish to seek advice from a financial advisor if you are unsure what’s best for your own personal circumstances.