Five important questions to ask during your annual financial review
An annual financial review is a good time to look at your goals, see if they still make sense, or whether any changes are required. Many people aren’t sure what to ask their financial advisor, how to prepare in the right way, or what to check in their plan. In this blog, we will look at five important questions to ask during your financial review. You will also learn to prepare and explain what to check during a mid-year financial assessment.
Why is annual financial planning important?
As the Greek philosopher Heraclitus said, “The only constant in life is change.” Regular checking of your financial status is therefore important to assess whether there have been changes and, if so, whether they could change your life in a positive or negative way.
An annual financial review helps you:
- See if your money goals are achievable or not.
- Identify gaps or risks in your plan.
- Ensure that your savings and investments are on the right track.
- Check any impact on your taxes, retirement savings, and insurance.
What are the most important things to check in my financial plan?
Check these things in your financial plan before the review meeting with your financial advisor:
Financial goals: Goals are something that drive a person to achieve the unachieved. Note down your goals, including short-term (1–3 years), medium-term (3–5 years), and long-term (5+ years). You also need to reassess your goals, particularly if unexpected events happen in your life.
Budget and cash flow: You need to check your spending and income each month without any doubts. Changes in expenses or income can dramatically affect your savings, investments, or ability to pay off debt.
Emergency fund: Experts suggest saving an emergency fund to cover 3–6 months of essential expenses as a minimum. This emergency fund means you are prepared to face unexpected events, like losing your job or medical emergencies.
Debt: Review your debts, especially high-interest ones, and ensure your repayment plan still works.
Investments: Your investments should match your goals, risk level, and time frame. Ensure your money is spread across different types of investments and rebalance if needed.
Insurance and taxes: Ensure your health, life, disability, and property coverage is sufficient. Also check what tax-saving opportunities are available and whether you are maximising them.
Estate plan: Don’t forget to update your will or trust after major life changes.
Regularly reviewing your plan helps keep your finances secure and on track.
How to prepare for a financial review meeting?
Your yearly meeting with your financial adviser is a great opportunity to look at your financial situation and see if your plans are working with you.
- Check your accounts: Your financial adviser will want to review all of your relevant documents to ensure everything is going the right way. So, collect items including bank statements, savings plans, pension statements, investment statements and other documentation.
- Know your goals: Think about what you want to achieve with your money before the meeting itself. It can be something like you want to save for a house, plan for retirement, or grow your investments, etc. Have your goals changed which would require a revised plan?
- Write down questions: Asking questions means you don’t miss discussing anything important to you. This is easier to plan before the meeting so write them down and take the list with you.
- Tell your adviser about changes: Share life changes like a new job, salary increase, inheritance, or big expenses with your adviser. This helps them to adjust your plan correctly.
Five important questions to ask during your annual financial review
When you check your finances every year, the aim is to ensure you are using all tax benefits and planning well for the coming year. Ask yourself these questions:
1. Am I using all my tax allowances this year?
Many people forget to claim the benefits they are allowed.
Check things like:
- Personal allowance
- Marriage Allowance
- Savings allowance
- Dividend allowance
- Capital gains exemptions
- Pension tax relief
This helps you avoid paying extra tax.
2. Has my income or spending changed this year?
Your tax may change if:
- You earned more or less
- You started earning from a new source (like rental or side work)
- You had big business expenses
- You have deductions you have not claimed
Reviewing this helps you stay prepared.
3. Am I on track with my tax deadlines and payments?
Ask yourself:
- Do I need to make a payment on account?
- Am I close to any filing deadlines?
- Have I kept enough money aside for tax?
This helps you avoid last-minute stress or penalties.
4. Can I reduce my tax bill this year?
Simple yearly actions can lower your tax, such as:
- Adding more to your pension
- Using your ISA allowance
- Planning when you receive income
- Claiming all allowed business expenses
Reviewing this yearly helps you save money.
5. Did anything change in my personal or business life that affects tax?
Check for things like:
- Marriage or divorce
- Having a baby
- Buying or selling a home
- Starting or closing a business
- Moving from job to self-employment
These changes can affect your tax for the year.
When to do a mid-year financial check?
A mid-year financial check keeps you on track and helps if your income, spending or investments change. It is usually halfway through your financial year, not the calendar year. In the UK, this would likely be around October–November, as the financial year is from 6th April to 5th April the next year. During a mid-year check, you can:
- Review your budget and spending.
- See if you are reaching savings goals.
- Adjust investments if needed.
- Check for new tax rules or benefits.
Even a short check-in can prevent problems later.
Want to check your pensions and savings, or need Inheritance Tax advice? Contact us today to book an initial meeting! We’ll give you clear, honest guidance to help you stay on track.