2025 promises to be an interesting year for global markets and the economy. In the US, President Trump’s trade policies are making headlines and creating worldwide uncertainty, while at home, UK growth is stalling. The Bank of England (BoE) recently cut its base rate – from 4.75% to 4.5% – but the move was accompanied by a lowering of its growth forecast.

At Future Planning, we’ll always encourage you to look long term and that’s especially important when markets are volatile.

Keep reading for your look at how to ignore the short-term noise of global politics and future-proof your finances now.

1. Revisit your budget and look after your future self

From the Covid pandemic to the cost of living crisis and the 2022 mini-budget, the first half of the 2020s has been marked by economic turbulence.

With lockdown savings spent on soaring energy bills and mortgage payments rising, you might have found it hard to keep on top of your household budget. Now is a great time to revisit it and see where savings can be made.

Future-proofing your finances means finding a way to live the way you want to live now while saving for your dream lifestyle further down the line. And budgeting is a simple way to start.

Begin by calculating your monthly income and then make a list of your outgoings. Itemising your monthly expenditure should help you to pinpoint areas where you might be able to cut back. You might uncover subscriptions that you’re paying for but no longer use or find that you’re paying over the odds for services and that it’s time to shop around.

Make cuts where necessary and then split the remaining outgoings into three distinct categories:

• Needs – These might include mortgage payments, utility bills, and the cost of weekly groceries.
• Wants – This means luxuries like subscription services or eating out at restaurants.
• Savings – Your bank savings, contributions to a workplace or private pension, and other investments all fit into this category.

When your monthly pay arrives, allocate 50% of it to your needs to ensure that household bills are paid. You can allocate 30% to wants, helping you to live the life you want to lead now. Pay your future self by placing 20% into savings and investments.

The key here, though, is to begin with the 20%. Pay your future self first, before you have a chance to spend it elsewhere. Then allocate the other two areas using the money that’s left. This will help to provide future financial security, whatever that future brings.

2. Check in with your pensions to ensure your plans are still on track

The cost of living crisis saw millions of households across the UK struggling to make ends meet. When money is tight in the present, it’s often our future selves that pay the price. Back in March 2023, the Guardian reported that one in five UK consumers had either decreased contributions or stopped them altogether.

Your pension, though, is incredibly tax-efficient and can provide significant security once you finish work.

Not only do you receive tax relief on the contributions you make, but auto-enrolment means that when you contribute via your workplace pension, your employer contributes too.

Under current rules for the 2024/25 tax year, the minimum contribution is 8%, with you paying 5% and your employer adding 3%. Remember that if you increase your contribution you might find that your employer is willing to match the rise.

Speak to your provider too and ask for a breakdown of your contribution history and an up-to-date quote. Consider restarting contributions or even increasing them if you are worried about a potential shortfall.

3. Make sure you’re prepared for future shocks

There are several ways to protect your hard-earned wealth from a future shock.

You might start by building an emergency fund. Usually, this should cover around three months of household expenditure, helping to tide you over should your regular income suddenly cease.

It’s not a nice thing to think about, but a redundancy, an accident or an illness could strike at any time. If you’re the main breadwinner in your house, or you have people financially dependent on you to help pay bills, what would a sudden loss of your income mean?

You might consider protecting a loss of income using Income Protection or guard against illness using critical illness cover. These products could ensure you can still make ends meet and don’t have to plunder other savings or investments and mean that you come out the other side with your long-term plans still intact.

It’s worth remembering that an emergency fund, income protection, and critical illness cover are all intended to protect you from different scenarios so all three might be required. We can help here, so get in touch if you want to revisit your current provisions.

Get in touch

If you would like to discuss your savings and investments or any other element of your long-term financial security, please email enquiries@futureplanningwm.co.uk or call 01793 575553.

Please note

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. You could lose your investment. Past performance is not a reliable indicator of future performance. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.