Around 23 million Brits made New Year’s resolutions for 2021 – though research suggests most of those resolutions will only have lasted about seven weeks.
According to Sarah Coles, senior personal finance analyst for Hargreaves Lansdown, “The New Year is a time for optimism and making plans to put our finances right.”
So what are Brits’ top financial priorities for the year ahead?
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Brits’ top money resolutions
A recent survey of 2,000 people by Opinium for Hargreaves Lansdown suggests Brits are focusing on very specific financial goals for 2022.
1. Pay off debt
Brits’ most popular resolution for next year is to pay off debt, with 20% of people surveyed saying they want to focus on that first.
“At the moment, many of us are carrying Christmas debts, so it’s hardly surprising that paying this off is our top priority,” says Coles. Those with this resolution might also want to erase their credit card debt, which now averages £2,033 per household.
2. Save money on bills
Second on the list is “getting cheaper bills”, with 17% of Brits making this a priority. With energy prices surging across the UK, it’s no surprise Brits are worried about their utility costs.
3. Grow savings
Savings come in third place, with 15% of brits prioritising this area of their finances. This isn’t a very impressive percentage considering that one in four Brits didn’t save any money during lockdown and 35% of Brits say they save nothing in a typical month.
Financial experts recommend building an emergency fund to avoid getting into debt during difficult times, so this could be a great start.
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4. Understand pensions
According to PensionsAge magazine, nine in 10 Brits don’t know what pension payments they are entitled to. In addition, 24% have no idea how to access their pension pots. With only 8% of Brits making a resolution to better understand their pensions, this might continue to be an issue for many.
As Hargreaves Lansdown points out – based on information from the Pensions and Lifetime Savings Association – a single person needs a pension income of £20,800 (including their State Pension) for a moderate retirement. For a more comfortable one, they need £33,600.
5. Save more for retirement
After understanding where they are with their pensions, many Brits are hoping to put more money aside for their future. Right now, a quarter of Brits worry about not saving enough for retirement. More than half (58%) of those over 40 are worried that they won’t have enough for their golden years.
Even small extras sent to your pension pot can grow significantly over the years, so start now.
How to make your 2022 resolutions actually happen
Hargreaves Lansdown recommends spending some time before the year ends figuring out where you are with your finances. Then take a new look at your debt, pensions and savings. This will help you set specific new targets for the year to come. Examples include “Save £1,000 in an emergency fund” or “Pay off my credit card debt.”
If you aren’t very clear about what your finances currently look like, a budget could be useful. This will help you understand where your money is going and whether you can free up some funds to direct towards your New Year’s resolutions.
