The annual financial review

Almost every recurring financial cost is negotiable, reviewable or switchable, and almost none of it gets reviewed, because there is no occasion on which it happens.

Making the occasion

The practical step.

Diarise one afternoon a year, at the same point each year, and treat it as fixed.

Gather statements, policies, payslips and account details beforehand.

Work through a written checklist rather than improvising.

And record what you changed and what you saved, which makes next year's session easier to justify.

The fixed costs

Where the largest savings are.

Mortgage: check when any deal ends and arrange the next one, since reverting to a standard variable rate is expensive.

Energy: compare tariffs and check eligibility for any support scheme.

Insurance: home, contents, car, life, travel and pet — never accept an auto-renewal without comparing.

Broadband and mobile: check whether you are out of contract, since out-of-contract pricing is substantially higher.

Subscriptions: audit every recurring payment across all accounts and cards.

Local taxes: check band, discounts and exemptions.

And any professional or membership fees.

The banking and savings

Quick checks.

Savings rates against current best available, since providers rely on inertia and legacy accounts pay poorly.

Whether any bonus rates have expired.

Whether balances exceed deposit protection limits at any single institution.

Whether the account structure still fits — bills, spending, sinking fund, emergency fund.

Whether any packaged account fee is justified by benefits actually used.

And whether a switching incentive is available on an account that would otherwise suit.

The debt

Annual review.

Total owed and to whom, with rates.

Whether any promotional rate is about to expire, which is the most commonly missed item.

Whether a balance transfer or consolidation would reduce the rate.

Whether payments should increase.

Whether any debt can be cleared entirely.

And whether the overall position is improving, which is the number that matters.

The pension and protection

Where the largest long-term effects are.

Contribution rate, and whether you are capturing the full employer match.

Whether to increase contributions, particularly after a pay rise.

Charges on the pension, which compound over decades.

The fund choice, particularly whether a default fund is appropriate for your age and circumstances.

Any lost pensions from previous employers, which tracing services can find.

State pension record and any gaps that could be filled.

Life insurance, income protection and critical illness cover against current circumstances.

And beneficiary nominations on pensions and policies, which override wills and which go out of date after life changes.

The tax and admin

Once a year.

Check your tax code or equivalent against your circumstances.

Claim any reliefs and expenses you are entitled to, since these frequently require a claim and can be backdated.

File any return due, early rather than at the deadline.

Check your credit files at all agencies, correcting errors.

Do a benefits check, since circumstances change and entitlements are under-claimed.

And update the record of accounts, policies and documents, with a note of where everything is.

The documents

Which people postpone indefinitely.

Is there a will, and does it still reflect your wishes?

Are guardians named for any children?

Is there a power of attorney?

Are pension and policy nominations current?

Does someone know where everything is?

And are records being retained for the required period and disposed of securely thereafter?

The forward look

Briefly.

What large costs are coming in the next year, and is the sinking fund sized for them?

What is the savings and debt target for the year?

Has anything changed — income, household, health, work — that should change the arrangements?

And what is the one structural change that would improve things most, which is generally either a fixed cost or a contribution rate.

Why it works

The arithmetic.

An afternoon spent on renewals, rates and contributions frequently produces a saving that would take months of small daily restrictions to match.

It requires no ongoing willpower, since each change persists.

And it catches the things that silently deteriorate — expired deals, drifted rates, outdated nominations — which is where most households lose money without noticing.

General information only, not financial advice. Consult a regulated adviser or a free advice service about your own circumstances.