Think of your finances like a car you depend on every day. It gets you where you need to go, but without the occasional service it can slowly drift from peak condition. Small issues go unnoticed until they become bigger problems. A financial MOT works in the same way: it is a structured review of your current arrangements designed to make sure everything is still working as it should, and to spot any gaps or opportunities before they become costly.
It is not just about identifying problems. A good review is also an opportunity to adjust your plans as your life changes, and to make sure your money is working as hard as it can for you.
Are your retirement savings on track?
It is easy to set up a pension and then largely leave it alone. But life changes, markets move and inflation gradually erodes the real value of your savings. What looked like a sensible contribution level five years ago may no longer be sufficient today.
A financial MOT is a good moment to revisit your pension projections: how much is in your pot, how is it invested, and is it realistic to expect it to deliver the retirement you have in mind? If the answer is uncertain, that is worth knowing sooner rather than later, while there is still time to adjust.
Is your investment portfolio still balanced correctly?
Over time, the mix of assets in your portfolio can drift from its original allocation without any deliberate decision on your part. A period of strong equity market performance, for example, can leave you holding proportionally more in stocks than you intended, increasing your overall risk exposure.
Rebalancing periodically — bringing your portfolio back to its target allocation — is one of the more straightforward ways to keep your investment strategy aligned with your goals and your risk tolerance. It is worth reviewing this more frequently when markets are volatile, as recent events have again illustrated.
Do you have the right protection in place?
Reviewing your protection arrangements is one of the most important but commonly overlooked parts of a financial check-up. Do you have life assurance, income protection or critical illness cover? And if so, does the level of cover still reflect your current circumstances?
Coverage that was set up years ago may no longer be appropriate. Your income may have grown, your mortgage may have changed, or you may now have dependants who were not in the picture when the policy was written. Verifying that your cover matches your current situation is a straightforward step that can make a significant difference if you ever need to rely on it.
Are you investing as tax-efficiently as you could be?
Without regular reviews, it is easy to miss allowances and opportunities. Are you making the most of your annual ISA allowance? Are your pension contributions structured to make full use of the tax relief available? Are any investments sitting in the wrong hands from a tax perspective?
Tax rules change from year to year, and a review is a good way to identify whether your current arrangements still make sense in light of the latest rules and your current position.
Have your goals changed?
It is worth stepping back occasionally to ask whether your financial plan still reflects what you actually want. Priorities shift. You may have achieved some of your earlier goals, or new ones may have emerged: buying a second property, helping children onto the housing ladder, starting a business, or simply re-evaluating what retirement looks like for you.
A financial MOT provides the space to reassess, update your objectives and make sure your plan is pointed in the right direction.
How often should you do this?
For most people, a thorough review once a year is a reasonable baseline, with additional check-ins if something significant changes in your life, whether that is a new job, a change in family circumstances, an inheritance or a shift in the economic environment.
We carry out regular reviews as a standard part of our ongoing client relationships, but we also welcome people who simply want a fresh perspective on where they stand. If you are based in Worcestershire or Warwickshire and would like to talk through your current arrangements, we are happy to help.
The value of investments can fall as well as rise. You may get back less than you invest. Tax treatment depends on individual circumstances and may be subject to change. This article is for information only and does not constitute personal financial advice.