We all have jobs we put off – the charity-shop bags gathering dust, the dry-cleaning pile that keeps growing. But when it comes to your finances, procrastination can be an expensive habit.
Leaving an insurance review or savings check until another day might seem harmless, but putting off important money decisions could mean missing out on better deals, paying more than you need to or leaving yourself financially exposed.
Kara Gammell, of price comparison site MoneySuperMarket, said: “It’s easy for life admin to slip down the priority list when we’re juggling work, family and everyday commitments, but delaying certain financial tasks can have a real impact on your wallet.
“Our research shows that nearly two in five people say putting off life admin has already cost them money, whether that’s through missing a better deal, paying late fees or staying on an uncompetitive tariff for longer than necessary.”
We’ve spoken to financial experts about the money jobs we’re most likely to put off, and why it pays to get them ticked off your to-do list.
Writing a will
Fewer than half (40pc) of UK adults have a will, according to recent MoneySuperMarket research. Meanwhile, two in five adults (42pc) say they have put off writing one.
Andrew McManus, of IMD Solicitors, said: “There isn’t really a sensible figure you can put on the cost of not making a will. The issue is that, without one, you can end up with a result that you never intended.”
If you die without a will, your estate is distributed under the intestacy rules, which might mean your assets don’t go where you would want.
For example, when someone dies without a will and leaves behind both a spouse or civil partner and children, the spouse or civil partner currently receives the first £322,000 of the estate, their personal possessions and half of the remaining estate. The other half passes to their children or descendants.
But perhaps you wanted everything to go to your spouse to make the most of the spousal inheritance tax exemption, or maybe you wanted your children to inherit certain things. Without a will, there’s a chance none of this will happen.
Mr McManus said: “If you have a house, savings, investments and pensions, it doesn’t take an exceptionally wealthy person to have quite a substantial estate.”
Rules can be more complex for unmarried couples, although this could change under new plans put forward by the Government.
Once a will is in place, don’t simply store it away and forget about it. Make sure you review it regularly, particularly after a significant life event, such as getting married or divorced, so it still reflects your wishes.
Buying or updating life insurance
Buying a life insurance policy is another task that can be easy to leave until another day – perhaps you don’t feel you have the time to sit and research it, or it feels too overwhelming.
But the longer you put it off, the more expensive it can become, as premiums generally rise with age.
Figures from GoCompare show the average monthly life insurance premium for someone aged 20 to 29 is £8, compared with £18 for someone aged 40 to 49 and £28 for someone aged 50 to 59.
It’s also important to review existing policies as your circumstances change, to ensure your family remains adequately protected.
Paula Llewellyn, of financial services group Legal & General (L&G), said: “Buying a home, remortgaging, having a child or taking on new financial commitments can change the amount of protection a household needs.”
If your circumstances have changed, but you haven’t updated your cover, you could find the policy no longer provides enough protection for your family. And if the worst should happen before you get around to taking out any cover at all, then your family could miss out on thousands just when they need the money most.
Increasing pension contributions
If you’ve received a pay rise or started a new job, boosting your pension contributions might not be top of your priority list.
Yet even a small increase can make a meaningful difference to your retirement savings, especially when combined with employer contributions, tax relief and years of potential investment growth.
For example, paying an extra £45 per month into a pension from age 45 to 68 could add £45,825 to the final pot, according to L&G figures.
Ms Llewellyn added: “If you’ve changed employers, it’s also worth checking any pensions you’ve built up along the way. Bringing pension pots together can make them easier to manage, but it’s important to check if you’d lose any valuable benefits before transferring.”
Switching services and subscriptions
Three in five (60pc) UK adults put off managing or switching services such as energy, broadband and subscriptions, according to MoneySuperMarket.
But leaving these tasks on your to-do list could mean paying more than you need to, particularly if a contract has ended or a better deal is available elsewhere.
With energy bills on the rise, it’s worth checking whether you could cut costs by switching. MoneySuperMarket data show households moving to a fixed-rate energy tariff could save up to £382 a year.
You could save a further £395 a year by moving to a new broadband deal, according to Uswitch.
Using a price comparison site can make it quick and easy to check whether a better deal is available. Check when your existing contract ends, as leaving early could mean paying an exit fee.
Reviewing savings
Research from L&G found that more than a quarter (28pc) of people haven’t reviewed their savings rate in the past three years.
But it’s worth checking our best buy savings pages regularly, as leaving your money in an account paying a low interest rate can mean missing out on hundreds, or even thousands, of pounds in interest.
For example, a £50,000 savings pot with an interest rate of 0.50pc would earn £250 in interest each year. But moving that £50,000 to a top-rate account paying 5pc would result in interest of £2,500 a year.
Ms Llewellyn said: “A regular check-in can help ensure your savings still reflect your goals and are working as hard as they can be by earning a competitive rate. Small differences in interest can add up over time, particularly if you’ve built up larger cash balances.”
Organising important documents
More than half of Brits (55pc) put off sorting out important documents, potentially because they feel overwhelmed or don’t know where to start.
But doing so can make life more difficult later, especially if you need to find paperwork quickly to deal with an estate, tax return, insurance claim or financial account. It could also cause problems for family members.
Mike Saraswat, of financial tech firm Stoa, said: “If somebody dies or becomes unable to manage their own finances, relatives or attorneys may suddenly need to identify pensions, savings, insurance policies and investments on their behalf.”
In addition, make sure banks, pension providers and other financial firms have your current contact details. If you move house, change your name or update your email address or phone number, tell your providers so you don’t miss important correspondence about your accounts.
Don’t delay any longer
If you’ve put off completing any of these financial tasks, set aside some time to work through them. Put a date in the calendar and start with the jobs that could have the biggest financial consequences, such as reviewing your insurance, savings and pension.
Ms Llewellyn said: “A few simple check-ins each year can help ensure your money is keeping pace with your life now and your future goals. Left unchecked, the financial cost of delaying these decisions can build quietly over time.”