Everything you need to know about financial health check uk in the UK.
A financial health check is a comprehensive review of your current financial position—your income, expenditure, savings, investments, debts, insurance, pension provision and estate planning. Think of it as an MOT for your money. Just as you would service a car regularly to keep it running well, reviewing your finances periodically ensures you are on track to meet your goals and helps you spot problems before they become serious.
Whether you do it yourself or with the help of a professional adviser, a financial health check provides clarity, confidence and a plan of action. It is relevant at every life stage, from your first full-time job through to retirement and beyond.
As a minimum, you should conduct a full financial review once a year. However, a review is also warranted whenever you experience a significant life event, such as:
These events can fundamentally alter your financial needs, priorities and risk profile. Failing to adjust your plans accordingly is one of the most common causes of financial regret.
Start by mapping out exactly what comes in and what goes out each month. List all sources of income: salary, rental income, investment dividends, benefits and any side-income. Then list all expenditure: fixed costs (mortgage or rent, council tax, utilities, insurance, loan repayments) and variable costs (groceries, transport, entertainment, clothing, subscriptions).
The aim is to identify your disposable income—the surplus after all essential spending. If your outgoings exceed your income, you have an immediate problem to address. If you have a healthy surplus, the question becomes whether it is being put to work effectively through saving, investing or debt repayment.
💡 Use your bank statements or a budgeting app to track spending for at least three months. Many people are surprised by how much they spend on non-essential items such as subscriptions, takeaways and impulse purchases. Small leaks can add up to hundreds of pounds per month.
List all outstanding debts: mortgage, personal loans, car finance, credit cards, overdrafts and any informal borrowing. For each debt, note the outstanding balance, the interest rate, the monthly payment and the remaining term. This gives you a clear picture of your total liabilities and the cost of servicing them.
As a general rule, prioritise paying off high-interest debts first (such as credit cards and overdrafts) before directing surplus cash towards savings. The interest rate on credit card debt—often 20% to 30% APR—far exceeds the return you are likely to earn on savings or investments.
Review your savings and investment accounts. Are you making the most of tax-efficient wrappers such as ISAs and pensions? Is your emergency fund adequate—most advisers recommend holding three to six months of essential expenditure in an easily accessible savings account? Are your investments diversified and aligned with your risk tolerance and time horizon?
Check the performance of your investments against relevant benchmarks. Poor performance does not necessarily mean you should switch, but it may warrant further investigation. Also review the charges you are paying—high fund fees and platform charges can significantly erode returns over time.
Insurance is the safety net that protects everything else in your financial plan. Review the following:
Life changes such as having a child, moving house or increasing your mortgage should all trigger a review of your insurance cover.
⚠️ One of the most common gaps in financial protection is income protection. While most people insure their home and car, far fewer insure their ability to earn an income—despite the fact that you are more likely to be off work due to illness than to die before retirement age.
Check whether you are on track to achieve the retirement income you want. Use a pension calculator to estimate your projected retirement fund based on current contributions and investment growth. If there is a shortfall, consider increasing your contributions or adjusting your retirement date. Review old workplace pensions from previous employers—consolidating them into a single pension may make management easier and could reduce charges, although some older pensions have valuable guarantees that would be lost on transfer.
A financial health check should also include a review of your will, Lasting Powers of Attorney and beneficiary nominations on life insurance policies and pension plans. If you do not have a will, making one should be a top priority. If your circumstances have changed since your will was last updated, have it reviewed by a solicitor. Check that your life insurance and pension death benefits are directed to the right people, as keeping nominations up to date is important.
A professional financial health check with a qualified adviser provides a thorough, objective assessment of your entire financial position. An adviser can identify gaps, inefficiencies and opportunities that you might miss on your own. Find a financial adviser through Nesto to book a comprehensive financial review.
Get matched with an FCA-regulated financial adviser in under 2 minutes — free, no obligation.
Find my adviser — it's free →