The Sun - how to prepare your finances NOW major money changes in 2027

Borrowers should prepare for 2027 without trying to predict exactly how many rate rises there will be. Anyone whose fixed deal ends in the coming months should review their options early rather than wait for certainty.

Securing a suitable rate in advance can offer some protection if costs rise further, while still leaving scope to reassess if the market improves. The best preparation is not predicting the Bank of England, but making sure you have options.

Everyone should prepare now, not a few weeks before your mortgage rate expires. Check your end date, review what your payments could look like at higher rates and start looking at options around six months beforehand. Leaving it late can mean fewer choices and potentially hundreds of pounds more each month.

It is also worth looking at the wider cost of debt. Credit cards, loans and other borrowing can seriously weaken household resilience. A remortgage, further advance or secured loan will not be right for everyone and may mean repaying debt over longer, but used appropriately it can cut monthly outgoings and create valuable breathing space.

That extra headroom can make your finances much stronger and better able to absorb further increases in energy, food or other essential bills without immediately falling back on expensive credit.

On mortgages, I'd treat the confident forecasts with some caution. Nobody can credibly promise four rate rises by next July, because the swap and gilt markets that set fixed pricing can turn quickly, and in both directions. Reorganising your finances around a prediction that specific is a gamble. What actually helps, whichever way rates go, is knowing the date your current deal ends, because that's the only date that really matters for you. In the months before it does, you can usually line up a new rate in advance and still switch to something cheaper if pricing improves before you complete, so you're covered without betting on the forecast. And if you're coming off a cheap fix taken a few years ago, build in some room for a higher monthly payment now, so it isn't a shock later. Savings, pensions and the rest I'd leave to the specialists. Mortgages are the bit I can speak to.

For many, bringing their pension pots into the inheritance tax net from April 2027 will be the biggest tax change of their financial lives. Almost overnight, some families could be looking at potential inheritance tax bills running into hundreds of thousands of pounds.

Members of public-sector defined benefit schemes may have less to worry about, although their AVC pots could still be caught. Those who really need to pay attention are those with substantial defined contribution pensions.

Unmarried couples need to be especially careful because they do not benefit from the inheritance tax spouse exemption. That means this is not simply an issue for people in their 70s and 80s. Unmarried couples in their 40s or 50s with decent pension pots could potentially lose out too.

For some, retiring earlier, drawing more from their pension and spending more during their lifetime may be the smart financial choice. And unmarried couples might want to tie the knot in 2027.

Mortgage rate choice should reflect individual needs, and match life events and future borrowing needs. But whether a short or long term rate is best advice, being able to react quickly is paramount at any time, as mortgage rates can be withdrawn with little or no notice. The main challenge is always around documents, borrowers need to be able to download bank statements, payslips and other evidence of income to support almost every type of mortgage. If they are missing or have incorrect details, this can delay an application and cause it to miss important time constraints. Also, ensure the address is correct on all your documents, including your Driving Licence, and that it's in date. Clients with good paperwork skills will always be on top of their brokers' workflow. A 0.2% rate difference from a delayed application can equate to around £2500 in extra interest on a 5yr fixed deal, so being Document-ready can really make a difference.

Anything can happen between now and 2027 – the important thing for aspiring homeowners or movers is to keep your eye on the ball. It's not about timing the market, it's about staying focused on achieving your goal: buying somewhere you will love to live.

In practical terms, it's important to give yourself time to get mortgage-ready. Make sure you can evidence your income and the growth of your deposit. Get your credit file in shape. And find yourself a trustworthy mortgage broker to help you find the right mortgage.

Remortgagers should begin reviewing their options as early as they can, because locking in a new rate can protect you from later rate increases. Lenders like Gen H give you 6 months' early access.

Especially in a loud media environment, buying a home is a bit like a horse race. Try not to worry about what other people are doing. Staying focused on what's right for you is the best way to achieve your goal.

Borrowers can look to lock in a new fixed rate six months before their current deal ends. That way, they can protect themselves should rates increase, but also keep open the opportunity for locking in lower rates should they come up between now and then.

For pensions, it's important to consider the value of your estate and how the inheritance tax position will change from April 2027. For some, there's a double-whammy effect of pensions now being taxable at 40% inheritance tax, and the loss of the Residence Nil Rate Band, which brings another £350k between a married couple into the estate at 40% inheritance tax.

Under 65s savings into Cash ISAs should consider whether stocks and shares ISAs would make more sense for their situation, in which case the new £12,000 limit on Cash ISAs becomes irrelevant. This will be driven by their wider circumstances, and ensuring they still have enough cash on the sidelines.

027 is shaping up to be the year when “I’ll deal with it later” becomes expensive.

Mortgages: Do not gamble your remortgage on forecasts. If you are within six months of expiry, start looking now. Secure something sensible and review it if rates improve.

Savings: Under-65s will only be able to put £12,000 a year into Cash ISAs from April, although the overall ISA allowance stays £20,000. Use this year’s allowance properly and start deciding what money genuinely needs to stay in cash versus what is long-term.

Pensions: From April 2027 most unused pensions enter the IHT estate, but that does not mean “spend the pension before you die”. Review beneficiaries, withdrawals and the whole estate before touching anything.

Bills: Food inflation could exceed 6% next year. Build breathing room now.

The worst 2027 strategy is waiting until 2027.

Cash savers, read the detail. The overall ISA allowance stays £20,000 a year. From 6 April 2027, only cash would be capped, at £12,000, for savers 64 or under at the end of the tax year. The cap is not law yet. Interest on cash in a stocks and shares ISA would be taxed. This tax year runs to 5 April 2027 and all £20,000 can still go into cash. The pension change is already law, and whether to splash the cash isn't for me to say. For deaths from 6 April 2027, most unused pension funds and death benefits form part of the estate for inheritance tax. Anything left to a husband, wife or civil partner stays exempt. Whoever sorts out the estate reports and pays. Anyone who gets pension money is liable for tax on their share. The bill is due six months after the end of the month of death. The estate can tell the scheme to hold back up to half of a beneficiary's share and pay HMRC out of it. Even then, six months isn't long enough when a family is still working out what an estate is worth.

Brent's touching $109, bond yields sit at multi-decade highs, UK taxes are the highest since 1948 with more coming next month, and an inflationary surge is stacking up ever higher rates. The end of 2026 and into 2027 will be tough so don't waste time. Lock in your next mortgage deal up to 180 days before your current fix ends. Overpay up to your penalty-free limit now, before rates bite harder. From April, the Cash ISA limit for under-65s drops to £12,000, and transfers from Stocks & Shares ISAs into cash are blocked. Use your full £20,000 tax-free allowance in 2026/27 while you still can; existing balances are grandfathered. Unused pensions join your estate for IHT at up to 40% from April 2027, so stop hoarding them. Draw earlier and use lifetime gifting under the 7-year rule instead. With food inflation and energy bills still biting, audit your direct debits and build a cash buffer worth a 1% mortgage rate rise.