It’s a brand-new year, so what can we expect from our finances in 2025? For most of us it starts with paying for the excesses of the past month, whether they be what we’ve spent on ourselves or our loved ones. Credit card companies have never had it so good. Once that’s out of the way, there are tax payments to meet at the end of the month for those who don’t pay all their tax as they go along.

But what does Money Matters think we can expect from the rest of the year? Well I’m not sure the news is likely to be great. Those on a state pension are protected by the ‘triple lock’, so should at least keep pace with inflation, which is good to know.

Employers will be wrestling with the increases in National Insurance

Those of us relying on a salary may find it a bit tougher as employers wrestle with the increases in employers’ National Insurance announced in the recent Budget. I’ve heard stories about companies planning to cut staff in order to afford it, to reduce staff hours, or to give under-inflationary pay rises. Unfortunately, those who simply cannot afford it may go to the wall and I fear we will hear stories along that line as the year unfolds. Maybe even a household name or two – a supermarket, a bank or even your favourite football team – will hit the headlines.

Inflation should remain largely under control and close to government targets, unless employers opt to pay for the National Insurance hike by putting up prices rather than cutting staff costs, in which case we may see a return to higher-than-expected levels.

Base rate is expected to fall

Interest rates are supposed to go hand in hand with inflation, rising when it needs to be dampened and reducing as it comes under control. Base rate is expected to fall this year, but maybe that won’t happen as quickly as borrowers would like. Savers will be happy, though.

There will be the lucky few whose businesses are in the right sector at the right time, whose fortunes will flourish. And we all still dream, of course, that we are the next big lottery winner.

Whatever you do with your money in 2025, look after it and have yourself a prosperous New Year.