Savers could boost the value of their pots with one simple switch, a finance expert says.
Chris Rudden, head of investment consultants at digital wealth management firm Moneyfarm, said: "Some of the scariest financial mistakes are the ones that can stay unnoticed for years. A forgotten pension, an unnecessary fee, or cash that has been sitting idle for too long may not feel particularly frightening in isolation, but over the long term these small oversights can make a real difference to your financial future. The good news is that getting your finances in order doesn't need to be scary."
Moneyfarm shared a range of tips to help you maximise the potential of your savings and investments.
Investing idle cash
The firm says while cash plays an important role in any financial plan, meaning you have emergency savings and funds available for short-term spending, you could be missing out on potentially significant investment gains if it just sits there accruing interest at a low rate for years.
The firm says if, instead, you look at what your cash is actually doing for you, how much you'll actually need readily available and figure out some longer-term savings goals, your money could start working harder for you.
Moneyfarm raised the example of someone leaving £10,000 sitting in a low-interest account with a return of 1.5% a year. After 10 years of compounded interest, the pot would be worth around £11,600. However, if that same £10,000 were invested in stocks and shares and grew at a conservative rate of 7% per year, it could reach around £19,600. That's a difference of some £8,000 over the decade.
Checking hidden fees
Mr Rudden said: "Small differences in charges are easily overlooked, but over time they can make a real dent in your returns. If you have several providers for your pensions or investments, you could be paying multiple sets of fees without realising it. So it is always worth double-checking what you are spending."
To see how quickly these fees can add up, imagine £20,000 invested in an ISA for 10 years, growing by an illustrative 5% a year before fees. With total annual charges of 0.6%, it would grow to around £30,800. But with charges of 1.5%, it would only reach around £28,200. A gap of just 0.9 percentage points a year would leave the investor with around £2,600 less.
Avoiding snap decisions
Watching the value of your investments fall can be unsettling, but making a snap decision based on short-term market movements risks locking in losses and taking you away from your longer-term plan, says Mr Rudden.
Instead of focusing on the latest shifts in the market, he suggested returning to the reason you invested in the first place. Have your goals changed? What about your timeline? If not, short-term volatility alone may not be a reason to abandon a long-term strategy.
For example, if a portfolio drops 20% and an investor withdraws 20% at the lowest point, the portfolio is now 40% smaller. Recovering to the original value would require a 66% gain, compared to just 25% if no withdrawal was made during the downturn. This risk is especially acute for those in the buildup to or the early years of retirement, when large portfolios are most vulnerable to permanent damage from poor return sequencing.
Consolidating old pensions
If you've changed jobs a few times, there could be old workplace pensions sitting in the background that you haven't thought about for years. You wouldn't be alone, as according to the Pensions Policy Institute, more than three million UK pension pots are currently lost, worth around £18.7 billion.
Mr Rudden said: "Bringing old pensions together in one place can give you a clearer view of how much you have saved, how it is invested, and what fees you're paying, helping you feel more informed and in control of your financial future."
Mr Rudden also said: "It is important to regularly revisit your investments as well as your appetite for risk as this often changes throughout different life stages. The challenge is trusting the process by reviewing your plan and your goals consistently, rather than reacting to every movement in the market."
