Important information - the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

It’s January. It’s cold, it’s gloomy and frankly it’s turning into a bit of a slog already. The festive season is well and truly over, your day-to-day finances might well be heaving under the strain of all that Christmas excess and despite all your best intentions those new year resolutions are starting to rankle with you. And we’re only a few weeks in.

But don’t worry, you are not alone. Dubbed ‘Blue Monday’, the third Monday of the year, also known as the most depressing day of the year, landed this week.

Admittedly, there isn’t much science behind it. It’s a stunt dreamt up by a life coach back in 2005. But we don’t need any faux formula to tell us why a combination of factors, from the weather and levels of debt to the amount of time elapsed since Christmas and general feelings of low motivation, makes January a slog.

Of course, though, January doesn’t have to be a time of doom and gloom. For many it is an opportunity to kick-start good habits, set new plans in place and make a fresh start. So, while it may “officially” be the gloomiest time of the year, here are some positive habits we can all nail.

1. Pay yourself first

Whether it’s saving more into your pension, or starting a regular investment, make a commitment to set aside some of your hard-earned money in 2024 for yourself.

We can all save up to £20,000 into an ISA in each tax year, so start yours now. You don’t need a lump sum, you can save as little as £25 a month into a Fidelity ISA.

And as we explain in our Investment Principles, small amounts can make a big difference. For more on the principles for good investing, click here.

ISAs aren’t the only tax-efficient way to save. With a Fidelity Self-Invested Personal Pension (SIPP) you can start by investing as little as £20 into your pension every month. This will then be automatically topped up to £25 because of the tax relief that pension contributions get.

And if you are self-employed and have a limited company, consider making contributions from your limited company. These will then be considered employer contributions and these can usually be offset as a business expense which will reduce your potential corporation tax liability. However, unlike personal contributions, employer contributions do not attract tax relief.

You can now pay up to £60,000 in each tax year into your pension pot, including employer contributions (this figure does not include any transfers you wish to make from other pension providers; there is no limit to how much you can transfer).

If you pay in more than this, you could end up paying up to 45% tax. However, you can use unused annual allowances from the previous three tax years. Up until April 2023, the maximum contribution you could pay in was £40,000, so, if you haven’t made any payments into a pension over the past three years, you could potentially pay in up to £120,000 in additional contributions this year, without incurring any tax.

You can download our carry forward guide here to find out more. 

2. Simplify your finances

Maybe you’re trying to keep track of a number of different pensions with various previous employers. Or perhaps you’ve got three different ISA accounts or simply too many funds in your investment portfolio and it’s dragging your performance down. It’s time to simplify things.

Consolidating your various pensions into one will make checking you’re on target easier and could save you money. Similarly, switching to one ISA can make it easier to see how your overall portfolio is growing. And it can be immediately financially beneficial too. If you transfer any pensions, ISAs or other investments to Fidelity by 1 April, you could be in line for cashback of between £200 and £2,000.

Just remember one major exception to the simplification rule applies when it comes to choosing exactly which asset classes to invest in. In this case you want to avoid putting all your eggs in one proverbial basket. Instead, maintaining a diversified portfolio is key to managing risk. As we explain in our principles for good investing, it’s better to hold a mix of investments.

3. Save and invest without sacrifice

Be honest, how often do the ingredients for that weekly food subscription end up rotting in the fridge because you ended up eating out, or simply fancied something simple instead? And is that streaming service really worth the monthly cost when you exhausted every episode of Keeping up with the Kardashians years ago and you’d completely forgotten you even had Netflix any more?

It’s an old one, but still a good one. This new year take another look at all the services and add-ons and extras you pay for and see how many you really need.

Make a resolution to make a saving on one thing you’re frittering money on unnecessarily - and then invest the money you would have wasted, instead.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. This information is not a personal recommendation for any particular investment. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). It’s important to understand that pension transfers are a complex area and may not be suitable for everyone. Before going ahead with a pension transfer, we strongly recommend that you undertake a full comparison of the benefits, charges and features offered. To find out what else you should consider before transferring, please read our transfer factsheet. If you are in any doubt whether or not a pension transfer is suitable for your circumstances or if you are unsure about the suitability of an investment you should speak to one of  Fidelity’s advisers or an authorised financial adviser of your choice.

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