Have the spare cash

Inflation is running at 3.1%, and finding a savings account paying above that is impossible. But many experts claim you can reasonably expect investments to grow by about 4% a year after fees are taken into account, or more if the stock market has a strong run.

If you invested £50 a month for 10 years and enjoyed a 3.9% return, you would end up with £7,348, according to investment firm Fidelity. That’s growth of £1,348 on your contributions. Carry on for 20 years and your profit rises to £6,193.

If you are in it for the very long term, and are lucky, your returns may be supercharged thanks to the power of compounding. Like a snowball rolling down a hill, your investment earns returns, and those gains are reinvested and start earning returns, too.

However, remember investing means taking some risk – it’s possible investments could fall in value, so this isn’t for everyone. First, you need some cash set aside for emergencies, so allocate some of your savings to that. It’s also vital to tackle any expensive debt, such as credit or store cards, before diving into the stock market.

Assess your risk

Before choosing where to put your money, decide on your risk profile. In other words: how comfortable are you with seeing the value of your investments fall?

As a rule, the sooner you need your money, the less risk you should take. Online investment providers designed for self-starters, such as Nutmeg, Evestor, Wealthify, and sustainable investment provider Clim8, simplify this. Pick from a few investment options, rather than thousands of funds, after the providers have asked basic questions about your preferences and goals to match you to suitable options.

Start small

Investing a small amount every month is a great way to get started. You could, say, kick off with £25 a month into a single fund, although some providers will accept contributions from as little as £1.

Regular investing will help to iron out the highs and lows of the market. You buy more shares when the stock market is performing poorly and the price is lower, and fewer when their value rises.

You can invest a lump sum, too, if you have some cash savings you want to put to work in the stock market, for example, but this is a higher risk strategy as you might be buying at the top of the market.

Pick funds

Rather than buying shares in individual companies, funds are a good option for beginners. They hold a range of different companies, so you don’t have all your eggs in one basket.

“When it comes to choosing funds, I think of personal investors in three broad camps: ‘choose for me’, ‘help me choose’ and ‘I’ll choose myself’,” says Tom Stevenson, investment director at Fidelity International.

Many investment websites offer best-buy fund lists put together by experts, including Hargreaves Lansdown’s Wealth Shortlist, and Interactive Investor’s Super 60.

There are two main fund types: index trackers and active funds. Trackers, also known as passive funds, follow a particular market index such as the FTSE 100. They typically return the average of the market they invest in, and, as there is no one choosing the investments, they are the cheaper option.

Active funds are usually more expensive as they have a manager who chooses the shares they hold, aiming to beat the market.

You can pick from thousands of funds, such as those focusing on, for example, sustainable investments, smaller companies or emerging markets.

Holding a range of funds spreads your money and protects you from market falls. If one company falls in value, hopefully another will rise.

Go ready-made

If you don’t know where to start, you could go for a single, ready-made fund that holds investments from around the world.

Interactive Investor has a list of six quick-start funds. “These are well-diversified, multi-asset portfolios that are very competitively priced,” says Moira O’Neill, its head of personal finance. They include Vanguard’s LifeStrategy funds, each investing in thousands of global companies.

Alternatively, there are model portfolios on investment websites. These include a mix of some of the most popular funds and can be used as a template to build your own portfolio. AJ Bell Youinvest offers four ready-made options, tailored to whether you are cautious, balanced, adventurous or seeking income.

Check charges

Watch out for fees, as these can really eat into your returns. Investment providers either charge a percentage fee, based on how much you invest, or a fixed fee.

Comparetheplatform.com offers a simple calculator to help you find the most appropriate and cheapest provider. “A percentage charge is better for portfolios up to £50,000, and Vanguard is the cheapest but has a limited selection of investments,” says Bella Caridade-Ferreira, the chief executive of Comparetheplatform.

If you are investing a larger lump sum, you will be better off with Interactive Investor, which charges £9.99 a month, including one free trade a month, she adds. As your investment grows, charges stay the same with a flat fee.

You’ll pay for your investments on top of this fee, and to buy and sell funds. Average charges on active funds are about 0.75%, which, on top of a 0.25% service fee, brings the total to 1% a year.

Use your Isa allowance

Wrapping your investments in a stocks and shares Isa means you won’t pay tax on profits, or need to include them on your tax return.

This tax year you can invest up to £20,000 in an Isa wrapper. You can invest all, or some, of your allowance in a stocks and shares Isa, and hold any investments you wish.

Stay invested

Investing can be a bumpy ride, but it generally pays to hold your nerve. You need a time frame of at least five years, ideally far longer.

If you can sit tight through market falls your investments may bounce back and go on to be worth more.

“Great years can often follow terrible ones,” says Richard Hunter, head of markets at Interactive Investor. “In 1974 the UK was beset by recession, a miners’ strike, three-day weeks and an oil crisis – the FTSE All Share tanked 55%. The following year it rose by 140%.”

If you want further help before investing, seek assistance from a financial adviser, but you will need to pay. You can find one local to you online on Unbiased or VouchedFor.

With the economy facing high inflation, the Federal Reserve ready to raise interest rates and rising tension from the conflict in Ukraine, 2022 is shaping up to be a bumpy ride for investors. So it’s crucial that investors stay disciplined. Building a portfolio that has at least some less-risky assets can be useful in helping you ride out volatility in the market.

The trade-off, of course, is that in lowering risk exposure, investors are likely to earn lower returns over the long run. That may be fine if your goal is to preserve capital and maintain a steady flow of interest income.

But if you’re looking for growth, consider investing strategies that match your long-term goals. Even higher-risk investments such as stocks have segments (such as dividend stocks) that reduce relative risk while still providing attractive long-term returns.

What to consider

Depending on how much risk you’re willing to take, there are a couple of scenarios that could play out:

• No risk — You’ll never lose a cent of your principal.
• Some risk — It’s reasonable to say you’ll either break even or incur a small loss over time.

There are, however, two catches: Low-risk investments earn lower returns than you could find elsewhere with risk; and inflation can erode the purchasing power of money stashed in low-risk investments.

If you opt for only low-risk investments, you’re likely to lose purchasing power over time. It’s also why low-risk plays make for better short-term investments or a stash for your emergency fund. In contrast, higher-risk investments are better suited for higher long-term returns.

Here are the best low-risk investments in March 2022:

1. High-yield savings accounts
2. Series I savings bonds
3. Short-term certificates of deposit
4. Money market funds
5. Treasury bills, notes, bonds and TIPS
6. Corporate bonds
7. Dividend-paying stocks
8. Preferred stocks
9. Money market accounts
10. Fixed annuities

Overview: Best low-risk investments in 2022

1. High-yield savings accounts

While not technically an investment, savings accounts offer a modest return on your money. You’ll find the highest-yielding options by searching online, and you can get a bit more yield if you’re willing to check out the rate tables and shop around.

Why invest: A savings account is completely safe in the sense that you’ll never lose money. Most accounts are government-insured up to $250,000 per account type per bank, so you’ll be compensated even if the financial institution fails.

Risk: Cash doesn’t lose dollar value, though inflation can erode its purchasing power.

2. Series I savings bonds

A Series I savings bond is a low-risk bond that adjusts for inflation, helping protect your investment. When inflation rises, the bond’s interest rate is adjusted upward. But when inflation falls, the bond’s payment falls as well. You can buy the Series I bond from TreasuryDirect.gov, which is operated by the U.S. Department of the Treasury.

“The I bond is a good choice for protection against inflation because you get a fixed rate and an inflation rate added to that every six months,” says McKayla Braden, former senior advisor for the Department of the Treasury, referring to an inflation premium that’s revised twice a year.

Why invest: The Series I bond adjusts its payment semi-annually depending on the inflation rate. With the high inflation levels seen in 2021, the bond is paying out a sizable yield. That will adjust higher if inflation rises, too. So the bond helps protect your investment against the ravages of increasing prices.

Risk: Savings bonds are backed by the U.S. government, so they’re considered about as safe as an investment comes. However, don’t forget that the bond’s interest payment will fall if and when inflation settles back down.

If a U.S. savings bond is redeemed before five years, a penalty of the last three months’ interest is charged.

3. Short-term certificates of deposit

Bank CDs are always loss-proof in an FDIC-backed account, unless you take the money out early. To find the best rates, you’ll want to shop around online and compare what banks offer. With interest rates slated to rise in 2022, it may make sense to own short-term CDs and then reinvest as rates move up. You’ll want to avoid being locked into below-market CDs for too long.

An alternative to a short-term CD is a no-penalty CD, which lets you dodge the typical penalty for early withdrawal. So you can withdraw your money and then move it into a higher-paying CD without the usual costs.

Why invest: If you leave the CD intact until the term ends the bank promises to pay you a set rate of interest over the specified term.

Some savings accounts pay higher rates of interest than some CDs, but those so-called high-yield accounts may require a large deposit.

Risk: If you remove funds from a CD early, you’ll usually lose some of the interest you earned. Some banks also hit you with a loss of a portion of principal as well, so it’s important to read the rules and check rates before you purchase a CD. Additionally, if you lock yourself into a longer-term CD and overall rates rise, you’ll be earning a lower yield. To get a market rate, you’ll need to cancel the CD and will typically have to pay a penalty to do so.

4. Money market funds

Money market funds are pools of CDs, short-term bonds and other low-risk investments grouped together to diversify risk, and are typically sold by brokerage firms and mutual fund companies.

Why invest: Unlike a CD, a money market fund is liquid, which means you typically can take out your funds at any time without being penalized.

Risk: Money market funds usually are pretty safe, says Ben Wacek, founder and financial planner of Guide Financial Planning in Minneapolis.

“The bank tells you what rate you’ll get, and its goal is that the value per share won’t be less than $1,” he says.

5. Treasury bills, notes, bonds and TIPS

The U.S. Treasury also issues Treasury bills, Treasury notes, Treasury bonds and Treasury inflation-protected securities, or TIPS:

• Treasury bills mature in one year or sooner.
• Treasury notes stretch out up to 10 years.
• Treasury bonds mature up to 30 years.
• TIPS are securities whose principal value goes up or down depending on the direction of inflation.

Why invest: All of these are highly liquid securities that can be bought and sold either directly or through mutual funds.

Risk:If you keep Treasurys until they mature, you generally won’t lose any money, unless you buy a negative-yielding bond. If you sell them sooner than maturity, you could lose some of your principal, since the value will fluctuate as interest rates rise and fall. Rising interest rates make the value of existing bonds fall, and vice versa.

6. Corporate bonds

Companies also issue bonds, which can come in relatively low-risk varieties (issued by large profitable companies) down to very risky ones. The lowest of the low are known as high-yield bonds or “junk bonds.”

“There are high-yield corporate bonds that are low rate, low quality,” says Cheryl Krueger, founder of Growing Fortunes Financial Partners in Schaumburg, Illinois. “I consider those more risky because you have not just the interest rate risk, but the default risk as well.”

• Interest-rate risk: The market value of a bond can fluctuate as interest rates change. Bond values move up when rates fall and bond values move down when rates rise.
• Default risk: The company could fail to make good on its promise to make the interest and principal payments, potentially leaving you with nothing on the investment.

Why invest: To mitigate interest-rate risk, investors can select bonds that mature in the next few years. Longer-term bonds are more sensitive to changes in interest rates. To lower default risk, investors can select high-quality bonds from reputable large companies, or buy funds that invest in a diversified portfolio of these bonds.

Risk: Bonds are generally thought to be lower risk than stocks, though neither asset class is risk-free.

“Bondholders are higher in the pecking order than stockholders, so if the company goes bankrupt, bondholders get their money back before stockholders,” Wacek says.

7. Dividend-paying stocks

Stocks aren’t as safe as cash, savings accounts or government debt, but they’re generally less risky than high-fliers like options or futures. Dividend stocks are considered safer than high-growth stocks, because they pay cash dividends, helping to limit their volatility but not eliminating it. So dividend stocks will fluctuate with the market but may not fall as far when the market is depressed.

Why invest: Stocks that pay dividends are generally perceived as less risky than those that don’t.

“I wouldn’t say a dividend-paying stock is a low-risk investment because there were dividend-paying stocks that lost 20 percent or 30 percent in 2008,” Wacek says. “But in general, it’s lower risk than a growth stock.”

That’s because dividend-paying companies tend to be more stable and mature, and they offer the dividend, as well as the possibility of stock-price appreciation.

“You’re not depending on only the value of that stock, which can fluctuate, but you’re getting paid a regular income from that stock, too,” Wacek says.

Risk: One risk for dividend stocks is if the company runs into tough times and declares a loss, forcing it to trim or eliminate its dividend entirely, which will hurt the stock price.

8. Preferred stocks

Preferred stocks are more like lower-grade bonds than common stocks. Still, their values may fluctuate substantially if the market falls or if interest rates rise.

Why invest:

Investing is risky by its very nature, so there's no such thing as a 100% safe investment — your capital is at risk and returns are not guaranteed. However, there are low-risk investments that can offer high returns. 

If you're looking for true stability and security, you should save rather than invest. Just bear in mind that savings products typically offer below-inflation rates that mean your money loses its spending power over time. To maintain or grow your wealth in the current economic climate, you likely need to accept an element of risk. 

Read on to find out how to make low-risk investments and adopt safe investment strategies in the UK in 2019.

1.Try peer-to-peer lending

Peer-to-peer consumer lending is a predictable and stable investment. The money you invest is lent directly to borrowers, who then pay their loan back with interest.

Read our guide: What is peer-to-peer lending?

The main risk in peer-to-peer lending is that borrowers default on their loans. However, the safest platforms have lots of measures in place to protect against this.

Here at Lending Works, we have a rigorous underwriting process to ensure that your money is only lent to creditworthy borrowers who are unlikely to default on their loan. We also have the Lending Works Shield, a contingency fund which is designed to make up for shortfalls. We offer high returns of up to 6.5% p.a. over five years.   

Read our guide: How safe is peer-to-peer lending?

Not only does peer-to-peer position itself as a low-risk investment, but you can also invest within a tax wrapper by opening an Innovative Finance ISA. This enables you to protect your returns from tax.

Read our guide: What is an Innovative Finance ISA?

2.Choose highly-rated bonds

When you invest in bonds, you lend money to a government or company under an agreement that they pay an annual interest payment (known as the coupon) and repay the loan once the term is up. Of course, the risk with this form of investment is that the bond issuer defaults. Bonds from reliable issuers are therefore lower risk, and typically have a smaller coupon.

Independent credit rating agencies such as Moody's give issuers an investment grade to indicate how likely they are to default. For example, the UK government has an Aa2 rating, showing that bonds issued by HM Treasury (known as gilts) are "subject to a very low credit risk" and are therefore a relatively safe investment.  Find out more about the rating system here.

3.Reduce risk with diversification

Diversifying your investments is an effective way to reduce risk. It means spreading your money across a variety of asset classes rather than having all your eggs in one basket, so that poor performance of one type of investment has a smaller overall impact.

Read our guide: How to diversify your investment portfolio

It's for this same reason that it's a sensible idea to invest in a fund rather than buy stocks and shares in specific companies. This spreads risk across 50–100 companies so that, rather than depending heavily on individual performance, returns rely only on a general positive trend. You'll also benefit from the expertise of a fund manager, who will give you an indication of how risky a fund is before you invest.

4.Think long-term

Most financial advisors recommend investing for a minimum of five years, and ideally ten. Trying to make quick gains is a risky strategy, as the market is volatile and needs time to 'even out'. So, as a rule of thumb: the longer you invest, the safer your money should be.

For the same reason, it can be a good idea to invest your money over a period of months rather than investing a lump sum all at once. This reduces the risk of becoming a victim of bad timing. 

5.Invest with FCA-regulated firms

With any savings or investment product, there's a risk that you will lose money as a result of the financial services company committing fraud, providing negligent advice or entering insolvency. However, you will benefit from certain protections in these situations if your provider is authorised by the Financial Conduct Authority (FCA). 

Firstly, FCA regulation gives you access to the free Financial Ombudsman Service (FOS). Established by Parliament, this body is responsible for settling disputes between financial companies and their customers, and has the legal power to demand compensation on your behalf. 

You may also benefit from free Financial Services Compensation Scheme (FSCS) protection. This allows you to claim compensation for unfair losses up to £50,000 per person, per institution if the investment firm is unable to meet the claim themselves.

So, while the FOS and FSCS will not cover poor investment performance, they protect against other types of risk that arise when investing. It's therefore well worth looking out for FCA-regulated products as part of a low-risk investment strategy. In order to maximise FSCS coverage, it may also make sense to invest no more than £50,000 with one institution.

Lending Works is authorised and regulated by the FCA. Our peer-to-peer lending products are covered by the FOS but are not eligible for FSCS protection. However, peer-to-peer lending platforms ringfence your funds and have back-up services providers in place to help protect your money should the firm have financial difficulties. Read more about the regulation of peer-to-peer lending.

Low-risk investing is a great option if you're disillusioned with poor savings rates but want to remain cautious. It's also typically a low-maintenance strategy, making it suitable if you're a first-time investor — or simply don't have the time or desire to manage a complex portfolio.  

Generally, when it comes to savings and investments, the higher the risk, the higher the potential returns. The right balance for you depends on your financial circumstances and attitude to risk, so it's well worth speaking to a financial advisor before making any decisions.

If you have any questions about low-risk investment through peer-to-peer lending or an Innovative Finance ISA with Lending Works, don't hesitate to contact our team. 

It is important that we highlight that with any peer-to-peer lending platform, your capital is at risk.

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Thinking about where to invest £10,000? The stock market is your best bet if you want to try to beat rising inflation.

Once you have your emergency fund of between three and six months’ worth of essential outgoings in an easy access account and have paid off any expensive debt, then you might want to consider investing the rest.

In this article we explain:

This article contains affiliate links that can earn us revenue*

Is investing right for me?

The decision to invest will depend on what else is going on in your life, so here are some things you should think about:

• Do you have an emergency buffer? The recommendation is between three and six months’ essential outgoings in an easy access savings account, so that you can get your hands on it when you need it.
• Are you planning a big life change such as having a baby or moving house? Make sure you have extra cash in a savings account.
• How much expensive debt, such as money owed on credit cards, do you have? You may well be better off putting your £10,000 towards that and switching to the best 0% balance transfer credit card.
• Have you considered overpaying your mortgage? It could save hundreds or thousands of pounds in interest.
• Are you about to retire soon or in ill health?

To mitigate risk, it’s recommended that you leave your money invested for at least five years. Investing is a good idea in the long run given than most banks offer paltry interest rates on savings accounts that don’t nearly beat the rising cost of living, measured by inflation.

Currently inflation in the UK is at 6.2%, while the average rate on savings across all banks is just 0.19%, with many offering just 0.01%.

If investing ticks the boxes, read on, but also check out our Investing for beginners guide.

Is £10,000 a good investment amount?

Yes, £10,000 is a good amount to invest. But as we mentioned, the longer you can leave your money invested, the better.

This will give it enough chance to grow and ride out any fluctuations in the stock market.

If you want to find out more about the basic principles of investing then we have produced a free online Investing for beginners course. Check out module onehere.

What is the best way to invest money?

1. Invest for a minimum five years

To get a decent return, you should invest for at least five to ten years. The longer you invest your money, the more time you have to:

• Accrue returns on your investment portfolio
• Ride out any market downturns
• Let your returns compound (grow in a snowball effect over time as returns get reinvested)

2. Choose a low cost platform

Fees can erode your pot over time, so we have outlined some of the best platforms for both cost and customer service here.

According to investment platform Vanguard, if you invested £10,000 for 30 years, assuming investment growth of 5% a year, your pot would be:

• 2% fee = £24,270
• 0.5% fee = £37,450

Watch out for early exit charges to access money within a few years of investing as well, as these can run into hundreds of pounds.

3. Choose a tax-efficient wrapper

You should use a tax-free wrapper to protect your investment returns from the taxman.

There are different types of tax-free financial products for you to consider, such as:

Within these products, you would then choose what to invest in. Here are tips on how to choose investment funds.

Where is the best place to put £10,000?

As mentioned in the previous section, there are tax-free wrappers you should use to invest.

Which one you choose depends on your investment horizon (that is, when you think you might want to cash in the investment):

Short term (between five and ten years):

If you are investing money and think you will want to access it in five to ten years time, one of the best ways to invest £10,000 is in a stocks and shares ISA.

This is because (unlike a pension), you can access the money at whatever age you want.

Medium term (ten to 30 years):

A stocks and shares ISA is likely to be most suitable. That is unless you will turn 55 within 30 years, in which case a pension might be a better tax wrapper for you.

If you’re unsure about the time horizon, you could invest in a pension and a stocks and shares ISA.

Long term(30 plus years):

The best way to invest £10,000 for the long term is in a pension. It comes with substantial tax perks that will increase your pot size:

• Invest in a pension and you get tax relief from the government
• Workers get free cash from employers if they are invested in a workplace pension scheme

NOTE: You can’t get your hands on a pension until you are 55 (rising to 57 in 2028). Check out our pensions guide for more on this.

If you are self-employed, consider a self-invested personal pension or ready-made personal pension. Ask your pension provider if you’re allowed to increase your contribution, or even pay a one-off sum into it.

If you are shopping for a pension, Fidelity* is one of our top-rated providers. Find out whyhere.

How to invest £10,000 wisely

Invest according to your attitude to risk. To work this out you need to consider your “capacity for loss” and your “risk appetite”.

• Capacity for loss = how much you can afford to lose
• Risk appetite = how you feel about losing money

You should ask yourself these questions first:

1. Are you happy for your £10,000 investment to fall in value every now and then?
2. Do you want higher returns compared to if you’d left your money in cash?
3. Can you resist the urge to panic and sell your investment if it falls below what you paid for it?

If you answered yes to the above, it sounds like you would be comfortable investing. Find out more in our beginner’s guide to investing.

How to spread investment risk

Many investment experts recommend a 60/40 mix. That is an investment portfolio invested 60% in equities (company shares) and 40% in bonds.

For higher returns, the best investment for £10,000 are shares or equity funds (which are made up of shares). You could invest in a tracker fund that mimics the performance of stocks listed on the FTSE 100, which is a low-cost way of investing in shares.

Remember shares are higher risk than bonds.

The best way to invest £10,000 is to diversify it across:

• Different asset classes – like shares and bonds
• Different sectors and countries – like emerging markets (such as India) and developed countries (such as the UK)

Spreading your investments this way can help level out any fluctuations or falls in prices, so you weather the bad times and benefit from the good.

Why not learn more about investing in our free, online, five-part beginners course to investing?

Should I choose a ready-made portfolio?

If you aren’t confident enough to buy and sell investments, you could let an investment manager do it for you. It’s now possible to invest with low-cost robo-advisers which make all the decisions on your behalf.

Some good examples of robo-advisers include Nutmeg* and Wealthify. We outline the best robo-advisers here.

In order to select a ready-made portfolio, the robo-adviser will ask you a number of questions to establish your:

• Timeframe
• Risk profile
• Investment goals

Robo-advice can be one of the best ways to invest £10,000 because it is cheaper than the DIY approach.

If you have a larger lump sum, check out our article: How to invest £50,000.

Which ISA is right for me?

ISAs work best when you pick the right one for your savings goal. Take this short survey to find out which ISA is right for you.

• It only takes a couple of minutes
• No personal details required

How do you double up £10,000?

The best way to double £10,000 is by investing for the long-term, rather than trying to get rich quickly.

Consider what returns you are looking to make and over what time period. But be realistic – you are unlikely to double £10,000 in a few years.

As tempting as it may be when you see some of the promised rates of returns on high-risk products or the rise of bitcoin, these are best avoided. That is, unless you absolutely know the risks and are happy to take them on.

Can you turn £10k into £100k?

Yes, this is possible but it would take decades.

You should probably expect investment growth of about 4% every year. So at that rate it would take about 60 years before your £10,000 pot grew to £100,000.

The key here is to remain invested for a long period of time and invest in assets with a high chance of return (like shares) in order to grow your pot to £100,000.

Another tip is to drip-feed money into your pot over time to give it the best chance of growing. Here’s how to invest with little money.

How can I invest ethically?

If you don’t want to invest in companies involved in industries like gambling, tobacco or alcohol production, consider ethical investing.

Find out more about this in our guide to ethical investing.

How to review your investments

If you’re looking for the best way to invest £100k, it’s important to consider the following questions to ensure you’re fully prepared when the time comes to make your investment. 

Should I see a financial advisor? 

Decisions about personal finances and investments can be overwhelming, especially if you aren’t an experienced investor. If you’re inexperienced or new to investing, or if you’ve suddenly come into money, it’s probably a good idea to see a financial advisor. 

A financial advisor will meet with you to determine what you want to achieve. Whether you’re looking to invest £50k, £100k or you have £10k to invest, a financial advisor can assess your situation and develop a comprehensive plan that aims to hit your financial goals. They can also typically invest your funds and set up accounts on your behalf, making the investment process less stressful for you. 

You should always ensure that your financial advisor is an authorised individual with approved designations, such as a certified financial planner (CFP), chartered financial analyst (CFA) or a chartered financial consultant (ChFC). 

How do I invest my money?

The method for how you invest £100k will depend on the investment vehicle you choose. When it comes to stocks and shares, you might want to use a stockbroker, fund manager or robo advisor to invest on your behalf (there’s more information about this in our guide to investing in the stock market).

If you would prefer to know your money is safe by depositing it into a competitive rate savings account, you can compare savings accounts online. 

Active vs. passive investing

The question of whether to invest actively or passively is hotly contested by investing experts. While passive investing is the approach favoured by experienced investors, there are certain benefits that come with active investing, too, especially if you’re new to investing. 

Active investing, as the name suggests, requires you to take a hands-on approach or a more ‘active’ role. This role will often be undertaken by a portfolio manager, who will try to beat the stock market using analysis and expertise that only they can really offer. A portfolio manager will usually have a team of investment experts and analysts who consider both qualitative and quantitative factors when trying to predict what the stock market is about to do. 

Passive investing, on the other hand, exercises more of a ‘buy and hold’ mentality and a more long-term approach to investing. The main difference between the two is that active investors are constantly trying to beat the market, whereas passive investors ride the stock market waves, keeping their eyes on rising stars and successful, established companies.  

What is my investment risk? 

While investing is ultimately about growing your money, there is also the risk that it could shrink, which is something that many people, unsurprisingly, aren’t comfortable with. When it comes to investing an amount as large as £100k, it’s important to weigh up the risks carefully, and consider how much you’d be comfortable with potentially losing. 

To determine your attitude to risk, there are free online questionnaires available which will recommend what investment vehicles you might want to look into, based on how much risk you’re willing to take. However, these should not be considered to be financial advice.

Should I diversify my investment portfolio? 

If you’re looking for the best, safest way to invest £100k, you might want to start by splitting it into smaller amounts and investing these ‘pockets’ of cash in different assets, increasing your security and reducing your risk of losing it all. Think of it as not ‘putting all your eggs in one basket’ when it comes to investing. 

You can build an investment portfolio by choosing to invest in a range of different assets, and this is something a financial advisor should be able to help you with. 

What to do with £10,000 is, of course, entirely up to you. One thing to be aware of is that with investing comes risk, and with risk comes unpredictability. The world of investing can seem overwhelming for those who don’t know their bonds from their shares, so we’ve highlighted seven of the best ways to invest £10k below: 

1. Investing £10k in your pension

If you were to invest £10k into your pension pot, you’ll not only benefit from government tax relief, but also from the free cash top-ups from employers if you’re in a workplace pension scheme. 

For the self-employed, it might be good to consider a self-invested personal pension or ready-made personal pension. Ultimately, investing in a pension is investing in your future. 

2. Stocks & shares ISAs

Stocks and shares ISAs are a great short to medium term investment option for tax efficiency. You won’t have to pay any income or capital gains tax on the interest you earn when you invest £10k into a stocks & shares ISA. 

3. Shares

When you buy stocks and shares in a company, you’ll earn money when the value of that company goes up. While this, of course, has an element of risk to it since the company’s value could also go down, you may also benefit from receiving regular dividends if the company does well. 

4. Bonds

Bonds represent a company or government debt. When a company or government issues a bond, they are issuing debt with an agreement to pay interest against the money you’re loaning them. They typically pay out annual interest while repaying their debt. Bonds are often considered a safer type of investment than stocks, especially for short-term investors.

5. Investment funds

An investment fund is where you pool your money or capital along with other investors to invest collectively and therefore make more money. With investment funds, however, you don’t have the same voting rights as you would with shares, but they are considered lower risk than just investing in one company.

6. Property

Investing in property, particularly in the buy-to-let market, is seen by most people in the UK as one of the safest forms of investment, generating reliable income in the form of rent. However, you must also consider the risks posed by the housing market and weigh up the value of your prospective returns against your mortgage. 

7. Commodities 

Commodities, such as precious metals, oil and stones are another option for investing. These, however, are subject to the same unpredictable fluctuations as other investments. You can usually invest in commodities via an Exchange Traded Fund, or EFT. 

Putting your money into a savings account with a competitive rate of interest is also a form of investing. If you’re looking to diversify your investment portfolio and keep some access to your cash, you might be better off investing your money in savings accounts with competitive rates of interest. 

A structured product is an investment where the return depends on a set of rules, rather than whether the shares or other assets in it gain or lose value. For example, a product might only pay out if the index or market that it’s linked to produces a certain level of performance over a certain period of time.

They can be one of any number of investment types that work in different ways.

Some examples are:

• guaranteed equity bonds
• guaranteed capital plans
• protected investment funds
• guaranteed stock market bonds

Some structured products give you an income, others offer capital growth (an increase in the overall value of your investment) and some offer both.

The way returns are calculated can mean that it is very difficult to understand how the investment might perform.

Some structured products guarantee that you’ll get back at least the amount you invest (full capital protection) but many don’t, so you might lose some or all of your money. Before you invest in a structured product, make sure you understand the risks. If you’re in any doubt, seek professional financial advice.

What to do with £10,000 is, of course, safe high return investments uk, entirely up to you. One thing to be aware of is that with investing comes risk, and with risk comes unpredictability. The world of investing can seem overwhelming for those who don’t know their bonds from their shares, so we’ve highlighted seven of the best ways to invest £10k below: 

1. Investing £10k in your pension

If you were to invest £10k into your pension pot, you’ll not only benefit from government tax relief, but also from the free cash top-ups from employers if you’re in a workplace pension scheme. 

For the self-employed, it might be good to consider a self-invested personal pension or ready-made personal pension. Ultimately, investing in a pension is investing in your future. 

2. Stocks & shares ISAs

Stocks and shares ISAs are a great short to medium term investment option for tax efficiency. You won’t have to pay any income or capital gains tax on the interest you earn when you invest £10k into a stocks & shares ISA. 

3. Shares

When you buy stocks and shares in a company, you’ll earn money when the value of that company goes up. While this, of course, has an element of risk to it since the company’s value could also go down, you may also benefit from receiving regular dividends if the company does well. 

4. Bonds

Bonds represent a company or government debt. When a company or government issues a bond, they are issuing debt with an agreement to pay interest against the money you’re loaning them. They typically pay out annual interest while repaying their debt. Bonds are often considered a safer type of investment than stocks, especially for short-term investors.

5. Investment funds

An investment fund is where you pool your money or capital along with other investors to invest collectively and therefore make more money. With investment funds, however, you don’t have the same voting rights as you would with shares, but they are considered lower risk than just investing in one company.

6. Property

Investing in property, particularly in the buy-to-let market, is seen by most people in the UK as one of the safest forms of investment, generating reliable income in the form of rent. However, you must also consider the risks posed by the housing market and weigh up the value of your prospective returns against your mortgage. 

7. Commodities 

Commodities, such as precious metals, oil and stones are another option for investing. These, however, are subject to the same unpredictable fluctuations as other investments. You can usually invest in commodities via an Exchange Traded Fund, or EFT. 

Putting safe high return investments uk money into a savings account with a competitive rate of interest is also a form of investing. If you’re looking to diversify your investment portfolio and keep some access to your cash, you might be better off investing your money in savings accounts with competitive rates of interest. 

Funds selected by our analysts

The Wealth Shortlist is designed to help investors build well-balanced and diversified portfolios. We put funds under the microscope to make sure the list only contains the funds that our in-depth analysis indicates have the greatest performance potential.

We never take payment or commission for funds to appear on the Shortlist.

To use the Shortlist to build your portfolio, you should:

For investors who don't feel comfortable building and maintaining their own portfolio we offer ready-made solutions, which how to make crores of money aligned to broad investment objectives. For those who want extra help, you can also ask us for financial advice.

The Wealth Shortlist includes funds across a range of sectors, and risk levels that won’t be right for everyone – it isn’t personal advice. A change to the list isn’t a recommendation to buy or sell. You’ll need to consider your own goals, attitude to risk and wider portfolio before making any investment decisions. Funds can fall as well as rise in value and you could get back less than you invest

Investing is risky by its very nature, so there's no such thing as a 100% safe investment — your capital is at risk and returns are not guaranteed. However, there are low-risk investments that can offer high returns. 

If you're looking for true stability and security, you safe high return investments uk save rather than invest. Just bear in mind that savings products typically offer below-inflation rates that mean your money loses its spending power over time. To maintain or grow your wealth in the current economic climate, you likely need to accept an element of risk. 

Read on to find out how to make low-risk investments and adopt safe investment strategies in the UK in 2019.

1.Try peer-to-peer lending

Peer-to-peer consumer lending is a predictable and stable investment. The money you invest is lent directly to borrowers, who then pay their loan back with interest.

Read our guide: What is peer-to-peer lending?

The main risk in peer-to-peer lending is that borrowers default on their loans. However, the safest platforms have lots of measures in place to protect against this.

Here at Lending Works, we have a rigorous underwriting process to ensure that your money is only lent to creditworthy borrowers who are unlikely to default on their loan. We also have the Lending Works Shield, a contingency fund which is designed to make up for shortfalls. We offer high returns of up to 6.5% p.a. over safe high return investments uk years.   

Read our guide: How safe is peer-to-peer lending?

Not only does peer-to-peer position itself as a low-risk investment, but you can also invest within a tax wrapper by opening an Innovative Finance ISA. This enables you to protect your returns from tax.

Read our guide: What is an Innovative Finance ISA?

2.Choose highly-rated bonds

When you invest in bonds, you lend money to a government or company under an agreement that they pay an annual interest payment (known as the coupon) and repay the loan once the term is up. Of course, the risk with this form of investment is that the bond issuer defaults. Bonds from reliable issuers are therefore lower risk, and typically have a smaller coupon.

Independent credit rating agencies such as Moody's give issuers an investment grade to indicate how likely they are to default. Safe high return investments uk example, the UK government has an Aa2 rating, showing that bonds issued by HM Treasury (known as gilts) are "subject to a very low credit risk" and are therefore a relatively safe investment.  Find out more about the rating system here.

3.Reduce risk with diversification

Diversifying your investments is an effective way to reduce risk. It means spreading your safe high return investments uk across a variety of asset classes rather than having all your eggs in one basket, so that poor performance of one type of investment has a smaller overall impact.

Read our guide: How to diversify your investment portfolio

It's for this same reason that it's a sensible idea to invest in a fund rather than buy stocks and shares in specific companies. This spreads risk across 50–100 companies so that, rather than depending heavily on individual performance, returns rely only on a general positive trend, safe high return investments uk. You'll also benefit from the expertise of a fund manager, who will give you an indication of how risky a fund is before you invest.

4.Think long-term

Most financial advisors recommend investing for a minimum of five years, and ideally ten. Trying to make quick gains is a risky strategy, safe high return investments uk, as the market is volatile and needs time to 'even out'. So, as a rule of thumb: the longer you invest, the safer your money should be.

For the same reason, it can be a good idea to invest your money over a period of months rather than investing a lump sum all at once. This reduces the risk of becoming a victim of bad timing. 

5.Invest with FCA-regulated firms

With any savings or investment product, there's a risk that you will lose money as a result of the financial services company committing fraud, providing negligent advice or entering insolvency. However, you will benefit from certain protections in these situations if your provider is authorised by the Financial Conduct Authority (FCA). 

Firstly, FCA regulation gives you access to the free Financial Ombudsman Service (FOS). Established by Parliament, this body is responsible for settling disputes between financial companies and their customers, and has the legal power to demand compensation on your behalf. 

You may also benefit from free Financial Services Compensation Scheme (FSCS) protection. This allows you to claim compensation for unfair losses up to £50,000 per person, per institution if the investment firm is unable to meet bitcoin investing for beginners ideas claim themselves.

So, while the FOS and FSCS will not cover poor investment performance, they protect against other types of safe high return investments uk that arise when investing. It's therefore well worth looking out for FCA-regulated products as part of a low-risk investment strategy. In order to maximise FSCS coverage, it may also make sense to invest no more than £50,000 with one institution.

Lending Works is authorised and regulated by the FCA. Our peer-to-peer lending products are covered by the FOS but are not eligible for FSCS protection, safe high return investments uk. However, peer-to-peer lending platforms ringfence your funds and have back-up services providers in place to help protect your money should the firm have financial difficulties. Read more about the regulation of peer-to-peer lending.

Low-risk investing is a great option if you're disillusioned with poor savings rates but want to remain cautious. It's also typically a low-maintenance strategy, making it suitable if you're a first-time investor — safe high return investments uk simply don't have the time or desire to manage safe high return investments uk complex portfolio.  

Generally, when it comes to savings and investments, the higher the risk, the higher the potential returns. The right balance for you depends on your financial circumstances and attitude to risk, so it's well worth speaking to a financial advisor before making any decisions.

If you have any questions about low-risk investment through peer-to-peer lending or an Innovative Finance ISA with Lending Works, safe high return investments uk, don't hesitate to contact our team. 

It is important that we highlight that with any peer-to-peer lending platform, your capital is at risk.

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With the economy facing high inflation, the Federal Reserve ready to raise interest rates and rising safe high return investments uk from the conflict in Ukraine, 2022 is shaping up to be a bumpy ride for investors. So it’s crucial that investors stay disciplined. Building a portfolio that has at least some less-risky assets can be useful in helping you ride out volatility in the market.

The trade-off, of course, is that in lowering risk exposure, investors are likely to earn lower returns over the long run. That may be fine if your goal is to preserve capital and maintain a steady flow of interest income.

But if you’re looking for growth, consider investing strategies that match your long-term goals. Even higher-risk investments such as stocks have segments (such as dividend stocks) that reduce relative risk while still providing attractive long-term returns.

What to consider

Depending on how much risk you’re willing to take, there are a couple of scenarios that could play out:

• No risk — You’ll never lose a cent of your principal.
• Some risk — It’s reasonable to say you’ll either break even or incur a small loss over time.

There are, however, two catches: Low-risk investments earn lower returns than you could find elsewhere with risk; and inflation can erode the purchasing power of money safe high return investments uk in low-risk investments.

If you opt for chris brown money earnings low-risk investments, you’re likely to lose purchasing power over safe high return investments uk. It’s also why low-risk plays make for better short-term investments or a stash for your emergency fund. In contrast, higher-risk investments are better suited for higher long-term returns.

Here are the best low-risk investments in March 2022:

1. High-yield savings accounts
2. Series I savings bonds
3. Short-term certificates of deposit
4. Money market funds
5. Treasury bills, notes, bonds and TIPS
6. Corporate bonds
7. Dividend-paying stocks
8. Preferred stocks
9. Money market accounts
10. Fixed annuities

Overview: Best low-risk investments in 2022

1. High-yield savings accounts

While not technically an investment, savings accounts offer a modest return on your money. You’ll find the highest-yielding options by searching online, and you can get a bit more yield if you’re willing to check out the rate tables and shop around.

Why invest: A savings account is completely safe in the sense that you’ll never lose money, safe high return investments uk. Most accounts are government-insured up to $250,000 per account type per bank, so you’ll be compensated even if the financial institution fails.

Risk: Cash doesn’t lose dollar value, though inflation can erode its purchasing power.

2. Series I savings bonds

A Series I savings bond is a low-risk bond that adjusts for inflation, helping protect your investment. When inflation rises, the bond’s interest rate is adjusted upward, safe high return investments uk. But when safe high return investments uk falls, the bond’s payment falls as well. You can buy the Series I bond from TreasuryDirect.gov, which is operated by the U.S. Department of the Treasury.

“The I bond is a good choice for protection against inflation because you get a fixed rate and an inflation rate added to that every six months,” says McKayla Braden, safe high return investments uk, bitcoin ios wallet reddit senior advisor for the Department of the Treasury, referring to an inflation premium that’s revised twice a year.

Why invest: The Series I bond adjusts its payment semi-annually depending on the inflation rate. With the high inflation levels seen in 2021, the bond is paying out a sizable yield. That will adjust higher if inflation rises, too. So the bond helps protect your investment against the ravages of increasing prices.

Risk: Savings bonds are backed by the U.S. government, so they’re considered about as safe as an investment comes. However, don’t forget that the bond’s interest payment will fall if and when inflation settles back down.

If a U.S. savings bond is redeemed before five years, a penalty of the last three months’ interest is charged.

3. Short-term certificates of deposit

Bank CDs are always loss-proof in an FDIC-backed account, unless you take the money out early. To find the best rates, you’ll want to shop around online and compare what banks offer. With interest rates slated to rise in 2022, it may make sense to own short-term CDs and then reinvest as rates move up. You’ll want to avoid being locked into below-market CDs for too long.

An alternative to a short-term CD is a no-penalty CD, which lets you dodge the typical penalty for early withdrawal. So you can withdraw your money and then move it into a higher-paying CD without the usual costs.

Why invest: If you leave the CD intact until the term ends the bank promises to pay you a set rate of interest over the specified term.

Some savings accounts pay higher rates of interest than some CDs, but those safe high return investments uk high-yield accounts may require a large deposit.

Risk: If you remove funds from a CD early, you’ll usually lose some of the interest you earned. Some banks also hit you with a loss of a portion of principal as well, so it’s important to read the rules and check rates before you purchase a CD. Additionally, if you lock yourself into a longer-term CD and overall rates rise, you’ll be earning a lower yield. To get a market rate, you’ll need to cancel the CD and will typically have to pay a penalty to do so.

4. Money market funds

Money market funds are pools of CDs, short-term bonds and other low-risk investments grouped together to diversify risk, and are typically sold by brokerage firms and mutual fund companies.

Why invest: Unlike a CD, a money market fund is liquid, which means you typically can take out your funds at any time without being penalized.

Risk: Money market funds usually are pretty safe, says Ben Wacek, founder and financial planner of Guide Financial Planning in Minneapolis.

“The bank tells you what rate you’ll get, and its goal is that the value per share won’t be less than $1,” he says.

5. Treasury bills, notes, bonds and TIPS

The U.S. Treasury also issues Treasury bills, Treasury notes, Treasury bonds and Treasury inflation-protected securities, or TIPS:

• Treasury bills mature in one year or sooner.
• Treasury notes stretch out up to 10 years.
• Treasury bonds mature up to 30 years.
• TIPS are securities whose principal value goes up or down depending on the direction of inflation.

Why invest: All of these are highly liquid securities that can be bought and sold either directly or through mutual funds.

Risk:If you keep Treasurys until they mature, you generally won’t lose any money, unless you buy a negative-yielding bond. If you sell them sooner than maturity, you could lose some of your principal, since the value will fluctuate as interest rates rise and fall. Rising interest rates make the value of existing bonds fall, and vice versa.

6. Corporate bonds

Companies also issue bonds, which can come in relatively low-risk varieties (issued by large profitable companies) down to very risky ones. The lowest of the low are known as high-yield bonds or “junk bonds.”

“There safe high return investments uk high-yield corporate bonds that are low rate, low quality,” says Cheryl Krueger, founder of Growing Fortunes Safe high return investments uk Partners in Schaumburg, Illinois. “I consider those more risky because you have not just the interest rate risk, but the default risk as well.”

• Interest-rate risk: The market value of a bond can fluctuate as interest rates change. Bond values move up when rates fall and bond values move down when rates rise.
• Default risk: The company could fail to make good on its promise to make the interest and principal payments, potentially leaving you with nothing on the investment.

Why invest: To mitigate interest-rate risk, safe high return investments uk, investors can select bonds that mature in the next few years. Longer-term bonds are more sensitive to changes in interest rates. To lower default risk, investors can select high-quality bonds from reputable large companies, or buy funds that invest in a diversified portfolio of these bonds.

Risk: Bonds are generally thought to be lower risk than stocks, though neither asset class is risk-free.

“Bondholders are higher in the pecking order than stockholders, so if the company goes bankrupt, bondholders get their money back before stockholders,” Wacek says.

7. Dividend-paying stocks

Stocks aren’t as safe as cash, savings accounts or government debt, but they’re generally less risky than high-fliers like options or futures. Dividend stocks are considered safer than high-growth stocks, because they pay cash dividends, helping to limit their volatility but not eliminating it. So dividend stocks will fluctuate with the market but may not fall as far when the market is depressed.

Why invest: Stocks that pay dividends are generally perceived as less risky than those that don’t.

“I wouldn’t say a dividend-paying stock is a low-risk investment because there were dividend-paying stocks that lost 20 percent or 30 percent in 2008,” Wacek says. “But in general, it’s lower risk than a growth stock.”

That’s because dividend-paying companies tend to be more stable and mature, and they offer the dividend, as well as the possibility of stock-price appreciation.

“You’re not depending on only the value of that stock, which can fluctuate, but you’re getting paid a regular income from that stock, too,” Wacek says.

Risk: One risk for dividend stocks is if the company runs into tough times and declares a loss, forcing it to trim or eliminate its dividend entirely, safe high return investments uk, which will hurt the stock price.

8. Preferred stocks

Preferred stocks are more like lower-grade bonds than common stocks, safe high return investments uk. Still, their values may fluctuate substantially if the market falls or if interest rates rise.

Why invest:

Have the spare cash

Inflation is running at 3.1%, and finding a savings account paying above that safe high return investments uk impossible. But many experts claim you can reasonably expect investments to grow by about 4% a year after fees are taken into account, or more if the stock market has safe high return investments uk strong run.

If you invested £50 a month for 10 years and enjoyed a 3.9% return, you would end up with £7,348, according to investment firm Fidelity. That’s growth of £1,348 on your contributions. Carry on for 20 years and your profit rises to £6,193.

If you are in it for the very long term, and are lucky, your returns may be supercharged thanks to the power of compounding. Like a snowball rolling down a hill, your investment earns returns, and those gains are reinvested and start earning returns, too.

However, remember investing means taking some risk – it’s possible investments could safe high return investments uk in value, so this isn’t for everyone. First, you need some cash set aside for emergencies, so allocate some of your savings to that. It’s also vital to tackle any expensive debt, safe high return investments uk, such as credit or store cards, before diving into the stock market.

Assess your risk

Before choosing where to put your money, decide on your risk profile. In other words: how comfortable are you with seeing the value of your investments fall?

As a rule, the sooner you need your money, the less risk you should take. Online investment providers designed for self-starters, such as Nutmeg, Evestor, Wealthify, and sustainable investment provider Clim8, simplify this. Pick from a few investment options, rather than thousands of funds, after the providers have asked basic questions about your preferences and goals to match you to suitable options.

Start small

Investing a safe high return investments uk amount every month is a great way to get started. You could, say, kick off with £25 a month into a single fund, although some providers will accept contributions from as little as £1.

Regular investing will help to iron out the highs and lows of the market. You buy more shares when the stock market is performing poorly and the price is lower, and fewer when their value rises.

You can invest a lump sum, too, safe high return investments uk, if you have some cash savings you want to put to work in the stock market, for example, but this is a higher risk strategy as you might be buying at the top of the market.

Pick funds

Rather than buying shares in individual companies, funds are a good option for beginners. They hold a range of different companies, safe high return investments uk, so you don’t have all your eggs in one basket.

“When it comes to choosing funds, I think of personal investors in three broad camps: ‘choose for me’, ‘help me choose’ and ‘I’ll choose myself’,” says Tom Stevenson, investment director at Fidelity International.

Many investment websites offer best-buy fund lists put together by experts, including Hargreaves Lansdown’s Wealth Shortlist, and Interactive Investor’s Super 60.

There are two main fund types: index trackers and active funds. Trackers, also known as passive funds, follow a particular market index such as the FTSE 100. They typically return the average of the market they invest in, and, as free list of real bitcoin address is no one choosing the investments, they are the cheaper option.

Active funds are usually more expensive as they have a manager who chooses the shares they hold, aiming to beat the market.

You can pick from thousands of funds, such as those focusing on, for example, sustainable investments, smaller companies or emerging markets.

Holding a range of funds spreads your money and protects you from market falls. If one company falls in value, hopefully another will rise.

Go ready-made

If you don’t know where to start, you could go for a single, ready-made fund that holds investments from around the world.

Interactive Investor has a list of six quick-start funds. “These are well-diversified, multi-asset portfolios that are very competitively priced,” says Moira O’Neill, its head of personal finance. They include Vanguard’s LifeStrategy funds, each investing in thousands of global companies.

Alternatively, there are model portfolios on investment websites. These include a mix of some of the most popular funds and can be used as a template to build your own portfolio. AJ Bell Youinvest offers four ready-made options, tailored to whether you are cautious, balanced, adventurous or seeking income.

Check charges

Watch out for fees, as these can really eat into your returns. Investment providers either safe high return investments uk a percentage fee, based on how much you invest, or a fixed fee.

Comparetheplatform.com offers a simple calculator to help you find the most appropriate and cheapest provider. “A percentage charge is better for portfolios up to £50,000, and Vanguard is the cheapest but has a limited selection of investments,” says Bella Caridade-Ferreira, the chief executive of Comparetheplatform.

If you are investing a larger lump sum, you will be better off with Interactive Investor, which charges £9.99 a month, including one free trade a month, she adds. As your investment grows, charges stay the same with a flat fee.

You’ll pay for your investments on top of this fee, and to buy and sell funds. Average charges on active funds are about 0.75%, which, on top of a 0.25% service fee, brings the total to 1% a year.

Use your Isa allowance

Wrapping your investments in a stocks and shares Isa means you won’t pay tax on profits, or need to include them on your tax return.

This tax year you can invest up to £20,000 in an Isa wrapper. You can invest all, or some, of your allowance in a stocks and shares Isa, and hold any investments you wish.

Stay invested

Investing can be a bumpy ride, but it generally pays to hold your nerve. You need a time frame of at least five years, ideally far longer.

If you can sit tight through market falls your investments may bounce back and go on to be worth more.

“Great years can often follow terrible ones,” says Richard Hunter, head of markets at Interactive Investor. “In 1974 the UK was beset by recession, a miners’ strike, three-day weeks and an oil crisis – the FTSE All Share tanked 55%. The following year it rose by 140%.”

If you want further help before investing, seek assistance from a financial adviser, but you will need to pay. You can find one local to you online on Unbiased or VouchedFor.

If you’re looking for the best way to invest £100k, it’s important to consider the following questions to ensure you’re fully prepared when the time comes to make your investment. 

Should I see a financial advisor? 

Decisions about personal finances and investments can be overwhelming, especially if you aren’t an experienced investor. If you’re inexperienced or new to investing, or if you’ve suddenly come into money, it’s probably a good idea to see a financial advisor. 

A financial advisor will meet with you to determine what you want to achieve. Whether you’re looking to invest £50k, £100k or you have £10k to invest, a financial advisor can assess your situation and develop a comprehensive plan that aims to hit your financial goals. They can also typically invest your funds and set up accounts on your behalf, making the investment process less stressful for you. 

You should always ensure that your financial advisor is an authorised individual with approved designations, such as a certified financial planner (CFP), chartered financial analyst (CFA) or a chartered financial consultant (ChFC). 

How do I invest my money?

The method for how you invest £100k will depend on the investment vehicle you choose. When it comes to stocks and shares, you might want to should i buy bitcoin now august 2022 a stockbroker, fund manager or robo advisor to invest on your behalf (there’s more information about this in our guide to investing in the stock market).

If you would prefer to know your money is safe by depositing it into a competitive rate savings account, you can compare savings accounts online. 

Active vs. passive investing

The question of whether to invest actively or safe high return investments uk is hotly contested by investing experts. While passive investing is the approach favoured by experienced investors, there are certain benefits that come with active investing, too, especially if you’re new to investing. 

Active investing, safe high return investments uk, as the name suggests, requires you to take a hands-on approach or a more ‘active’ role. This role will often be undertaken by a portfolio manager, who will try to beat the stock market using analysis and expertise that only they can really offer. A portfolio manager will usually have a team of investment experts and analysts who consider both qualitative and quantitative factors when trying to predict what the stock market is about to do. 

Passive investing, safe high return investments uk, on the other hand, exercises more of a ‘buy and hold’ mentality and a more long-term approach to investing. The main difference between the two is that active investors are constantly trying to beat the market, whereas passive investors ride the stock market waves, keeping their eyes on rising stars and successful, established companies.  

What is my investment risk? 

While investing different word for money maker ultimately about growing your money, there is also the risk that it could shrink, which is something that many people, unsurprisingly, aren’t comfortable with. When it comes to investing an amount as large as £100k, it’s important to weigh up the risks carefully, and consider how much you’d be comfortable with potentially losing. 

To determine your attitude to risk, there are free online questionnaires available which will recommend what investment vehicles you might want to look into, based on how much risk you’re willing to take. However, these should not be considered to be financial advice.

Should I diversify my investment portfolio? 

If you’re looking for the best, safest way to invest £100k, you might want to start by splitting it into smaller amounts and investing these ‘pockets’ of cash in different assets, increasing your security and reducing your risk of losing it all. Think of it as not ‘putting all your eggs in one basket’ when it comes to investing. 

You can build an investment portfolio by choosing to invest in a range of different assets, and this is something a financial advisor should be able to help you with.