INVESTMENTS AND SAVINGS

If you are investing for the medium or long term, the option you choose will be influenced by your attitude to risk and investment needs.

There are so many ways that you can save or invest, investors want their money to grow, So it’s really important to think about the level of risk you might be willing to take with your money. You should be looking to achieve a good balance.

BASIC SAVINGS:

Think about saving a manageable amount each month after covering your living costs and your overall realistic needs

A bank or building society account may be a good home for your money, but its unlikely to gain much interest. You could open up an easy access Cash ISA (Individual Savings Account).

CASH ISAS:

A Cash ISA is a savings account that allows you to make regular contributions. Unlike a standard savings account, you won’t pay any tax on the interest earned within your Cash ISA.
The other main difference between a Cash ISA and a standard savings account is that there is a maximum amount you can pay each tax year into a Cash ISA. This is £20,000 for the 2019/20 tax year.

Stocks and Shares ISAs

A Stocks and Shares ISA differs from its Cash equivalent by allowing you to invest in:

  • Shares in companies.
  • Unit trusts and Open-ended Investment Company.
  • Corporate bonds.
  • Government bonds.
A fund is when investors pool their money together to buy a various range of assets such as bonds, shares and property. If you have a Stocks and Shares ISA, you can usually select different funds to invest in, plus move your money between these without taking it out of your ISA and losing the tax advantages.

Investment can go down as well as up and you may not get back the amount you put in.

Other investments

  • Corporate and government bonds – these are loans to the government or private companies that pay you interest.
  • Investment bonds – these are products which invest your money with the aim of providing you with medium-to long-term returns.
  • Open-ended investment companies (OEICs) – here your money is held in a pooled fund that is then invested in other funds and assets.
  • Property – you could invest in rental properties, commercial properties or holiday homes.
  • Shares – these are a direct investment in individual companies, where you take a stake and if it does well, you may get a dividend – a share in the profits.
    Different types of assets can have different risks that need to be taken into consideration when choosing an investment.