investing

chris_diddy1

I realise that current times as a saver, there is probably no sure way of safely making good returns on any investments, without being very clever, or taking huge risks.
But for a simpleton such as me, I wish to know if there is a simple way of saving, and the best saving scheme which is easy and risk free.
I have found myself for the first time, to have the opportunity to put some money away, which I do not necessarily at this time, need to get to.
I read about ISA's and savings accounts, but find myself really confused, and would like if possible, for someone, who is not trying to push some sponsored affiliation, to explain in layman's terms, the best thing to do with a bit of money put aside.
Any understandable information or advice would be appreciated.

eskbanker

This MSE article outlines a prioritised approach for optimising savings, in hopefully understandable terms:

https://www.moneysavingexpert.com/savings/which-saving-account/

You might get more specific advice on here if you clarify how much money you're talking about, when you're likely to need access to it, the rest of your financial circumstances (income, other assets, property, pensions, family, etc) and so on....

jimjames

chris_diddy1 said:

I realise that current times as a saver, there is probably no sure way of safely making good returns on any investments, without being very clever, or taking huge risks.

I'd add that you don't need to be clever or take huge risks to make good returns on investments. The secret is having a diversified portfolio and to give it the power of time.

chris_diddy1

You might get more specific advice on here if you clarify how much money you're talking about, when you're likely to need access to it, the rest of your financial circumstances (income, other assets, property, pensions, family, etc) and so on....

OK thanks, but that really is far too much personal information I am prepared to publish at this stage. I don't see the relevance to my income, pensions or assets, when all I am asking is the best way to save money.
But I would throw in a few figures
say for arguments sake; £10,000 to invest or save, over 10 years, for starter.
It would make sense to me to have 'a diversified portfolio' which I would take to mean, not put everything in one scheme.
I read that an ISA for instance is TAX free, but neither a savings account nor ISA seems to have any notable interest return.
I have a current ISA, and a couple of savings accounts, but neither seem to be performing at all well. 

kuratowski

Cash savings (ISA or not) have very low interest rates at the present time and probably won't beat inflation over the long term.  Which is why, for funds you don't have plans to spend for 10 years or more, investments are usually suggested instead of savings.
Why not have a read of this article, which is aimed at beginners:
https://monevator.com/investing-for-beginners-why-do-we-invest/

But, and this is a big but, investments do come with risk - they can rise and fall in value.  Over a 10 years timeframe the chances of outright losing some of your money is low, if invested sensibly, but it can happen.  And the amount of return you would get is inherently uncertain.
Here's another article:
https://monevator.com/investing-for-beginners-risk-versus-reward/

sevenhills

chris_diddy1 said:

I read that an ISA for instance is TAX free, but neither a savings account nor ISA seems to have any notable interest return.
I have a current ISA, and a couple of savings accounts, but neither seem to be performing at all well. 

Most savings are performing poorly, in savings your money will not keep up with inflation, unless you take more risks.

If you are wanting to take more risks with £10k, then whether you pay 20% or 40% income tax is very relevant, as is how many years you are away from retirement and whether you could claim 20% pension tax relief or settle for 5% on the stock market.

Diplodicus

If your employer offers a sharesave scheme, that's probably your best chance of making good a good return on your investment without being clever or taking any risks. The company shares will be offered to staff at a discount. You can put in up to £500 per month and at the end of 3 to 5 years any appreciation in the value of the shares is profit. If the shares fall below the discounted price, you can cash out.

Brie

Does you employer have any investment schemes?  Sharepurchase or Sharesave??  That's where I'm putting my money currently if only to keep me from spending it.

grumiofoundation

chris_diddy1 said:

You might get more specific advice on here if you clarify how much money you're talking about, when you're likely to need access to it, the rest of your financial circumstances (income, other assets, property, pensions, family, etc) and so on....

OK thanks, but that really is far too much personal information I am prepared to publish at this stage. I don't see the relevance to my income, pensions or assets, when all I am asking is the best way to save money.
But I would throw in a few figures
say for arguments sake; £10,000 to invest or save, over 10 years, for starter.
It would make sense to me to have 'a diversified portfolio' which I would take to mean, not put everything in one scheme.
I read that an ISA for instance is TAX free, but neither a savings account nor ISA seems to have any notable interest return.
I have a current ISA, and a couple of savings accounts, but neither seem to be performing at all well. 

If you are simply asking for savings advice then there is little advice anyone can give other than direct you to a link of what savings accounts (as done above). If this is the case you can ignore all the below! 

if you are asking for help with investing (as per your title) it will be difficult for anyone to suggest anything more than vague comments if they don’t understand in more detail your situation. 

By investing I mean stocks and shares.   

The main thing is the aims you have for the money as this will help determine the appropriate product.

For example if you are saving to buy a first home a lifetime ISA would be a good place to start. Depending on timescale would mean either cash or stocks and shares lifetime ISA. 

Cash products (whether ISA or not) don’t ‘perform’ as such they pay the return that they advertise and the capital is not at risk. 

Over a longer time period you would expect stocks and shares (whether in ISA/LISA/pension) to outperform cash. Although your capital is at risk, you can get back less than you pay in. The longer time period the less risk of this - as this gives you longer to recover from any crashes. 

Stocks and shares are not suitable for money you will/may need to access in the short term (e.g. house deposit for upcoming purchase, emergency fund) what if it drops 50% the day before you need to access it!

If you are saving for retirement pension/LISA will be more suitable. If money needs to be accessed before retirement then stocks and shares ISA. 

Re diversification with stocks and shares it doesn’t necessarily mean different platforms it means spreading your investments. You can invest in trackers/multi assets funds that spread your assets across various companies and different assets. As opposed to investing all your money in a coupe of companies. 

https://monevator.com/passive-fund-of-funds-the-rivals/

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/investing-success/why-it-is-so-important-to-diversify

MX5huggy

The trouble is the best thing to do with £10000 for 10 years really does depend on your personal circumstances. 

An ISA is a tax wrapper you can hold lots of different things in a ISA Cash, Stocks and Shares (individual (like say Tesco’s, bad idea) or funds of selections of shares) or Bonds. 

If it was me I would over the next 18months put at extra £150 per month in to my Salary Sacrifice AVC’s pension pot so that would use up £2700 but my pension would be enhanced by £4000 ish can’t do more than that because I would hit minimum wage limit. The remaining £7300 I would put in a SIPP pension today. But this is locking the money away for a minimum of 15 years in both cases (until I’m 55 or 58). 

Within the Pensions it would be invested in a Global All World index tracker which is “risky” but over 15 plus years fairly certain to out perform keeping the money in cash where it would be eaten up by inflation.

We can guess it’s not the case but if you have already retired, paid in £40k this year or your pension is worth £1m ish then above is of no use to you. 

If you want a simple easy answer the £10k into Premium Bonds is a good place ATM but you need to keep checking on available rates elsewhere for the period you hold them, and your £10k is eaten by inflation. 

Maybe this will help you form a plan https://youtu.be/oCBQekcu8jw

Albermarle

I read that an ISA for instance is TAX free, but neither a savings account nor ISA seems to have any notable interest return.
I have a current ISA, and a couple of savings accounts, but neither seem to be performing at all well. 

Just in case you are still confused , there are different types of ISA . The ISA bit means that any return you gain is not taxable . In fact you can invest outside an ISA and not pay tax up to certain limits . The different types are 

Cash ISA - means a safe savings account with a bank or building society . For most people the ISA bit is unnecessary and they just need a normal savings account .

Stocks & Shares ISA - Here you can invest in stocks and shares ,  or more usually in diversified investment funds . Long term ( > 10 years )  you would expect a better return than with a savings account, but there is some (controlled )risk involved and there will be times when the value will go up and down .

Stocks & shares ISAs: find the best platform - MSE (moneysavingexpert.com)

There are also Lifetime ISA's and IFISA's