About to get started?

If you’re feeling ready to get started with investing you’ll hopefully have a good sense of how it works and whether it’s right for you. But in case it helps, here’s a quick recap of some key points.

What is investing?

Investing is about buying something with the aim of benefiting from its future potential. Savings are accessible and don’t expose you to investment markets. But the risk is that low interest rates mean growth falls short of rising prices (inflation). While there is a risk when investing that you might get back less than you put in, there is more potential to make a profit on your money over time.

Am I ready to invest?

Getting your current finances in decent shape before investing is generally a good idea. Things to consider include: 

  • Paying off any sizeable debts
  • Building up some savings for emergencies 
  • Having some money available for investing (a lump sum or a regular amount)
  • Not needing access to that money too soon (five years or more is usually recommended for investing)

Even if you don’t have all the boxes ticked just yet, it might still be possible to start investing regularly. You can always increase or reduce the amount over time depending how your circumstances change.

What’s my goal?

You might just see investing as an opportunity to make your money work harder for you, and that’s absolutely fine. But it can help to be clear about what you’re investing towards. Three typical approaches are getting started with shorter term targets as part of a general goal to get your finances in better shape; aiming for a specific goal (like going on the trip of a lifetime) within a clear timescale; and organising your whole financial life around meeting an ambitious stretch goal (like paying off your mortgage early or having a new dream home to enjoy in later life).

How do I choose?

There are plenty of options. A good place to start is by getting an idea of how much risk you’re comfortable taking, then thinking about what to invest in with that in mind. It is possible to choose all your own investments directly but this can be complicated. Another option is to put your money in a fund (or range of funds) where - in exchange for a fee - an expert (the fund manager) makes the decisions about where to invest it. The best option for you may depend on how much investment experience you have and how confident you are in making decisions. There is lots of information available, as well as digital advice options, or you can speak to a professional financial adviser.

What about tax?

You may need to think about tax when investing. But you could benefit from tax savings, mainly through pensions (either personal or workplace) and Individual Savings Accounts. Your tax treatment is personal to you. It can be a good idea to look at the information available on the gov.uk website and speak to a professional adviser if you’re unsure.

There’s still much more to explore so if you feel ready to move on from here, you can find more articles and guides in the Ready to invest section.