Why invest?

Most people start off by saving in bank and building society accounts because of the financial security they can offer and because we should all have easily accessible cash in case of one of life’s little emergencies.

Whilst cash savings are a good starting point and provide an essential safety net, the low interest rates offered on many cash savings accounts may mean that they are less appropriate when saving for longer-term goals. Money held in cash savings accounts may fail to keep pace with inflation meaning the buying power of your money may reduce over the longer-term. This is where investing may help. Investing offers the potential for your money to work harder for you and to provide the opportunity (although not the guarantee) of achieving better returns than cash over the long-term. You don’t need large amounts of money to start investing – start with as little as £25, but you should usually plan to invest for at least five years.

Below, we look at the importance of defining your goals and how likely you are to achieve them, and in the next few sections, we give you what you need to know before you start investing. If you need any help, our customer service team are here to guide you along the way.

What is your goal?

It is important to think about your goals – what you would like your investments do for you? For example, do you want to invest for a new car, save for your child’s future or to plan for your retirement? Once you know what your goals are, why not take a look at our goal planning tool below.

You can use this tool to get an idea of how your investments could grow over time or of the likelihood of achieving a financial goal. Enter the amount you would like to invest as a lump sum and/or planned regular investments, together with the amount you are looking to achieve (if investing for a target), your time horizon and an assumed risk level.