Investing can be a good way to give your money a real chance to grow over the long term. If you put your money in a savings account, you’ll only earn the amount added by interest. With investing, you can put your money in a variety of assets, each with the potential to increase in value at a level higher than the current interest rate.
Remember the old saying “speculate to accumulate”? That’s very true of investing. You may need to take chances with your money to be in with a chance of getting a real return above the rate of inflation. You should be aware though, that investing does carry risks and you could lose some or all of your money.
But investments carry different levels of risk, so you can pitch your investment at a level that you’re comfortable with. Generally, the more you want to get back, the higher the risk to your original investment.
The key to investing is to make sure you spread the risk to your money by investing in a number of different assets. The chances are that if one asset isn’t performing all that well, another may be doing better than expected, which could offset the poor performance. If you’re not comfortable taking risks with your money, you might want to consider saving instead.
Unlike investing, with most savings accounts your money is generally safe, accessible and any interest added cannot be taken away.
Remember, investment values can go down as well as up and you might get back less than you paid in.
There are a number of different types of investments out there. Here’s a rundown of what’s generally available to you:
|Type of investment||What is it?||How do I invest?|
|Stocks and shares ISA||This is a tax efficient investment plan where the money you invest goes into assets like shares and collective investment funds. You can buy these through a bank, an online provider or through a financial adviser. You can currently invest up to £11,280 in a stocks and shares ISA during the tax year. You can invest for growth, income or both.||A bank, building society, National Savings and Investments at the Post Office, some supermarkets and retailers, friendly societies, insurance companies, unit and investment trust, companies, financial advisers, fund supermarkets and stockbrokers.|
|Investment bond||This is a lump sum investment where the money you invest goes into a fund or range of funds. It gives you the chance to invest for growth, income or both.||Through a financial adviser or an online provider.|
|Collective investment||This could be a Unit Trust or ICVC (Investment Company with Variable Capital). Funds within an ICVC or a Unit Trust Fund pool the money of a large number of investors who choose to invest in the same fund. You can invest for growth, income or both.||A bank, building society, some supermarkets and retailers, friendly societies, insurance companies, unit and investment trust companies, financial advisers, fund supermarkets and stockbrokers|
|Endowment||This is a combination of an investment and a life insurance policy. It pays out the final value of the investment when the policy matures. It will pay out a fixed amount if the person covered by the policy dies before it matures.||Through a financial adviser.|
|Personal pension||This helps you invest money for your retirement. You normally can’t access the money in your pension until you retire.||Through your employer or a financial adviser.|
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Aviva Investors Global Services is a global asset management business dedicated to building and providing focused investment solutions for clients which include local government organisations, pension funds, wholesale and retail banks, insurance companies, charities and private wealth managers. With assets under management in excess of £274 billion (as at 30 September 2012) across a range of real estate, equity, fixed income, money market, mixed and alternative funds, our clients benefit not only from our access to, and experience of, local markets but also from the availability of considerable global resources.
In relation to Collective Investment Funds and the Stocks and Shares ISA we/our/us refers to Aviva Investors, the business name of Aviva Investors UK Fund Services Limited, the Authorised Fund Manager, Aviva Investors UK Funds Limited, the ISA Manager and Aviva Investors Global Services Limited, the Investment Manager for most of the Collective Investment Funds. The Authorised Fund Manager is the Authorised Corporate Director or Unit Trust Manager which means they are the provider of the funds and take full responsibility for them. The Investment Manager manages the funds on a daily basis making and implementing all portfolio decisions.
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