We've got monthly savings accounts with M&S Bank, which pay 4.5% net. The downside is that you can only save a maximum of £250 per month into them and can only have one such account each.
When I was training for the financial services industry, we were told that a sizeable portion of the client's money should be put into Premium Bonds. My feeling is that this MAY work if you hold the maximum number permitted but at the end of the day, each bond is only worth £1, which on encashment is worth less than the £1 it cost to buy - so an overall loss. I was given four as a small child and have never won anything. Because of inflation, and the cost of postage, it's not worth encashing them. It's not a product I would recommend.
Buy to Let properties rely on always having a tenant, and one who won't trash the place. Having a letting agent should reduce the risk of this, but then you'd have their fees to deduct from the rental income. As owner, you'd be responsible for the upkeep of the place and, if there's no tenant, there's no income. Can be risky...
Equities go in 5 or 10 year cycles, as a rule of thumb. If you save monthly, you benefit from "pound cost averaging" as, when the price of each unit goes down, you buy more units, which mean you have more units to benefit from the increase in value when the price goes up. Conversely, when the price goes up, you buy fewer units. It is preferable to buy into a unit trust, rather than shares in individual companies unless there is a material or sentimental reason for buying them (Carnival - free OBC
). For those who don't know what a unit trust is, it's a collection of shares managed by a professional who buys shares in individual companies in a particular sector. So, for a very simplified example, if he manages a fund investing in, say, British supermarkets, he'll look at the performances of all the supermarkets and buy shares in the strongest performing. If Aldi looks like it's going down the pan, he'll sell and reinvest in, say, Morrisons. You, the investor, probably won't know any of this, you just know that you are investing some of your money in UK supermarkets. If you were doing it yourself, you'd have to be constantly checking share prices and buying and selling yourself, which is time consuming and expensive, as the fund manager can command big discounts in dealing charges that we couldn't get. Some trust funds are deemed "low risk", others are "high risk". "High risk" means that the prices are very volatile but the rewards can be very high. When I started in the industry, one of my boss's clients had invested in Technology and her investment had increased in value by 600% over a short period of time. Then the "technology bubble" burst and she ended up with a fund valued at about 40% of the initial investment - a big loss.
There is no such thing as a "no risk" investment - ALL investment vehicles - stocks and shares, building society accounts, ISAs, whatever, carry a degree of risk.
Precious metals are always good but, again, can be risky. I bought into a fund dealing only in "physical gold" (this is different to general gold funds - it means that somewhere there is a block of gold with my name on it) - it made a modest gain in the first few months, then sank back to an overall loss of about 10%. Because of the uncertainly caused by Brexit, it's back up to +15% of my original investment. Palladium has gone up nearly 50% in the year since investing. Physical silver has gone down BIG time - about 40% but this is expected, in the next couple of years, to rocket in value.
You should not invest in anything expecting a quick return. Always look at long term - ie 5 years or more, preferably 10. Younger investors should have a small proportion of their investment portfolio in higher risk funds, a chunk in low risk and the bulk in medium risk. As they get older, exposure to higher risk should be gradually reduced into medium risk and, in the 5-10 years before retirement, start moving that into lower risk funds, perhaps even going into a cash fund towards the end. Unless you know what you are doing, always take professional advice regarding which fund(s) are the best for your particular circumstances (and don't come to me, I'm no longer qualified and was never authorised to advise)
The interest wasn't that great to start with, now it's cr*p. It makes you think, what is the point of saving these days, all the banks are doing are acting as a mattress for your cash. It certainly doesn't give the younger generation any incentive to save for their future.
