A new government-backed, industry-led campaign has launched to encourage more of the UK's savers to invest their money rather than leave it sitting in cash savings accounts. The campaign is designed to explain how investing can generate better returns than cash savings and help boost the wider economy.
Many UK savers still favour cash savings accounts because they feel safer, but the value of that money can be eroded over time if the interest earned fails to keep pace with rising prices, a process known as inflation. Many cash accounts currently offer rates too low to beat inflation.
Why Cash Savings Can Lose Value
Investors generally have a better chance of beating inflation than savers, provided they are willing to keep their money invested for at least five years. Taking a longer-term approach helps investments weather the market's ups and downs, since periods of poor performance are often smoothed out by periods of growth.
The rise of low-cost apps and platforms has made it easier and cheaper for beginners to start investing with relatively small sums of money.
Choosing the Right Investment Account
Beginners first need to choose an account to hold their investments. The most common starting point is a stocks and shares Isa, since there is no tax to pay on investment growth or profits held within one. Savers can put up to £20,000 into Isas in a single tax year.
Money invested beyond the Isa allowance must go into a general investment account, where profits are subject to capital gains tax and dividend tax. Those saving for retirement can instead consider a self-invested personal pension, or Sipp, which is tax-efficient and gives savers more control over their investments than other pension types. Employees are advised to maximise their employer's pension contributions first.
What Beginners Can Invest In
Stocks and shares give investors ownership of a company and a share of its profits. They are volatile in the short term but offer greater potential for long-term growth than other asset classes.
Bonds and gilts involve lending money to a company or government in exchange for interest payments, with the original amount returned at the end of a set period. Gilts are UK government bonds. Both are considered safer than shares, though not risk-free.
Commodities involve buying a stake in raw materials such as gold, silver, oil or natural gas, with returns driven by supply and demand.
Lump Sum or Regular Savings Plan
Before investing, savers are advised to keep three to six months' worth of easily accessible cash for emergencies. Beyond that, they can choose to invest a lump sum in one go, or start small with a regular savings plan, such as putting away £100 on the same day each month.
First-time investors may feel more comfortable committing to a regular plan, since a lump sum invested just before a market fall could take time to recover. A lump sum, however, gives money more time in the market to grow.
Investing with the aim of making quick profits amounts to short-term trading rather than investing, which is considered very risky and requires in-depth research, knowledge and experience.
Three Ways to Access the Markets
Beginners can choose from three broad approaches. The first is picking individual stocks and shares themselves, researching companies' performance and future potential.
The second is investing in a fund, where money is pooled with other investors and a fund manager chooses the underlying stocks and shares. This is generally more hands-off but tends to cost more than picking investments directly.
The third is a managed option, where an investor tells the provider their goals and risk appetite and the provider chooses and manages the investments, at a higher cost again.
DIY Investing Platforms Compared
A comparison of do-it-yourself platforms, based on published fees checked in August 2026, found a wide range of charging structures. Among those compared were:
- AJ Bell: 0.25% admin charge, capped at £3.50 a month for Isa shares, trusts and ETFs, with £1.50 fund dealing and £5 share dealing.
- AJ Bell Dodl: 0.15% admin charge with a £1 monthly minimum, and free fund and share dealing.
- Bestinvest: 0.40% admin charge, cut to 0.2% for ready-made portfolios, with free fund dealing and £4.95 share dealing.
- Charles Stanley Direct: 0.30% admin charge, with a minimum platform fee of £60 and a maximum of £600, £4 fund dealing and £10 share dealing.
- Etoro: free admin charge, offering stocks, investment trusts and ETFs with an Isa but no Sipp, and free share dealing.
- Fidelity: 0.35% on funds, or £7.50 a month if the pot is below £25,000, with free fund dealing and £7.50 share dealing.
- Freetrade: no account fees, with free fund and share dealing.
- Hargreaves Lansdown: 0.35% admin charge capped at £150 a year for shares, trusts and ETFs, with £1.95 fund dealing and £6.95 share dealing.
- Interactive Investor: £5.99 a month up to £100,000 on its Core plan, or £14.99 above that on its Plus plan, with fund dealing from £1.49 to £3.99 and share dealing from £3.99.
- InvestEngine: free, offering ETFs only, with a managed service charged at 0.25%.
- Scottish Widows, formerly Iweb: free admin charge, with £5 fund and share dealing.
- Prosper: free, refunding fees on around 30 index funds, with no share dealing.
- Trading 212: free, offering stocks, investment trusts and ETFs, with no share dealing.
- Vanguard: £4 a month under £32,000 rising to 0.15% above that, capped at £375 a year, but restricted to Vanguard's own products.
Fund Supermarkets and Managed Options
Platforms such as Hargreaves Lansdown and Interactive Investor are traditionally known as "fund supermarkets" because they give easy access to funds actively managed by firms including Artemis, Fidelity, Invesco and Vanguard, as well as individual stocks, shares and ETFs.
For those who want their investments managed for them, so-called robo-advisers include Moneyfarm, which charges a 0.70% account fee with underlying investment costs of between 0.21% and 0.24%; JP Morgan Personal Investing, formerly known as Nutmeg, which charges 0.75% with underlying costs of between 0.22% and 0.42%; and Wealthify, which charges 0.6% with underlying costs ranging from 0.14% on its original plan to 0.46% on its ethical plan.
Passive, index-tracking investing has grown in popularity partly because active management struggles to beat it. Only 14.2% of active fund managers outperformed passive strategies over the past decade, according to investment research provider Morningstar.
Diversification and Fees to Watch
Diversification means not putting all of an investor's money into one company, sector or region. Traditional guidance suggests investors can achieve diversification by holding between 20 and 30 individual stocks, though funds, investment trusts and ETFs are often already diversified by pooling money across many holdings.
Account fees for DIY platforms generally range from 0.15% to 0.45%, rising to as much as 0.75% for managed options. Dealing fees range from free to as much as £9.99 a trade, and fund investors also pay an ongoing charges figure to cover the cost of running the fund, which can erode returns over the long term if it is high.
