Instead of buying individual shares, bonds or other assets directly, you can choose to invest in a fund. A fund pools money from you and other investors, and a specialist fund manager invests this money in assets such as shares, bonds, properties or commodities. Most people, including those who are experienced investors, use funds when investing. Funds save you the trouble of buying shares in multiple companies and building a diversified portfolio of bonds and other assets. They are also safer and cheaper since you share the risks and costs with other investors.
When it comes to investing, there are no guarantees. Past performance is not a reliable indicator of future results. Your investments can go down as well as up in value, so you could get back less than you put in. It is generally recommended that you hang on to your investments for at least five years, to give your investments the best chance of providing the returns you’re hoping for. Even if you wait five years, you might still get back less than you put in. It would help if you were comfortable with this before you begin.
Yes. You enjoy tax benefits when you hold your investments in an ISA or pension. This tax year (2020 - 21), you can invest up to £20,000 in a Stocks & Shares ISA tax-free. If you choose to invest in a general investment account (non-ISA), you are allowed to make £12,300 of gains tax-free. Additionally, the first £2,000 you receive in dividend is tax-free. Read our Stocks and Shares ISA Guide for more information.
We've put together a list of some of the top investment providers. These are providers who score high on affordability or service quality or both. We've also split the providers into three categories based on the level of help they'll offer you. These categories are "Do It For Me (DIFM)," "Do It With Me (DIWM)," and "Do It Yourself (DIY)." For all providers listed in each category, your money is protected by the Financial Services Compensation Scheme (FSCS). This means you could get your money back up to £85,000 if any of the companies goes bust. Use the tabs below to learn about each category. Alternatively, view our full price comparison tables here.
Also called ready-made investment platforms, Do It For Me platforms are ideal for either beginners or those who want all the hard work done for them. With DIFM platforms, you’ll often be presented with a limited set of investment choices based on your attitude to risk, investment goals and how much you plan to invest. Depending on the platform you choose, you may have access to formal financial advice. We’ve only listed 3 DIFM providers here, but there are many of them out there. Note, DIFM providers are mostly robo-advisers. Compare Nutmeg, Wealthify and OpenMoney below:
This is ideal for people who are happy making their own investment decisions but require a bit of help getting there. The DIWM platforms do not give you advice but offer some guidance that could help you understand your attitude to risk, and then provide ready-made investments that match your risk level. We’ve only listed 3 DIWM providers here, but there are quite a number of them out there. Compare Cavendish, AJ Bell and Vanguard below:
This is ideal for people who know what they are doing. With DIY platforms, you'll have access to a wide range of investments, and in some cases investment ideas or suggested fund lists. But you have to choose your investments and build your portfolio yourself. This requires a bit of research on your part, so it is important you know what you are doing. You should have clear goals, know your risk appetite and understand how to build a portfolio. We’ve only listed 3 DIY providers here, but there are quite a number of them out there. Compare iWeb, Interactive Investor and Vanguard below:
View full price comparison tables here.
We are not regulated to give you financial advice, so we kindly ask that you not take the information on our website, online community or social media pages as advice. If you think you will need someone qualified to help you make financial decisions such as what to invest in, we strongly recommend you seek advice from a suitably qualified financial adviser. There are many financial advisers in the Koody Community. Feel free to have a chat with them and request their services.
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