New to investing?

The simple answer is inflation. It is usually vital that savings keep pace with inflation, otherwise on paper your capital might be growing but its purchasing power is diminishing. If your savings can grow at a higher rate than inflation, you will require less savings in the first instance, or they will last longer during retirement.

If you require capital in three to five years, cash is a suitable option, as it is low risk, relatively secure and provides liquidity. However, the low returns won’t combat inflation. Below are the three main asset class alternatives for medium- or long-term investment, normally between 5-10 years.

There are risks associated with investing but owning tax efficient investment products in a combination of cash, equities, fixed interest, and property diversifies your portfolio and is often the most effective way to invest. For personalised financial advice contact your local independent financial adviser.

A way to purchase a small piece of a company and share in the company profits. Companies usually reinvest some profits for future growth and pay shareholders a dividend. Our advisers add value by selecting investments from the entire market including active and passive fund solutions and sustainable investment options.

Government Gilts and high-quality Investment Grade Corporate Bonds are a way for the Government (Gilts) and Corporations (bonds) to borrow. They are issued for a fixed term and offer a fixed level of interest (coupon), usually at a higher rate than cash. They won’t beat inflation but can earn more interest than cash whilst taking a low level of risk.

Residential and commercial property can appreciate over time. It can also generate an income (buy-to let residential or as a commercial landlord). Therefore, it can be effective as an asset to beat inflation but can also go through periods of decline, and at these times it can be relatively illiquid.