Why Save?

Many people save for a specific purpose, whether it's for a large purchase, education, a property, or retirement. Savings provide financial security and ensure that funds are available for unexpected costs or future plans.

Unlike investing, saving offers low risk, but also limited growth—the primary return being the interest earned on deposits. It is an ideal approach for those who prefer stability over risk.

There are various types of savings options, from easy-access accounts to fixed-term deposits, each catering to different financial needs.

Saving vs. Investing: What’s the Difference?

Saving is the foundation of financial security, while investing is about growing wealth. You can be a saver without being an investor, but you cannot invest without saving first.

Savings & Investments

So why take the risk? Because investing allows money to work harder, outpacing inflation and helping to achieve long-term financial goals that savings alone might not be sufficient for.

What Investment Options Are Available?

  • Exchange-Traded Funds (ETFs) Low-cost, market-traded funds that track stock or bond indices, offering liquidity and diversification.

  • Offshore Collectives - International investment funds with potential tax advantages but fewer UK regulatory protections.

  • Collective Investments - Pooled funds managed by professionals, providing access to diversified assets with reduced individual risk.

  • Investment Trusts - Publicly listed investment companies with a fixed capital pool, offering potential for long-term growth and income.

  • Unit Trusts - Open-ended investment funds where units are bought and sold based on the fund’s underlying asset value.

  • Equities (Stocks & Shares) - Investing in company shares for potential capital appreciation and dividend income, with market risk.

  • Investment Platforms - Online services that provide access to multiple investments in one place, offering transparency and efficiency.

  • Every investment carries different levels of risk and return, so diversification is key.

Capital Investment Bonds

Capital investment bonds are life insurance-based investment contracts designed for capital growth and/or income over the medium to long term, typically five years or more. Early withdrawals may incur penalties. These bonds, available onshore (UK) or offshore (e.g., Isle of Man, Channel Islands), offer tax advantages depending on your residency. They usually have no upper investment limit but require a minimum contribution, often around £10,000. Bonds can allow for income withdrawals or additional contributions, though fees vary, including annual management and early encashment charges.

Exchange-Traded Funds (ETFs)

ETFs are investment funds traded on stock exchanges, holding assets like stocks, bonds, or commodities. Most track an index and offer low costs, tax efficiency, and liquidity. While designed to trade close to their net asset value, price deviations can occur. ETFs carry market risk, meaning the value of investments and income from them may fall, and you may not get back your original investment.

Offshore Collectives

Offshore collective funds include unit trusts, mutual funds, and investment companies based in jurisdictions with low or no tax on income or gains. While beneficial during investment, repatriated funds may be taxed in the UK. Offshore investments lack UK regulatory protections, so investors must assess the fund’s governance and risk exposure. FCA-Recognised Funds, while managed overseas, meet UK investor standards but do not offer Financial Services Compensation Scheme protection.

Collective Investments

A collective investment pools money from multiple investors, enabling access to a diverse portfolio of stocks, bonds, and other assets. Professional fund managers oversee investments, reducing individual risk. These funds can include fixed-interest securities like UK gilts or corporate bonds, though price fluctuations and issuer default risks apply. Not all assets are liquid, and fund managers may delay withdrawals during market downturns.

Investment Trusts

Investment trusts operate similarly to unit trusts but are publicly listed companies with shares traded on the London Stock Exchange. They have a fixed pool of capital, meaning share prices fluctuate based on demand. Investment trusts can use gearing (borrowing to invest), increasing potential gains but also market volatility. Some may hold unlisted investments, which are harder to sell and subject to greater price fluctuations.

Unit Trusts

Unit trusts are collective investment schemes where investors pool funds to benefit from capital growth, income, or both. Investors buy "units" that reflect the fund’s value. These open-ended investments create units when new money is invested and liquidate them when investors withdraw. Charges are included in the buy/sell price, and fund size can fluctuate based on investor activity and market performance.

Equities (Stocks & Shares)

Equities involve buying company shares listed on stock exchanges. Investors benefit from potential capital growth and dividends, but share values can fluctuate. Historically, equities outperform cash and bonds over the long term, but capital is at risk, and returns are not guaranteed.

Investment Platforms

Investment platforms are online services that consolidate investment management, offering access to multiple asset classes at competitive fees. Investors benefit from 24/7 portfolio access, transparent pricing, and streamlined trading. Platforms provide a centralised view of investments, enabling better financial decision-making. Assets are typically held via a nominee company for security, and client funds are kept in segregated accounts.

THE VALUE OF INVESTMENTS AND THE INCOME THEY GENERATE CAN FALL AS WELL AS RISE OVER TIME. IT IS IMPORTANT TO NOTE THAT YOU MAY GET BACK LESS THAN YOU ORIGINALLY INVESTED. TAX TREATMENT CAN VARY ACCORDING TO INDIVIDUAL CIRCUMSTANCES AND IS SUBJECT TO CHANGE WITHOUT NOTICE.