The national campaign
Take the next step: four questions, answered
The national Take The Next Step. Invest campaign asks four questions. Here they are, answered plainly for anyone holding money in cash, each with a guide that goes further.
Take The Next Step. Invest is a national campaign convened by the Investment Association, with support from HM Treasury, the Financial Conduct Authority and the Money and Pensions Service. Its message is that investing can be a natural next step from saving. Its mascot is Savvy the Squirrel, and its own site is takethenextstepinvest.co.uk.
This site supports the campaign. It is published independently by Unbiased Financial Group LLP and is not run by, or part of, the campaign or the Investment Association. The Financial Conduct Authority’s support for the campaign is not an endorsement of this site.
The four questions
Why should I invest?
Because money held in cash for many years loses spending power to inflation, even though the balance never falls. Investing gives money the chance to grow faster than prices, in exchange for the risk that its value falls, sometimes for years at a time. Whether that trade is worth making depends on when you will need the money back.
Should I be saving more or investing?
For most people it is both, in order. Clear expensive debt first, then keep three to six months of your outgoings in cash. After that, the date you need the rest decides it: money needed within about two years generally belongs in cash, and money you will not touch for longer is where investing is worth considering.
I want to invest, but there are so many options
The choice is not only a savings account or shares. Between the two sit bonds: loans to governments and companies that pay interest for a fixed period and repay you at the end. Historically they have moved less sharply than shares, though they can fall in value and a borrower can fail to pay.
I think I'm ready but don't know where to start
Most people start with a stocks and shares ISA, opened through an investment platform, which is where you choose and hold your investments. Charges and features differ, so compare a few before you choose. If the sum is large or your tax position is complicated, a regulated financial adviser can help.
Information, not advice. This page explains a public campaign and is information, not advice. The value of investments and any income from them can fall as well as rise, and you may get back less than you invest.