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Why Should You Consider Investing Your Savings?

Saving is one of the most important aspects of planning your financial future, and investing is a popular option with many people in the UK. There are many different types of investments, from purchasing buy to let property to stocks and shares ISAs, and it is important to know which suits your needs best. If you are looking for ways to plan for the future and create financial security, investing is a great idea. There are a number of benefits to investing your savings and we look at them in this article.

Investing your money can actually prevent you from losing money, due to inflation. Inflation is the increase in prices that occurs every year, at around 3%, and it means that if you had a ten pound note in 1990, you could buy far more for your money than you could now with the same ten pound note. Assets, like property or gold, will increase in value in line with inflation, but cash won’t unless you invest with a higher return than the rate of inflation. Interest rates on savings accounts are historically low, so your money will often perform a lot better for you if you invest it. 

Saving money means that you are putting aside funds to be used in the future, however investment goes further allowing your money to earn better returns over a longer period. Returns are linked closely to the risk of the investment, riskier investments tend to have higher returns, but there is always the option of making a loss, so many people opt for more secure investments like property or low risk investment funds. One downside of investing your savings is that it is harder to access should you need it at short notice, with many investment accounts having limitations. It may be worth having cash in an ISA or savings account as well as investing some of your money. However the fact that your cash is tied up can mean that you are less likely to spend it, which can be great for the future.

Another benefit of investing your savings is the potential to earn extra income. Certain types of investment are better than others for this. Buy to let property investment is a way that you can earn monthly rental income from your investment, which can pay for extra costs or allow you to reinvest. Over two and a half million people in the UK are buy to let landlords, with a rise of 27% over the past five years.

Buy to let property investments have continued to outperform other asset classes like shares, cash savings and bonds, which mean that more people than ever are benefitting from investing in property. With rents across the UK continuing to rise, and property investment specialists like RW Invest offering yields of up to 9%, buy to let property investment can be incredibly lucrative. Investments work best on as long a time scale as possible, so it is worth investing as soon as you can, property tends to go up in value massively, so the sooner you have a property the sooner it can start earning for you.