Britons urged to ‘take the plunge’ to secure higher returns – ‘see your money grow!’

Barclays expert on possible long term growth from investing

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On BBC Moneybox, Becky O’Connor, head of pensions and savings at Interactive Investor spoke to Paul Lewis about the benefits of investing and what people can do to take their first steps. She explained the importance of “having some cash” readily available just for emergencies before looking to invest.

She said: “First of all you need to think about what you can afford.

“Budget first because there’s no point investing if it will take you straight into your overdraft.

“There is still reason to have an emergency pot set aside for anything you might need in the immediate term so there is a reason to keep some money in savings even though it is being eroded by inflation at the current interest rate level.”

Inflation rose to 5.1 percent for the year to December 2021, a decade-high figure and with interest rates at low of 0.25 percent, the value of one’s money is decreasing.

Inexperienced investors should look to stocks and shares ISAs first if they are not sure how to start investing, Ms O’Connor explained.

She continued: “They are tax free up to £20,000 a year.

“If you have never done it before and you’re not feeling very confident there are financial advisors that can help guide you or DIY platforms.

“So, you want to do your own research but start off small if you’re looking at regular investing.

“Set up a direct debit so you don’t have to think about it.

“It’s very daunting when it comes to investing for the first time as there are thousands of funds and trusts so looking at ready-made portfolios and quick start funds and things like that and keeping charges low is also really important.”

She explained that investing in stocks and shares can be an attractive place to start due to higher returns people may potentially secure.

If people invest in funds tracking the FTSE 100, the average level of returns one could receive is seven to eight percent, so it is a potential way to beat inflation.

However, with investing, capital is at risk.

With investing becoming such a popular topic, Ms O’Connor warned listeners about getting advice on TikTok and other social media platforms.

She added: “It’s never a good idea when you’re starting out. There may be some good ones but generally speaking the independent, official guidance from the money helper website, which is government funded, is actually great.

“They’ve got independent guides to investing there.

“You do need to be patient and take your time to do your own research even if you do have an advisor.

“Be patient but don’t do nothing.”

Kirsty Stone, financial planner at The Private Office gave her advice about the year ahead and suggested what Britons can do.

She said: “There’s always a reason to not invest as there’s always noise out there.

“But we are hoping markets will continue to grow so you just have to take the plunge at some point” to see one’s money grow

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