We are seeing the first indications that interest rates are rising after years of historically low rates. We may get another rate rise later this year, but it is unlikely that rates will be anything over 1% for quite a while longer. The problem is that inflation is approaching 3% so money held in bank and building society accounts for a long time could very well be losing money in real terms.
Our clients often tell us that they want to see their money grow by more than the rate of inflation but still want their money invested in a relatively cautious way, so you could look at investment funds. Here is a quick example. We looked at 146 funds in one of the most popular kinds of balanced investments*, of these 113 have been running for over five years. All of these funds made money for their investors. The best performing grew by 59.3% over five years and the worst fund grew by 10.3%.
The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.
We’ve got more information on Investment Funds and alternative ways to save on our Savings & Investments page. Or talk to your Financial Adviser who provides financial advice in Sutton Coldfield and across the whole Midlands area.
*Source: Trustnet 6.6.18 – IA Mixed Investment 20-60% Shares sector