Saving in cash is all well and good, but it doesn't exactly give you the best returns. After all, even today's best savings rates are meagre compared to days gone by – despite both fixed rates and easy access deals showing signs of improvement recently, none whatsoever manage to beat inflation, which means investing could be a viable alternative.
And yet, people aren't exactly flocking to it. Indeed, research from HSBC shows that many savers are completely in the dark when it comes to investing, with a lack of education putting people off as much as the higher level of risk associated with it. Given the potential returns on offer, however, it could be time to get educated.
Research from HSBC found that 21% of savers admit that lack of knowledge is preventing them from investing, while 9% admit that they don't know how to get started. Yet many fail to seek suitable advice that could encourage them to meet their goals: 56% of those with savings of £15,000 or more have never received investment advice from a professional adviser, while almost half don't think it's worthwhile seeking professional investment advice on savings of anything less than £25,000.
This means huge swathes of people could be missing out, while others could be seeking advice in the wrong places. Indeed, many would turn to informal sources for investment advice such as the internet (49%), the media (35%) and family members (28%), yet without professional input, it could still mean they lose out.
Many people simply think that they're not wealthy enough to benefit from investment advice, yet as Michelle Andrews, head of UK Premier and Wealth Insights at HSBC, points out, "you don't have to be wealthy to invest". She advises people taking their first steps in the world of investment not to be put off by the term 'wealth' in wealth management, and encourages people to seek the advice that works for them, be it in a face-to-face meeting or through a telephone conversation when schedules allow.
Don't be confused by jargon – always ask any adviser to explain things in plain English, or get a head start by swotting up on the terms used in our investment glossary – and above all, make sure to think long term. An investment isn't the same as a cash savings account, and for that reason should only be considered by those who are happy keeping their money out of arm's reach for the foreseeable future.
This offers the potential for better returns as you've got a better chance of riding out any volatility, but you'll need to be prepared for the extra risk that comes with it, too. Whatever you do, make sure to seek advice before you take the plunge, and start finding out more about how investing could work for you.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.