Popular kinds of investment in the UK

If you have money to invest, it’s wise to take the time to look at the different options open to you. Different investment products suit different needs and situations so you have to be sure that what you choose is at the level of risk you’re comfortable with and the type of return you see.

Here are some of the most popular kinds of investment in the UK. Always seek independent advice if you’re not sure of the next step to take.

Stocks and shares

Investing money in stocks and shares is known as a direct investment. You own shares in the company you’ve selected; another term for this is equities. The value of the shares then goes up and down on a day to day and even hour to hour basis. The reasons behind this are complex and related to a number of factors such as the performance of the company, the related industry, the economy of the country and even world events. It’s wise to research well before investing this way as money can be made – and lost.

Buy to let property

A buy to let property is a home which is rented out to a tenant. The investment is the purchase of the property and the expectation of the combination of the property rising in value and bringing in an income from the tenant.

At one point, buy to let was incredibly popular and some had portfolios of properties worth well over a million. Following the banking crash of 2007 however, the market has changed and whilst it is still perfectly possible to see buy to let as a worthwhile investment, it is one to be fully researched with all the economic and tax implications fully investigated.

The positives to a buy to let are that if purchased when the housing market is at a low, there is a good chance of profit when selling. A long term tenant can give a good return with the rent and so can be an attractive proposition.

Unit trusts

Unit trusts are known as an indirect kind of investment. They are monies which are overseen by an investment manager. Investment trusts can be complex when initially looking to devise a strategy as there are a number of levels of risk. The manager working on your behalf has a range of choices they can make with your funds and will probably invest in a multiple number of asset classes; stocks, bonds or cash-based money market products.


Pensions can either be a workplace or personal pension. A workplace pension sees your money invested in a range of financial assets and there is usually a contribution from your employer. Pooled funds (a unit trust where pooled money is managed by a third party) are the most common way workplace pensions are invested.

A personal pension is a way to invest and save for the future. If you don’t want to be part of a workplace pension, this is an alternative. Personal pensions attract government tax relief and this money is also placed in a pooled fund.

Whether you have £100 or £100,000 to invest, it’s a decision not to take lightly. Don’t be swayed by get rich schemes as they rarely live up to their promises and always be happy with the decisions you are making before signing up.  Having peace of mind is one of the most important things about investment; it’s your money so only use it in a way you feel is best for you.

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