As interest rates are becoming so poor on savings accounts, it may perhaps be time that we start investing in stocks & shares.
I would like to share my experience in case it helps anyone. (For those sceptics, you don't have to invest, this is not compulsory.)
I started to invest in stocks & shares about 2.5 years ago as I saw that my OH was making huge profits and thought I should try. Since then I have made £40,000 net profit (and before those sceptics say this is boasting, I am putting numbers into context). If I had put the money into a savings account, I would have made a net figure of about £2,000.
Understanding stocks & shares investment is not as daunting as it may appear. It is certainly not rocket science. And it is a myth that stocks & shares investment are only for the rich as you can buy stocks with as little as £100. And certainly with a pot of £5,000 or £6,000 that people have in their cash ISAs, that is more than enough to start.
I always poo poo shares in the past as I don't like to take risks and did not want to lose my hard earned cash, but now that I am a seasoned investor, stocks & shares are not as risky as you may think. There are risky options for those that want to take high risks for high rewards, but for those that want low risk, like me, in exchange for just a decent reward over and above savings interest rates, there are safer options.
Fees are not expensive either. Hargreaves Lansdown's fees for funds are generally 0.45% of the fund value per annum, but capped at £45 a year for ISAs and capped at £200 a year for SIPP (self invested personal pension plan). You pay £11.95 for each trade, so hardly going to break the bank.
If you look at your pension provider fees, it will be more than 0.45%. It will be 0.7% to 1% of the fund value and you will find that you are put into a default investment option, which includes some form of share investment already.
Read up about investment in shares and start small. There is always something to learn. Investing in shares does not always have to mean that you lose money. Investment in shares are also very tax efficient in comparison to savings interest if you are a high rate tax payer.
You need to be able to choose safe funds and you need to be able to stay in for at least 5 years, which suits personal pensions and ISA investments or those that invest in 5 year savings accounts.