AN AFFORDABLE WAY TO MAKE YOUR MONEY GROW IN INVESTMENT FUNDS

WHY START A MONTHLY SAVINGS PLAN?

A monthly savings plan can help you to save for the future – whether to realise personal dreams, enjoy a more comfortable retirement or simply for the sense of security it provides.

ARE THEY AVAILABLE FOR THOSE WITH A MODEST AMOUNT TO SAVE?

Helpful Hint

Before investing in the stock market it is important to understand the different investments available and their associated *risks*.

Yes. *Investment funds*, also known as *unit trusts* or *open-ended investment companies* (OEICs), offer easily accessible savings plans starting from as little as Ł10 per month (although the minimum amount you can invest will vary from fund to fund). Monthly savings plans make the discipline of investing a small sum of money each month easy, because your monthly contribution can be automatically debited from your bank or building society account. The Investment Management Association’s website offers a “Find a fund” facility - a comprehensive list of investment funds which offer a monthly savings scheme. To use this facility please visit: www.investmentuk.org/investors/find_fund

WHY SHOULD I CHOOSE AN INVESTMENT FUND SAVINGS PLAN?

Banks and building societies offer a safe and secure home for your money and can to help you with your daily needs or to save for a rainy day. Over longer periods of time, however, the *interest* you receive on your savings may not be able to keep up with rising *inflation*. So your money could lose value in terms of what it could buy (e.g. a Ł1 coin will always be worth Ł1, but what you can buy with that Ł1 coin will reduce as inflation rises).

If you are looking to build up money over a period of time, you may want to consider an investment fund savings plan. There are different types of investment fund to choose from including those which focus on investment in *bonds* and money market.

Alternatively, you may wish to choose a fund which invests in *shares*. Share-based investments should only be considered for the long term, (e.g. 10 years or more) due to the ups and downs of the stock market, which can decrease as well as increase the value of the the money you invest.

This means that before placing money in funds investing in the stock market you must be sure that they are appropriate for your needs.

IMA produces a guide called “Introducing Investment” which explains more about the different types of investments available and the associated risks. Should you be in any doubt about whether an investment is suitable for you, you should contact an authorised *financial adviser* for assistance. See “How do I find out more?” for details.

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