Should you save or invest your money?

It may not seem obvious at first glance, but saving and investing money are completely different concepts and play different roles when it comes to your financial planning.

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We are living through a prolonged period of low interest rates, and anyone who is overly reliant on cash savings will be receiving minimum returns and will see their savings barely keeping pace with inflation.


The upside is that cash deposits, government bonds and high-liquidity stocks offer a degree of security. They are easily accessed in case of financial emergency or if you wish to reduce your debt at any given time.

For those using their surplus income in this way, the fluctuations of the stock markets are often seen as alarming, with the dramatic falls in world markets at the start of 2018 being one example. It is important to remember, however, that markets correct rather than collapse, and falls often follow steep rises.

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Most of the time, you will not be using a financial advisor if you are adopting a savings strategy, but should you decide to diversify and use some of your cash to create an investment portfolio, you should seek advice. This is because you will be looking to purchase assets in a diverse manner aimed at generating a safe, steady return over time.


There may be cash investments in your portfolio, but the basket of investments will almost certainly outstrip the return on cash-only deposits over an investment cycle.

You can begin your search for advice by looking at the Financial Services Register, a public record of firms, individuals and other bodies that are regulated by the PRA and/or FCA.

Whether you are looking for an independent financial advisor Wroughton, Swindon or Avebury, you will find reliable firms at sites such as, among others.

Saving cash and having an investment portfolio are not mutually exclusive, and an IFA will be able to explain the balance you should be aiming for. For example, having cash savings equivalent to six months of your essential outgoings can give peace of mind if you are concerned about your job security.

Once you have those cash savings in place and have a solid pension plan with all the tax benefits that offers, then you can branch out into investing with the help of your IFA.