Brits could turn £10,000 into over £60,000 (Image: -)
Brits could turn their £10,000 savings into £60,074 by making one switch, according to experts. Financial experts are advising savers with idle cash to move their savings into long-term investments for greater outcomes.
The Retail Investor Campaign was recently launched and aims to bridge the “investing gap” for around 7 million Brits with over £10,000 in savings. Rather than using an average savings account, the experts suggest investing in line with the global index and reinvesting dividends. According to Emma Wall, Chief Investment Strategist at Hargreaves Lansdown, if you invest £10,000 in savings, you would have earned £24,330 over a 30-year period. However, this figure rose to £60,074 if this cash had been invested in the MSCI All Country World Index (in £).
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Meanwhile, Rachael Griffin, tax and financial planning expert at Quilter, told the Daily Express that the UK needs to shift towards an investment culture if people are going to “achieve long-term financial security”. She added that “too many people keep most of their hard-earned money in cash savings paying very low interest”.
She continued: “Holding some cash is important, such as an emergency pot covering around three to six months of essential spending. But once that safety net is in place, investing can be a sensible next step for those who are able to do so.
“We won’t turn Britain into a nation of investors overnight, but the investment campaign launched last week is a helpful step in shining a light on investing and making it feel less daunting. By improving understanding and building confidence, it can encourage more people to think about how their money could work harder for them over the long term.”
While a £10,000 investment in the MSCI All Country World Index (£) would return over 60,000 in 30 years, this figure leaps to £117,786 if the dividends are reinvested. Ms Wall said millions of Brits are missing out on thousands of pounds in returns, which could “significantly impact your long-term outcomes”.
Brits with idle cash are advised to move their money into long-term investments (Image: Getty)
Advice from the experts
Investing large sums of money can be daunting, so the financial experts have offered advice for those starting out. Ms Griffin advises people to “move at a pace that suits them”.
She explained how it’s important to weigh up your options before moving cash into long-term investments. This allows you to move with confidence and take the first step when the time is right.
She said: “For those who do invest, spreading money across different investments can help reduce the impact of short‑term ups and downs. Where appropriate, a financial planner can also help make sure investments reflect someone’s personal circumstances and long‑term goals.”
Ms Wall agreed: “So don’t let concern about where to invest stop you from taking your first steps. Many providers will offer ready-made funds managed by experts that can act as a great entry point and take the hassle out of investing, while you build your confidence.”
The experts have offered advice on how to invest cash (Image: Getty)
Meanwhile, Ms Wall reiterated how investing can be for most people even if they don’t think it. She explained: “If you have a pension, then you will already be invested in the stock market, but many people don’t realise this – in fact HL research shows that only 40% of people knew their pension was invested.”
Those investing should also take a long-term view, with experts advising people to invest money that they are unlikely to need in the next five years or more. They added that if you think you’ll need the money in the next five years, then cash is probably the better option.
Ms Wall continued: “Think about what support you are likely to need to build your confidence as an investor. When choosing a provider, think about what they can offer you in terms of helpful and broad research and insight to help you make a more informed decision.”