Research on behalf of HSBC, shows over a third (36%) of the UK population is already investing. But many feel they don’t know enough to get started.
To help you, we look at:
Investing is when you set money aside for the future and put it to work for you. When you invest, you’re buying into something you believe will increase in value over time.
Remember – there are no guarantees, which means you could get back less than you invest. Your money could potentially grow too of course – that’s why people do it – but there is that risk you could lose money.
The key thing is to make sure you have some money saved up before you start investing. We recommend having an emergency fund to cover 3 to 6 months of living expenses.
An emergency fund can give you peace of mind that you’d have some money available for the unexpected, without needing to dip into your investment fund.
The value of investments can, and do, jump around – this is normal. Ideally, you should plan to set your money aside for at least 5 years to give it a better chance to ride out any short-term fluctuations. You can access the money if you need to.
Starting small could be a good way to dip your toe in the water. Then you can watch what happens to your investment – and invest more later if you want to.
Eligibility criteria and fees apply.
Just over one in three Brits (36%) are already investing, with most (44%) putting their money into stocks and shares, followed by funds (25%), bonds (20%) and property (19%).
There’s no shortage of options of what you can invest in, but there’s also no need to be overwhelmed.
To help you get started, let’s focus on two common ways to invest:
When you buy shares, you’re effectively buying a small stake in a company.
Companies sell shares to raise money, which they then use to expand their business. Investors (known as shareholders) are then free to buy and sell some (or all) of those shares on the stock market at any time.
If the company performs well (or is expected to), demand for its shares will generally increase – pushing its share price up.
If the company does badly (or is expected to), its share price will generally drop. Interest rates and the wider economy can also have an impact on share prices.
As a shareholder, the value of your investment rises and falls with the share price. While the money you invest has the potential to grow, it could also fall in value, so you may get back less than you invest.
When you invest in funds, you’re buying a mix of investments, so you’re not putting all your eggs into one basket.
If some of the investments in the fund perform badly over a certain period, others may perform well. Helping to spread your risk is known as diversification.
There are many types of fund on offer, but an especially diverse option is a ready-made portfolio. This is a collection of investments, typically made up of shares, government bonds, property as well as other funds – often from different regions around the world.
HSBC’s ready-made portfolios are managed on your behalf at a level of risk you feel comfortable with. They are run by a professional fund manager who chooses which global investments to hold, and monitors them on your behalf.
A stocks & shares ISA is not a type of investment. It’s an account you can choose to hold your funds or shares in to make them tax efficient.
This means you won’t pay any UK income tax or Capital Gains Tax on the returns you receive.
As with all things tax-related, the value of the benefits to you will depend on your circumstances, and tax rules can change in the future.
Explore: What is a stocks & shares ISA?
Good question. We can’t give you advice in this guide, but we can show you how our survey respondents chose their investments.
The most common reason selected for choosing stocks and shares is that investors expect good returns (34%).
Meanwhile, funds were more equally balanced with 34% of investors seeing these as offering good returns and 30% being 'safe', with the same being true of property (39% good return, 35% 'safe').
Those Brits who’ve chosen to invest in jewellery and alternatives (wine, art, whisky etc), were the most likely to say they’ve chosen to do so because they have expertise in that area (25%).
Like with all investments, there are no guarantees and the value of investments – even those investors see as 'safe' – can go up or down. It’s important that you can afford to invest and choose a level of risk you feel comfortable with.
If you choose to invest, any costs will be clearly signposted by the investment provider in the relevant product documents before you apply. It’s important to read these carefully before you invest – and to factor the fees in, as they will impact your overall returns.
Here are some common fees you may come across:
If you're investing in shares, you normally pay a fee every time you buy or sell them.
The cost a provider will charge to look after your funds or shares, giving you access to the tools and resources on their investment platform.
If you're investing in funds, this can be a useful comparison tool as it gives you a breakdown of the charges that are deducted directly from the fund, including the fund managers' annual management charge and other expenses.
This is the cost of receiving a personalised recommendation based on your circumstances. If you choose your own investments, you won't pay any advice fee.
To invest with us online, you need to have an HSBC current account or savings account (excludes Online Bonus Saver and Fixed Rate Saver). You also need to be registered for online banking and a UK resident aged at least 18 years old. Fees apply.
Here are some ways you can start investing:
Take the hassle out of investing with an HSBC ready-made portfolio – a fund with a mix of investments that's managed on your behalf. Choose your preferred level of risk and we’ll take care of the rest.
If you want to invest in companies that are adopting more sustainable business practices, you can choose one of HSBC's sustainable portfolios. Again, choose your preferred level of risk and we’ll take care of the rest.
Today, we and many of our customers contribute to greenhouse gas emissions. We have a strategy to reduce our own emissions and to help our customers reduce theirs. Find out more about our climate strategy.
All figures, unless otherwise stated, are from Sticky and Censuswide for HSBC. Total sample size was 2,018 adults. Fieldwork was undertaken between 27 to 31 October 2022. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 16+).