Savings or Investments?

Local independent financial adviser, Ben Morris of Morris Financial Management, looks at the pros and cons of savings vs investments:
From easy access saving to tax-friendly cash ISAs, there’s no shortage of savings accounts, each with their own advantages and restrictions. Historically, easy access accounts have not always offered the best interest rates, but they do provide the flexibility to take money out whenever you need it.
Many other accounts offer a more generous (and often fixed) interest rate on the proviso that your money is left untouched for a set time.
In a low-interest savings account, there is a risk that your cash savings may struggle to keep pace with inflation. So, even though your cash balance is steadily increasing, your money may be worth less in real terms as things get more expensive to buy.
As the base rate rises, so has the pressure on banks and building societies to increase their savings rates and, there is some evidence that this is having an impact, as some are gradually raising rates.
When it comes to investments, whatever you invest in, you’re usually hoping to grow your money one of two ways: through dividends (if you’re investing directly in shares) or through capital appreciation (the value of your investment going up). Or ideally, through both.
The potential rewards of investing are far greater than cash savings, particularly at times of low interest. However, investments expose you to the risks and vagaries of the stock market.
Your investment could fall in value and it may fluctuate up and down on a regular basis over the short term. That’s why most investments are made for the longer term – to provide time for overall growth and allow room to recover from any bumps in the road.
While the investing versus saving debate is often pondered, there’s absolutely no reason why you can’t do both.
An independent financial adviser is ideally placed to evaluate your financial objectives and provide advice on the best approach for your individual circumstances.
For pensions and investment advice contact Ben Morris on 01745 798260 or email

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