When it comes to building long-term financial security, investing is one of the most powerful tools available. Yet for many people, getting started can feel overwhelming. With unfamiliar terminology, market ups and downs, and the fear of making mistakes, it’s easy to put investing off altogether.
Investing continues to outperform cash ISAs
New data from Moneyfacts shows that investing has outperformed cash savings for a third consecutive year, despite previously elevated cash ISA rates.
The data underpins important considerations about the risk of holding too much cash ahead of the cut to the cash ISA allowance for under-65s – due to be implemented from April 2027.
Moneyfacts found the average investment ISA fund saw growth of 11.22% between February 2025 and February 2026. By contrast the average cash ISA interest rate was just 3.48% in the same period.
This average is down year-on-year, reflecting base rates cuts from the Bank of England (BoE) in the past 18 months. Since September 2024 the BoE has cut its base rate six times from a high of 5.25% to now 3.75% and may cut its base rate in 2026, depending on world events and the impact on the UK. This will have a further negative impact on average cash savings rates.
Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, comments: “Investing ISAs have now outperformed cash ISA returns for a consecutive year. Over the past 12 months alone, investing in stocks & shares has returned three times more to savers than a cash ISA, based on average returns”.
Of course, there is no guarantee that investing will outperform cash and you need to be away that the value of your investments (and any income from them) can down as well as up.
Not everyone will feel confident enough to invest, but if you receive good guidance, you can start small and slowly gain more knowledge to encourage you to increase your capital or investment values.
Here’s what you need to know about how to start investing in the UK.
Why investing matters
Keeping money in cash savings accounts may feel safe, but over time inflation can reduce the real value of your savings. This means your money may not go as far in the future as it does today.
Investing, on the other hand, gives your money the potential to grow faster than inflation over the long term. While investments can rise and fall in value, historically markets have delivered stronger returns than cash over extended periods.
Put simply: saving helps protect your money, while investing can help grow it.
There is no guarantee that investing will outperform cash and the value of investments (and any income from them) can down as well as up.
Step 1: set clear financial goals
Before investing, it’s important to understand what you want your money to achieve. Different goals may require different investment approaches.
Common objectives include:
- Building long-term wealth
- Saving for retirement
- Funding children’s education
- Generating future income
- Supporting major life plans such as buying a home
Knowing your goals helps determine how much risk you can take and how long you can invest for.
Step 2: understand your time horizon
Time is one of the most important factors in investing.
Generally:
- Short-term goals (under 5 years): lower-risk options may be more appropriate
- Medium-term goals (5–10 years): a balanced approach is often suitable
- Long-term goals (10+ years): investors can typically take on more risk for potential growth. The value of investments (and any income from them) can down as well as up.
The longer your investment timeframe, the more time you have to ride out market fluctuations.
Step 3: know your attitude to risk
All investments carry some level of risk. The key is finding an approach that matches your comfort level.
Your risk tolerance depends on factors such as:
- Your financial stability – whether you are prepared to lose money or not
- Your investment timeframe – whether you can wait for your returns
- Your personal comfort with market ups and downs
A well-diversified investment portfolio can help manage risk while still aiming for growth.
Step 4: choose the right investment vehicle
In the UK, one of the most popular ways to invest is through tax-efficient accounts.
Stocks and shares ISAs
These allow you to invest without paying income tax or capital gains tax on your returns. The Government is due to cut the cash ISA allowance for under-65s to £12,000 from April 2027. This measure was done deliberately to encourage more people to invest their money.
Pensions
Pensions provide tax relief on contributions and are designed for long-term retirement savings.
General investment accounts
Used when ISA allowances are fully utilised. Choosing the right structure can make a significant difference to long-term returns.
Step 5: start small and invest regularly
A common misconception is that you need a large lump sum to invest. In reality, many people start with modest monthly contributions.
Regular investing offers key benefits:
- Reduces the pressure of timing the market
- Builds disciplined saving habits
- Allows investments to grow steadily over time. (The value of investments, and any income from them, can down as well as up).
Consistency is often more important than the initial amount invested.
Step 6: think long term
Successful investing is rarely about quick wins. Instead, it focuses on patience, discipline, and staying committed to your strategy.
Market ups and downs are normal, but reacting emotionally can harm long-term returns. Having a clear plan helps you stay on track through changing conditions.
Why financial advice can make a difference
With so many investment options available, it can be difficult to know where to start. Professional financial advice can help you:
- Identify suitable investment strategies
- Manage risk appropriately
- Build a diversified portfolio
- Stay aligned with your financial goals
- Avoid costly mistakes
Your Insight independent financial adviser can help you assess the best way to balance the need for access to funds and ongoing long-term savings pot growth, giving clarity and confidence as you begin your investment journey.
Start planting your seeds today
Investing doesn’t need to be complicated or intimidating. By starting early, investing regularly, and focusing on long-term goals, you can give your money the best chance to grow over time.
If you’d like guidance on how to start investing or want to review your current financial plans, speaking with your Insight independent financial adviser can help you take the next step with confidence.
Get in touch today to begin building your financial future.
Sources and further reading:
https://www.moneyhelper.org.uk/en/savings/investing/stocks-and-shares-isas?
https://www.moneyfactsgroup.co.uk/media-centre/consumer/investing-beats-cash-isas-three-times-over-in-one-year/
https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate
https://thenegotiator.co.uk/news/uk-housing-market-news/bank-of-england-committee-member-predicts-three-base-rate-cuts-in-2026/
https://www.moneysavingexpert.com/news/2025/11/cash-isa-limit-cut-martin-lewis-budget/
Disclaimer: information is based on publicly available data and government announcements at the time of writing (March 2026) and may be subject to change.