Investing can be a powerful way of helping you achieve your goals – whether that’s buying a new home, saving for retirement or something else.

Here are four reasons to consider investing your money.

1. Make your money work harder

One of the primary reasons to invest is to make your money work harder for you. 

It’s always important to have sufficient cash savings to cover emergencies, such as unexpected bills or a period of unemployment. One rule of thumb is to keep three to six months’ worth of outgoings in a bank account.

Beyond this, investing offers the chance for greater growth over time, helping you reach your goals faster. 

History shows that shares have typically delivered better returns than cash over long periods. For example, the chart below shows that a £10,000 investment in cash at the end of 1998 would have grown to £18,695 by the end of 2024. In contrast, a £10,000 investment in shares would have grown to £77,826.

Returns from £10,000 in cash and shares

Past performance is not a reliable indicator of future results. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.

Notes: Cash returns represented by the UK Sterling Overnight Index Average benchmark (SONIA) and global shares by the FTSE All-World Index with dividends reinvested. SONIA reflects the average rate of interest banks pay to borrow overnight.

Source: Factset, Vanguard calculations based on period 31 December 1998 to 31 December 2024.

Of course, investments can go up and down in value, and there’s a risk of losing some or all of your initial sum. But you can reduce this risk by spreading your money across different types of investments, sectors and regions of the world.

2. Preserve your money's spending power

Investing can also help you keep up with rising prices, otherwise known as inflation. Over time, things usually get more expensive, which means your money can buy less. For example, goods and services costing £100 in December 2024 would only have cost £56 in 2004¹. In other words, prices have nearly doubled over the past 20 years.

While a savings account can be a good choice for goals that are less than five years away, for longer-term goals your savings can lose value due to inflation. That means you might not reach your goals as quickly as you hoped.

By investing, you can give your money the chance to keep pace with inflation and grow in value over time.

3. Build a more secure financial future 

Investing can help you build a more secure financial future, especially when it comes to retirement. 

Your retirement may still be a long way off, but the earlier you start investing, the better. Starting early gives your money more time to grow, and even small, regular investments can add up to a significant amount over the years.

If you invest through a pension, you can take advantage of tax relief, which helps your money grow faster. For every £80 you save into your pension, the government adds £20, boosting your contribution to £100. If you’re a higher or additional-rate taxpayer, you can claim back an additional £20 or £25, respectively, via your self-assessment tax return.

4. It’s easier than you may think

One of the biggest misconceptions about investing is that it’s complicated. In reality, investing has become more accessible and user-friendly than ever before, and you don’t need to be a financial expert.

At Vanguard, we offer a range of services to help you get started. If you want a helping hand, we offer a managed service for those investing via our individual savings account (ISA) or personal pension. We’ll select a portfolio of investments for you, based on your attitude to risk.

Alternatively, you can build your own portfolio from our range of over 85 low-cost funds. Or you can keep things simple with an all-in-one solution, such as our LifeStrategy funds or Target Retirement funds, which combine different types of investments in one ready-made portfolio. 

No matter which option you choose, the key is to start now and stay disciplined. Even a small investment today can make a big difference to your future.

¹ Source: Bank of England inflation calculator

Investment risk information

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

The eligibility to invest in either ISA or Junior ISA depends on individual circumstances and all tax rules may change in future.

Eligibility to invest in a Vanguard Personal Pension depends on your individual circumstances. Please be aware that pension and tax rules may change in the future and the value of investments can go down as well as up, so you might get back less than you invested. You cannot usually access your pension savings or make any withdrawals until the age of 55, rising to the age of 57 in 2028.

If you are not sure of the suitability or appropriateness of any investment, product or service you should consult an authorised financial adviser. Please note this may incur a charge.

Past performance is not a reliable indicator of future results.

The Vanguard LifeStrategy® Funds and Vanguard Target Retirement Funds may invest in Exchange Traded Fund (ETF) shares. ETF shares can be bought or sold only through a broker. Investing in ETFs entails stockbroker commission and a bid- offer spread which should be considered fully before investing.

For further information on risks please see the “Risk Factors” section of the prospectus on our website.

Important information

Vanguard only gives information on products and services and does not give investment advice based on individual circumstances. If you have any questions related to your investment decision or the suitability or appropriateness for you of the product[s] described, please contact your financial adviser.

For further information on the fund's investment policies and risks, please refer to the prospectus of the UCITS and to the KIID before making any final investment decisions. The KIID for this fund is available, alongside the prospectus via Vanguard’s website.

This is designed for use by, and is directed only at persons resident in the UK.

The information contained herein is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information is general in nature and does not constitute legal, tax, or investment advice. 

Potential investors are urged to consult their professional advisers on the implications of making an investment in, holding or disposing of shares and /or units of, and the receipt of distribution from any investment.

Vanguard will manage your investments in the Managed ISA and Managed SIPP on your behalf. You will not be able to place trades on your own account.

The Authorised Corporate Director for Vanguard LifeStrategy Funds ICVC is Vanguard Investments UK, Limited. Vanguard Asset Management, Limited is a distributor of Vanguard LifeStrategy Funds ICVC.

For investors in UK domiciled funds, see our summary of investor rights and is available in English.

Issued by Vanguard Asset Management Limited, which is authorised and regulated in the UK by the Financial Conduct Authority.

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