How To Invest £10K in the UK In 2023

Best investment options to Invest 10,000 Pounds in the UK

Last Updated April 21st 2023
25 Min Read

With a liquid amount of £10k in your hands, you are no longer limited to small investment options. 

That said, in a financial world full of new investment products - it can be challenging to figure out what to do with your money. 

To help you get a better idea, we have created our How to Invest £10K UK Guide - which compiles a list of the ten best ways for you to invest your capital in 2023. 

We will also give you an overview of what to consider in order to maximize the returns from the financial markets. 

How To Invest £10K UK - A Quick Glance 

If you are entering the investment space as a complete beginner, here is a quick picture of how you can start investing your £10K. 

  1. Choose an online broker that allows you to invest in different asset classes on a zero commission basis. 
  2. Fund your account using a credit/debit card, PayPal, or instant bank transfer. 
  3. Select the security you want to invest in. 
  4. On the trading page, enter the amount of capital you want to invest in the chosen assets. 
  5. Click on the 'Open Trade' button - and this will complete the purchase of your investment. 

Your capital is at risk. Other fees apply.

It is always best to work with a regulated broker such as eToro for your investments. This will ensure that you get access to diverse asset classes at zero commission rates and no stamp duty. 

How To Invest 10,000 Pounds UK  – Best Investment Options

If you want to invest £10,000 in the UK, here's a list of the top 10 investments to consider in 2023: 

  1. Legal & General Group High Dividend Paying Stocks
  2. Etsy  Stock with High Growth Potential
  3. Amazon  Long Term Growth Potential
  4. iShares Core FTSE 100 ETF  Best Overall Way to Invest 10,000 Pounds in the UK Market
  5. Vanguard S&P 500 ETF  Diversify in the US market
  6. SPDR Gold Shares Gold ETF for Hedging
  7. PIMCO Active Bond ETF  For Global Diversification
  8. Stocks and Shares ISA  Tax Free Returns
  9. Cryptocurrencies High-Risk with High Returns
  10. eToro CopyPortfolios  Best Way to Invest 10,000 Pounds Passive Returns


Best Ways To Invest 10,000 Pounds UK  

Determining the best investment for your portfolio can be a tricky process. There are several elements to consider, - and regardless of how much you want to invest, you should always do your due diligence. 

If you are looking for the best ways to invest £10,000, here we've put together a portfolio of stocks, crypto assets, ETFs, and gold.

Below we will further explain how to invest 10,000 Pounds in the UK.

1. Legal & General Group - High Dividend Paying Stocks 

Investing in equities is considered one of the best ways to grow your wealth. Buying company stocks can profit you in two ways - you can make more money in terms of capital gains and earn regular income through dividend payments. 

buy Legal & General Group stocks

As such, many investors choose to buy shares of a high-dividend paying company. In that regard, Legal & General Group (LGEN) can be a great option for your diversified investment portfolio. 

This UK financial services company offers different solutions - ranging from life insurance, retirement, investment management, and pensions. Although the company suspended its dividends during the pandemic, it has resumed payments once again. 

Legal & General announced that it would pay a dividend of 12.64p per share for the first quarter of 2023. This translates to a high yield of 5.93%. The company is also confident about its growth potential and reports that it expects to maintain paying out progressive dividends over the long term. 

However, it is also important to note that, as with any stock, there is also a certain level of volatility. Therefore, it is best to diversify your assets when thinking of how to invest £10k UK. 

buy LGEN stock

Your capital is at risk. Other fees apply.

2. Etsy - Stock with High Growth Potential 

If you have been under the impression that Etsy (ETSY) is only a hub for artists, then it is time to shift your focus to its share value. Not many people know that the company’s stock price has gone up by more than 600% in the last three years. 

invest in Etsy stock

Currently, Etsy has an impressive market cap of over $27 billion. The platform has attracted thousands of new customers in 2020 - generating approximately $10.3 billion in gross product sales. This number reflects a year-over-year increase of 107%. 

The main appeal of Etsy is the uniqueness of the products sold on the site. Put otherwise, you cannot find these items mass-produced elsewhere - which gives them a competitive advantage over other online retailers. 

Recent data suggests that an increasing number of people are willing to spend more on handcrafted and other one-of-a-kind goods on the platform. At the time of writing, in April 2021 - Etsy stock is worth around $218 per share. 

With the company's proven business model and a constantly expanding marketplace, Etsy could turn out to be one of the best high-yielding stock investments in your portfolio. 

Check Out: Best Growth Stocks To Invest In

buy etsy stock

Your capital is at risk. Other fees apply.

3. Amazon - Long Term Growth Potential 

Amazon (AMZN) has become a household name - not only in the UK but also worldwide. The company has been reinvesting its profits, constantly improving its performance - thus taking over the online retail market from competitors. 

Paired with unparalleled delivery speed and a wide selection of products, the company continues to be virtually unparalleled. What's more, the retail niche is only one part of Amazon's market. 

invest in Amazon stock

The company has ventured into other sectors - from streaming services and technological innovations to machine learning, AI, and more. 

Looking at the financial standing of Amazon, the most recent quarterly earnings for the last three months of 2020 exceeded all analysts' expectations. The company reported a surge of 44% year-over-year in revenue. Its operating cash flow and income also soared over 70%. 

For a company such as Amazon, these growth numbers are beyond remarkable. The company has an established long-term strategy that aims to further enhance its potential. 

With its stock price going up by nearly 80% in 2020, the company might continue to reap profits at the same rate for a while - as long as the business continues to maintain this trajectory. 

That said, investing in a single share of Amazon will cost you well over $3,000. However, you can find regulated brokers such as eToro that offer you fractional shares of companies. This way, you can start investing in Amazon from just $50. 

buy amazon stock

Your capital is at risk. Other fees apply.

4. iShares Core FTSE 100 ETF - Diversify in the UK market 

Instead of allocating your £10k into individual stocks, you can also choose to put your funds into an index that tracks the performance of the largest companies in the UK. 

For example, the FTSE 100 index tracks the 100 largest public companies listed on the London Stock Exchange (LSE). Investing in this index means that you will own shares in the top 100 firms by market capitalization that are publicly traded in the UK. 

invest in index funds

However, you cannot invest directly in the index. Instead, you can consider an ETF that reflects the value of FTSE 100 as its underlying asset. iShares is one of the leading ETF providers that gives you exposure to the largest UK-listed companies. 

By investing in the iShares Core FTSE 100 UCITS ETF, you will be able to purchase shares of all 100 companies listed on the FTSE 100 Index. In addition, your investment into the FTSE 100 stock will also reflect its respective weighting. 

For instance, in the iShares Core FTSE 100 UCITS ETF, AstraZeneca has a weighting of 5.12%. 

Meaning, if you invest your £10k into this ETF, 5.12% of your funds will be allocated to the shares of AstraZeneca. In plain terms, you will own £512 worth of shares in the company. 

Moreover, you will also be eligible to receive dividend payments distributed by the companies in the index. Similar to individual stocks, you can start investing in an ETF via commission-free broker eToro at $50 (about 35 pounds). 

buy iShares ISF

Your capital is at risk. Other fees apply.

5. Vanguard S&P 500 ETF - Diversify in the US market 

If you want to try your hands at the US economy, the S&P 500  might be more suited for you. This index tracks the largest 500 companies in the American market. One of the prominent S&P 500 ETFs available today is offered by the world's largest mutual fund provider - Vanguard. 

Investing in this fund will give you access to the shares of the 500 biggest public companies in the US. In other words, this offers you a lot of diversity for your £10k investment. 

Historically, the S&P 500 has performed well - with a return of over 10% every year. In 2020, the index generated earnings of 15.76%. This number does not factor in the dividend payments offered by companies - meaning that you will also profit via regular passive income. 

The Vanguard S&P 500 ETF is also known for its low expense ratio at about 0.03% per annum. If you have a long-term timeframe in mind for your £10k investment, this ETF can be a great choice for you to gain exposure in the US market. 

invest in index

Your capital is at risk. Other fees apply.

6. SPDR Gold Shares - Gold ETF for Hedging 

It is common for investors to always include a commodity such as gold in their investment portfolio. This allows you to hedge against the risks of an economic crisis. In other words, if the market suddenly takes a downturn, the profits from gold can help compensate for the losses you might make from your other assets. 

Trade Gold

If you are looking to invest in gold, the good news is that you no longer have to buy the metal in its tangible form. Instead, you can do so through an Exchange Traded Fund (ETF) that tracks the price of gold

This means that the value of your investment will also increase or decrease in relation to the market price of gold. The SPDR Gold Shares (NYSEArca: GLD) is deemed to be one of the prominent gold ETFs in the financial market. 

It was launched in 2004 and currently holds the position of being the largest physically-backed gold ETF in the world. 

Today, UK investors can get access to the SPDR Gold Shares through FCA-regulated broker eToro. It allows you to invest in gold at the click of a button and liquidate your position at any given time. 

Considering the costs of shipping, insuring, and storing gold bars at your own risk - investing in gold through an ETF is one of the most cost-effective ways to add this metal to your portfolio. 

Moreover, on eToro, GLD is also available to you on a commission-free basis. You can start investing in gold with just $50, leaving you plenty of room to diversify the rest of your capital. 

trade gold

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

7. PIMCO Active Bond ETF - For Global Diversification 

The two ETFs we discussed earlier focus on the UK and US stock markets, respectively. However, many investors might want to expand their exposure to global economies. 

The PIMCO Active Bond ETF was launched in 1971 and has maintained an excellent track record over the years. The PIMCO Active Bond ETF can give you access to markets in several countries - including Mexico, France, Germany, Brazil, the US, and the UK. 

This bond ETF primarily invests in a portfolio of fixed income Instruments, represented by derivatives such as futures contracts and options. 

Finally, in terms of performance, this bond ETF has generated an annualized return of 3.93% over the past five years. In addition, there is also a running distribution yield - which allows you to receive dividend payments. 

start invesing now

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

8. Stocks and Shares ISA - Tax Free Returns

A Stocks and Shares Individual Savings Account (ISA) allows you to invest in a wide range of equities - including stocks, funds, and bonds. In accordance with the current UK guidelines, you can invest up to £20,000 into this financial market. 

The main advantage here is that you do not have to pay any tax for the capital gains or dividend payments that you might receive. 

That said, it is important to note that a Stocks and Shares ISA comes in the form of a trading account offered by UK brokers. In other words, unlike ETFs or bonds, you will be entirely responsible for choosing which assets you want to invest in. 

However, you can decide to invest in ETFs through your ISA - diversifying your portfolio in one go. 

buy stocks

Your capital is at risk. Other fees apply.

9. Cryptocurrencies - High-Risk with High Returns 

For those who are new to the alternative finance market, cryptocurrencies have been soaring in popularity as investment assets. 2020 was particularly good for the crypto market, with Bitcoin and Ethereum being the biggest winners. 

investing in cryptocurrencies

To give you a better idea, in April 2020 - Bitcoin was priced at around $7,000 per coin. One year later, a single Bitcoin is valued at $59,882 at the time of writing. This indicates an increase of 750% in a matter of one year. 

Following suit, Ethereum is another cryptocurrency that has demonstrated tremendous growth in the past year. The digital coin has grown by over 1,100% in value since April 2020. 

In addition, Ethereum is also expected to play a primary role in the significant development of the Decentralized Finance ecosystems. This might drive the price of the digital coin even further upwards. 

There are also hundreds of other cryptocurrencies that have displayed consistent returns in the past years. These include Litecoin, Ripple, Ethereum Classic, and more. 

Although cryptocurrencies have high growth potential, it is also crucial to keep in mind that this market is highly volatile. Therefore, it would be best to hold modest amounts when investing in digital currencies. 

With this in mind, the FCA-regulated broker eToro also offers cryptocurrencies on its trading platform. If you want to invest in any digital coin, all you need to get started is $25 (about 18 pounds). 

Read Also: Best Cryptocurrency To Buy Right Now

buy cryptocurrencies

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

10. eToro CopyPortfolios - For Passive Investment

With any type of investment, it is crucial that you do your own due diligence before risking your capital. That said, not everybody has the time and resources to invest in learning about the financial markets and doing the relevant research. 

If you would rather choose a passive strategy, it is best to rely on the expertise of experienced investors - such as using the CopyPortfolios feature offered at eToro. 

 etoro CopyPortfolios for passive investment

In a nutshell, CopyPortfolios are investment bundles of financial assets. These securities are handpicked by eToro's experts based on a predetermined strategy. You can choose to invest in one of these CopyPortfolios depending on which market you want to gain exposure in. 

You have the option to choose specific markets or investors to mirror their strategies into your own portfolio. The minimum amount needed to invest in a CopyPortfolio starts at $1,000 (about 700 pounds) - within which you can also choose a diversified collection of securities. 

In other words, once you invest in a CopyPortfolio, you do not have to worry about which assets you choose. This option enables you to capitalize on the financial markets without having to do the legwork by yourself. 

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77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

How To Invest £10K UK - What To Consider

Before you choose how to invest £10k in the UK, it is important to take a look at your investment mindset. £10,000 is a lot of money, and you will want to make sure that you spread it across a handful of different investments, rather than putting it all in one basket. 

In this section, we will take a look at how you can build your £10k portfolio to maximize the returns and minimize the risks. 

Short-term vs. Long-term Financial Goals 

When choosing the best way to invest 10,000 Pounds, one of the first considerations is to know what your short-term and long-term financial goals are. 

To elaborate, you can categorize your short-term goals into what you are planning to do within the next five years. This might include saving money for a holiday or for a down payment on a house. 

When investing money for the short-term, you should always prioritize the liquidity of your assets. Meaning - you should be able to cash out your investments for money without delay. 

On the other hand, your long-term goals look at what you want to do over a span of five or ten years from now. Instead of merely saving your £10k in a bank account, investing can be the best option in order to beat inflation in the long term. 

Alternatively, you can mix assets with different time horizons - thus keeping your options open. This will also ensure that you have cash on hand to invest in new opportunities as they come along. 

Balancing the Risk and Return 

Your return on investment is what you gain after deducting its cost. This could be calculated in terms of capital gain, dividend payments, or interest rates. 

That said, in the financial market, it is usually observed that high return investments always come with the cost of high risk. For instance, some cryptocurrencies and growth stocks could be considered a great way to unlock huge earnings - however, these are also largely volatile. 

Put simply, there is always the chance that the market could take a bad turn - leading you to lose some or all of your money. 

On the other end of the spectrum, you also have low-risk investments such as savings accounts - but they offer low returns that might not even cover the rate of inflation. 

Thus, it is important that you understand what risks you are taking and what returns you are aiming for before you make any investment decisions.

Consider Dollar-Cost Averaging 

Dollar-cost averaging is an investment strategy that entails you investing a certain amount of money in the same security at regular intervals over a course of time. 

This way, you will be able to buy more of an asset when the price is low and less of an asset when the price is high. 

For instance:

  • Suppose that you want to invest in the shares of Etsy. 
  • Let's say that In 2023, the price of Etsy stock is listed at $225. 
  • Like any other investment, the price of Etsy shares fluctuates from one month to another. 
  • By May, let's say that Etsy shares are at $200, and in June, Etsy stocks are valued at $190.  
  • As an investor, you keep investing $1,000 into Etsy shares every month.
  • Meaning, in April - you bought 4.44 shares of Etsy. 
  • In May, you bought 5 Etsy shares. 
  • And in June, your investment of $1,000 is worth 5.26 shares of Etsy. 
  • In total, using the dollar-cost strategy - you now own 14.7 shares of Etsy in total. 

On the other hand, if you have invested the entire amount of $3,000 at once - you would have been able to purchase only 13.3 shares of Etsy - at $225 per stock. 

But by staggering the purchases, the average cost of the Etsy shares you own comes to $204.08. With a dollar-cost strategy, you are able to reduce the risk of the investment - especially in a volatile market. 

How To Invest £10K - Diversification 

Every investment requires risk to generate returns. However, that doesn't mean that your portfolio has to be left exposed to wider market conditions. 

This is where diversification comes into play. By investing your funds into a wide range of assets, you will be able to reduce the risk within your portfolio. 

A truly diversified portfolio will allow you to smooth out the negative performance of one asset with positive returns from another. As such, it is always wise to add a few low-risk stocks, funds, or commodities into your portfolio. 

how to invest 10K, portfolio diversification

These might not always get you high returns; however, during a market crash - these assets could become valuable tools for hedging. 

It is also suggested that you mix different sectors when diversifying assets. For instance, instead of focusing all your investments in the tech industry - you should split it into multiple markets. 

However, it can take you a lot of time, knowledge, and skills to understand how to diversify successfully. This is why securities such as ETFs are popular among investors. It allows you to tap into diverse sectors, and companies, all through a single investment. 

How To Invest £10K UK - How To Choose The Best Online Broker

If you have read this How to Invest £10K in the UK Guide until now - you should have a clear idea of which financial markets are worth exploring for your portfolio. At this point, it is time to look into a suitable online broker that can allow you to make your investments in a convenient and cost-effective manner. 

To give you a little nudge - here we have put together a list of factors that you need to use when choosing your online broker. 

License and Regulation

There is a wide range of brokers out there. Some have been in the industry for several years, while others have been around for a relatively short time. If you want to separate the wheat from the chaff, the first thing to do is to find out whether the brokerage platform is regulated. 

For instance, in the UK, the Financial Conduct Authority (FCA) issues licenses for reliable online brokers. This will ensure that the platform in question abides by its guidelines, such as submitting for regular audits and keeping client funds separated from its own. 

Therefore, if you are a UK resident, your best bet is to choose an online broker that is FCA-regulated. For instance, social trading platform eToro is licensed by the FCA and also regulatory bodies in Australia (ASIC) and Cyprus (CySEC). 

Supported Asset Classes  

As we discussed earlier, diversification is one of the top concerns when thinking of how to invest £10k UK. However, it can be a challenge to manage your portfolio if you are choosing different brokers to invest in each asset. 

With that said, what you need is an online broker such as eToro - which can give you access to diverse asset classes across multiple sectors. The broker supports thousands of different securities across stocks, indices, ETFs, bonds, cryptocurrencies, and more. 

Moreover, regardless of which asset you want to invest in, you will be able to do so on a 0% commission rate at eToro. 

Fees and Commissions 

For those who are unaware, every investment you place through an online broker platform will be charged a commission. It is a fixed fee that will be measured against the size of your positions. 

For instance, let's say your chosen broker charges you a commission of 1.2% on stocks. This means - every time you purchase stocks, you will have to pay 1.2% of your investment. 

You will have to pay the same commission again - when you are selling your investment. However, with commission-free brokers such as eToro - you can waive this fee entirely. 

In addition, you also have to be wary about deposit and withdrawal fees 

Payment Methods 

When thinking of investments, you also have to be careful in ensuring that your chosen broker supports your preferred payment method. 

In all likeliness, the best brokerage platforms, such as eToro, offer a number of payment options - ranging from bank transfers, credit/debit cards and e-wallets. 

How To Invest £10K In The UK Tutorial 

Are you ready to start buying your £10,000 portfolio? 

In the final section of our How to Invest £10K in the UK Guide, we will give you step-by-step instructions on how you can start with the beginner-friendly broker eToro. 

By investing through this online brokerage platform, you will be able to gain access to commission-free assets and extensive guides for your investment journey. 

Step 1: Create an eToro Account

You can get started at eToro by registering an account with them. Sign up by providing your email address and personal data - including your full name, contact details, and date of birth. 

As an FCA-regulated broker, eToro will need you to verify your identity so that you can access the full functionality of the platform. 

However, you can complete this in a few minutes by uploading a copy of your passport/driver's license and a recent utility bill that proves your resident address. 

Step 2: Deposit Funds

The next step is to add funds to your investment account. You can deposit money through a bank transfer, credit card, debit card, PayPal. Neteller, or Skrill. 

Step 3: Start Investing

At this point, you are ready to start buying assets for your portfolio. To give you an example, if you want to buy stocks in Amazon, you can search for the company on eToro. 

invest in stocks

From the results, you can click on the 'Trade' button to start your order. 

Once you are on the trading order form, enter the amount you want to invest in Amazon in US dollars. As we mentioned earlier, you can start investing in stocks with as little as $50 on eToro. 

Finally, click on 'Open Trade' to complete your commission-free investment. 

How To Invest £10K In The UK - Conclusion 

When thinking of how to invest £10k in 2023, there are several questions you need to ask yourself. For instance, do you want to generate capital growth over the long term? Or, do you prefer to earn passive income now? 

Once you have a clear idea of your financial goals, then you can set out to choose the best investments for your £10k. 

Finally, no matter which security you choose, make sure that you make your investments only through a regulated online broker such as eToro. This way, you will be able to benefit from access to a diversified set of assets - all available at your disposal at zero commission rates. 

Ready to Build your £10,000 Portfolio? Get started with eToro today!

eToro – Best Broker To Invest 10,000 Pounds

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eToro have proven themselves trustworthy within the industry over many years – we recommend you try them out.

81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

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How To Invest £10K in the UK - FAQs

Which is the best way to invest £10,000?

There are several investment options for you to choose from. Depending on your risk tolerance, you can choose a high-return investment such as a growth stock or a low-risk investment option such as a savings account.

How can I diversify my £10,000?

Diversifying is always a good strategy in order to mitigate the exposure of your portfolio. You can diversify by investing your £10,000 across different asset classes in multiple economies. For instance, you can choose to invest a part of your funds in stocks while allocating the rest between bonds, commodities, and cryptocurrencies.

Is it wise to get expert financial advice before investing £10,000?

Finding the right investment opportunities will take skill and experience. It is best that you do your own research in order to determine how to invest your £10k UK. However, if you need an expert's guidance, you can always choose to get a professional opinion.

What is the most tax-efficient way to invest £10,000?

If you are looking for tax benefits, the best way is to invest your £10,000 in an ISA or SIPP. This allows you to write off any earnings from capital gains or dividend payments.

Is it a good idea to invest £10,000 in a savings account?

Investing in a savings account is one of the lowest-risk ways for you to set aside your capital. However, such investment options often come with a low-interest rate.