8 Ways To Invest In The UK: Investing Guide

Last Updated December 6th 2021
9 Min Read

You have probably heard of Warren Buffet and Richard Branson. The two are some of the most renowned investors in the world, and they are known for having solid investment strategies that have contributed to their massive net worth. 

Investments are a guaranteed way to ensure that you have a long-term plan regarding your finances. While investments carry some risks, they offer higher returns than saving money in your bank account. 

In this guide to invest in the UK, we are going to expain where to invest in the UK, and how to invest. The guide will also explain 8 different ways on where to invest your money in the UK.

Moreover, investments give you exposure to the financial market, and this way, you get to learn more about different companies and the investment options available in the market. 

Where To Invest In the UK:

There are many ways you can invest your money in the UK. After going through the following investment options, you can decide on how much you wish to invest, and which option suits you the most. 

Below are the top financial instruments for investors in the UK: 

  1. The Stock Market
  2. Mutual Funds
  3. Exchange-Traded Funds
  4. Forex Trading
  5. Precious Metals
  6. Bonds
  7. Real Estate
  8. High-Yield Savings Account


1. Invest in the Stock Market from the UK

The stock market is usually the first investment option that comes to the mind of an expert trader. The stock market allows you to buy shares in a company, and this way, you get to own a piece of that company. 

You can make money in the stock market in two ways: dividends and stock appreciation. 

Dividends are returns paid annually to a company's shareholders. Dividends are acquired from a company's income; hence, the higher the income of a company in a particular year, the higher the dividends will be. 

The other way to make money in the stock market is through stock price appreciation. This is where you buy low and sell high. For example, if you buy a stock worth $25, and it rises to $40, you can sell the stock and enjoy your profits. 

The UK stock market is home to many companies you can invest in. However, it is also possible to invest in the US stock market while in the UK. 

To buy stocks in the UK, you need to open a brokerage account. 

Check Out: Top 5 UK Growth Stocks That Could Make You Rich

2. Invest in Mutual Funds 

The second way to invest in the UK is through mutual funds. Mutual funds rank as one of the most popular investment strategies that you need to increase your savings. 

The stock market needs time and expertise to keep a regular check on your investments. If you do not have the two, you can buy shares of a mutual fund. 

With a mutual fund, you will work with a fund manager who will guide you in selecting the best stocks under the fund. The stocks you buy using this fund will give you maximum returns, allowing you to grow your savings. However, take time to learn about mutual funds before investing in them. 

3. Invest in the Exchange-Traded Funds (ETFs)

The stock market is good, but it is not for every trader. Some traders do not want to be fully exposed to the risks of holding stocks. In this case, they can seek exposure to different investments using an exchange-traded fund (ETF). 

An ETF is like a pool in that it brings together different stocks in the same category. For instance, if you prefer stocks of technological companies, you can buy an ETF that contains stocks from different technological companies. 

An ETF tracks the performance of the underlying assets. Therefore, its performance will depend on the price movements of the stock/stocks contained in the ETF. 

If you want to invest in stocks in the UK, you need to create an online brokerage account linked to the exchange supporting the ETF. 

4. Forex Trading in the UK

The other way of investing in the UK involves forex trading. This is where an investor bets on the fluctuations of different currencies. Currencies fluctuate at different rates. For instance, you can trade the UK Pound against the US dollar to take advantage of the price movements and profit. 

Forex trading can be a risky venture because of the volatility of different currencies. Therefore, before deciding to settle on forex, ensure that you understand everything the forex market entails. 

The best thing about forex trading is that you do not have to trade yourself. You can use a forex broker that will trade on your behalf. However, the risks involved will still be the same. 

To invest in the forex market in the UK, you need to create an account with a forex brokerage firm. 

Read Also: The Ultimate Beginner’s Guide to Trading Forex Online in the UK

5. Precious Metals 

Investments are not just for the next two or three years. You also need a long-term investment plan to hold your savings in something whose value will definitely appreciate in the next decade or two. 

Precious metals benefit from being deflationary, as they are resources that have a capped supply. Gold, diamond and silver make for some of the top precious metals you can buy to protect your savings from inflation. 

You can buy gold and other precious metals from stores in the UK that sell such commodities. However, this could incur additional storage costs. 

The best thing about investing in precious stones is that you do not have to buy them directly. For instance, you can choose to buy an ETF that tracks the price of gold. The ETF will be backed by gold reserves stored in a vault. 

Additionally, you can trade precious metals through CFDs. CFDs allow you to bet on the price movements of these commodities. CFDs are also ideal for an investor that does not want to own the actual metal. 

Read More: Learn How to Trade Gold Online in the UK

6. National Bonds of the UK 

The other way for you to invest in the UK is through bonds. You can choose between government bonds or corporate bonds.

Government bonds are less risky because you are 100% guaranteed returns. However, they also offer low-interest rates. On the other hand, corporate bonds can be risky, but they offer higher interest rates. 

Bonds are used by governments and companies to raise funds from the public. You can make money with bonds through the interest offered on these bonds or through the increased valuation of the bonds. 

The other best thing about bonds is that you can hold them for up to 20 years, and the interest is paid periodically. This creates a sort of passive income for you as you wait for your bond to mature at a later date. 

7. Real Estate 

Real estate ranks as one of the oldest yet still the best investment you can make. The best thing about real estate is appreciation. Real estate prices tend to shoot massively over the years because of development. 

To invest in real estate in the UK, you need to evaluate several factors. One of the most critical factors is the location of the real estate development. Ensure that the land or property you want to buy is situated in a prime location or a location that has the potential to grow. 

Moreover, you also need to check the net rental income in the area from where you are developing. If you buy a property, you can rent it out to generate passive income. 

On the other hand, you can buy land and wait until later when the land becomes a prime location, after which you can build and generate high net rental income or sell the land to developers for high prices. 

Real estate is known for high prices, and if you do not have money to invest on your own, you can choose crowdfunding, where investors donate money to a pool, which is later used to buy or develop properties. 

To get the best real estate properties, you can consult with a real estate agent. 

8. High-Yield Savings Account in the UK Banks 

Last but not least, we have a high-yield savings account. If you do not want to consider investment options but want to hold money in your bank account, you can choose to create a high-yield savings account. 

High-yield savings accounts usually offer higher interest rates than normal savings accounts. Moreover, they are provided by several banks in the UK. Therefore, when creating your savings account, consult with your bank to know the savings option to generate the best profits. 

Tips For Investing In The UK 

Now that you know the different investment options in the market, the other thing to do is learn several investments tips for the UK market. These include the following: 

Diversify your portfolio 

This is like a golden rule in the financial sector. You should not put all your eggs in one basket. Diversify your investment across different financial instruments to maximize your profits and mitigate risks. With a diversified portfolio, you can be sure that the other will still hold your portfolio together when one investment fails. 

Consult a financial expert 

If you are new to investments, do not enter the market blindly. Employ the services of a financial expert who will explain to you the different investment options available. The best thing about consulting with a specialist is that you will get a solution tailored to your needs, budget, and level of expertise.  

Have a clear goal 

The other thing about investments is that you need to set a clear goal. Goals ensure that you know what you want to achieve and recognize the achievement when it is realized. Setting goals also ensures that you stock to your investment path. 

Set a budget 

The only way to have money to invest is if you budget your finances well. Once you set a budget and stick to it, you will have some money to add to your investment portfolios. Adding to your investment regularly can lead to a large portfolio in the future. 

Be patient 

Last but not least, you need to be patient. Investing will not make you rich overnight. As aforementioned, setting a goal and sticking to it will benefit you in the long term. Lack of patience could lead to poor investment decisions that could cause losses. 

Don't Miss: 5 Things Millionaires Don't Invest In?


The UK is home to many financial instruments. While it is not easy to invest in all these instruments and still monitor your portfolio, you should invest in at least two instruments for a diversified portfolio. The more diversified your portfolio is, the lesser your risks if one investment fails. 

As an investor, you should also understand that research is the only way to truly become an expert trader. Therefore, always be keen to learn new things in the market. If you do not have time to research, consult with a financial expert to guide you in your investment journey. You can also employ a fund manager who will keep track of your investments and make informed investment decisions on your behalf. 

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