Investing smaller sums on a regular basis might also mean you can start investing sooner, giving you time to take advantage of the growth potential of compounding and the markets themselves.
Remember that the value of investments and the income from them can go down as well as up, so you may get back less than you invest.
A regular savings plan will allow your investments to benefit from:
Long-term growth potential
You may be surprised at how much even small amounts can grow to over a number of years. The table below shows how an investment can grow over time, assuming growth of 4.5%, ongoing charges of 0.95% and a typical service fee of 0.35% a year*.
|Monthly payment||10 years||20 years||30 years|
These figures are for illustration, the growth rate isn't guaranteed and you could get back less than you invest.
*Depends on the amount of money you have invested with us. More information on our service fees and charges.
As a natural part of your investment journey, there will be periods when prices go down as well as up. Investing in the dips means buying into your long-term investment at a lower price and bringing down the average price you have paid across the life of the investment – think of it like shopping for a product you know you like in the sales. In financial terms this is known as pound-cost averaging.
The difficult part is deciding when to invest and this relies on timing the low points – something even the pros treat with caution. So investing regular amounts every month helps take the guess work out of it, by helping you catch the high points as well as the low, smoothing your returns over the long term.
Explore more principles for good investing
Risk and return
Read more about balancing the chances of a loss with the benefits of a higher return over time.
Learn more about each asset class, its possible risks and potential benefits.
Read more about making your money work harder for you.
The value of investments can go down as well as up, so you may get back less than you invest. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.