Learn About Investing

Learn About Investing

Learn about

Should I invest?

This article is about investing in general, not Orbis Access in particular.

Should I invest?

Investing isn’t for everyone. Before you start, make sure you tick some boxes below.

If you’re happy that you’re on top of this lot, investing could be for you. The next steps may include setting some goals and working out how to achieve them with a sensible level of risk.

You may also first want to seek professional advice, especially if your financial situation isn’t straightforward.

Debts paid.

Credit cards being an obvious example. Your interest payments will probably be higher than any investment returns you’d make. So best practice is to pay off such debts before investing.

Mortgages may be the exception, but it may still be worth considering making early repayments as an alternative to investing, especially if you’re on a high rate.

A cash reserve to tackle life’s little, or big, emergencies.

Anything from a broken boiler to a spell without work.

A good rule of thumb is that you should have at least 3 months’ salary stashed in an instant access savings account, according to the Money Advice Service.

Insurance to protect loved-ones financially if something nasty happens to you. 

Life insurance (or ‘assurance’) pays out a lump sum if you die. It’s thus important to get cover if your family would struggle financially without you. Some employers provide this as a benefit though, so that’s worth checking.

Nobody wants to fall under a bus, but the grim reality is that one child in twenty loses a parent before leaving school.1

‘Critical illness’ or ‘income protection’ policies may also be in order. Find out more by researching online or speaking to an independent financial advisor.

Pension in place.

The chances are you’ll get old. And you’ll need money when you do. You probably don’t want to think about that right now but like it or not, it’s prudent to plan for retirement.

If you and/or your employer are making regular pension contributions, you could be set. But it is worth checking that what you are setting aside is in line with your expectations for retirement income (eg: with this calculator).

Pensions are of course a major topic in themselves, with major tax implications. One place to find out more is the Pension Advisory Service.

[1] Source: Childhood Wellbeing Research Centre, September 2011

Related links

  • Action plan – Decide whether to save or pay off debts

    Most people are better off paying off their debts before they start saving. Follow these quick checks to arrive at the right decision for you.

    Money Advice Service

  • Life and income protection insurance

    Learn about the differences between life, critical illness and income protection insurance.

    Money Advice Service

  • Life Insurance

    Level term life insurance pays out a lump sum to your dependants when you die, helping them cope financially when you're gone.

    Money Saving Expert

  • Pension Advisory Service

    Free and impartial guidance to people with workplace and personal pensions.

    Pensions Advisory Service

  • Plan your retirement income

    A pension is a way to save money and will give you an income later in your life. You can get a pension from schemes you pay into and from the government.

    Gov.uk