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Five reasons to invest monthly

Our experts highlight the key benefits of drip-feeding money into investments with regular savings

Important information - please remember that the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. If you are unsure of the suitability of an investment for your circumstances please seek advice.

We all choose to invest for different reasons. You might be looking to save for retirement, your first home or simply for a rainy day. Whatever your financial goals, setting up a regular savings plan could provide a simple and effective way to help you reach your goals quicker.

With regular savings, you simply set up a direct debit and the money is automatically taken from your bank account each month and invested into your choice of funds, FTSE 350 shares or selected investment trusts and ETFs.

We believe setting up a regular savings plan is one of the best and most overlooked ways to build wealth over the long term and below we provide five reasons why you could consider drip-feeding money into investments every month.

Number #1


From month to month, it is possible that what you can afford to invest changes. For example, you might have an unexpected bill that you need to pay or one of your other monthly payments stops meaning you have more money to invest. This means the option to make changes to your monthly investments for a period of time can be incredibly valuable.

Unlike other financial commitments, a regular savings plan gives you this flexibility. You can choose to increase or decrease your monthly investments to suit your circumstances. You can even stop payments altogether and there’s no minimum number of monthly payments you need to make. What’s more, if you believe you’d benefit from redirecting your money into another investment for potentially greater returns, this can also usually be done easily.

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Number #2

You won’t forget to invest

With all the demands of life, it’s all too easy to forget to invest and put your money to work in the market. Setting up a monthly investment solves this problem and makes investing easier.

With regular savings, once you’ve selected the investments that are right for you and how much you’d like to invest, the money will be automatically collected from your bank account via direct debit and invested for you each month.

Additionally, as with other monthly payments (such as phone or utility bills), once you’ve set up the monthly payment, you will soon get used to the money leaving your bank account each month. It will simply become part of your regular monthly spending and could reap excellent benefits over the long term.

Start investing from just £25 per month

Invest monthly

Number #3

It can help balance your risk

‘Buy low, sell high’ is one of the most often-quoted investment maxims. However, the ability to time when to buy and sell investments on a regular basis is incredibly difficult – even for the most experienced of investors. Indeed, the legendary fund manager Peter Lynch once said ‘Trying to predict the direction of the market over one year, or even two years is impossible’.

In fact, it is far more likely that the average investor will follow the herd and buy more when the market is rising and less when it is falling. This is part of human nature but will inevitably lead to worse returns over the long term.

By investing smaller amounts every month, investors average out the buy price of investments and benefit from a phenomenon known as ‘pound cost averaging’. This means your investment buys more units or shares when the price goes down allowing you to smooth out the returns from investing in the stock market. However, it should be remembered that if the market rises above the original price, fewer units are purchased.

The graph below shows the number of units purchased with £1,000 every month based on rising and falling unit prices.

Number #4

It's affordable

It is a common myth that you need considerable sums to start investing. In fact, regular savings can be started from just £25 a month - that’s less than £1 a day. And over time, you can build a significant pot. As the chart below shows, if you’d invested £150 per month with a leading fund manager 25 years ago, you’d have a pot of over £119,000. Please note investment performance is not guaranteed and the value of your investments can fall as well as rise.

Past performance is not a guide to future returns.

Source for investment performance Lipper IM, income reinvested, to 30/06/2017.

Start investing from just £25 per month

Invest monthly

Number #5

Peace of mind

When investing a lump sum, investors are committing all their money to the stock market in one go. This means they will get the full benefit of any increase in share prices. On the other hand, if share prices fall, they will also feel the full negative effects. Falling share prices are an understandable concern for investors.

Drip-feeding money into the stock market can take away some of these worries. By drip feeding money into the market every month, if the stock market does fall, you have only invested some of your savings. Also as highlighted above, your future payments will take advantage of the cheaper share prices.

What clients say

Regularly saving into an ISA is an efficient way to drip feed into the market. Plus, it is highly flexible.

Mr Needham, Middlesex

The regular savings service is very easy to use and the service is excellent.

Mr Saleh, Liverpool

I found it very easy to set up a regular savings plan, with the mobile app I can monitor my investment very easily.

Mr Hinitt, Yorkshire

Get started today with regular savings

Please read our Key Features and Terms & Conditions before making an investment. Our Service is designed for investors who wish to make their own investment decisions, without advice. Investments should be considered for the long term, which is at least 5 years. If investing for retirement, ensure you are making the most of any employer pension contributions first. Tax rules can change and the value of any benefits depends on individual circumstances.

Stocks & Shares ISA

The HL Stocks & Shares ISA offers an easy-to-manage, tax-efficient solution giving you access to a wide range of investments and tools.

  • Shelter up to £20,000 this tax year
  • Save tax - no capital gains tax and no UK income tax to pay on income from your investments
  • Access your money if you need to

Invest monthly

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SIPP (pension)

  • A flexible, tax-efficient way to save for retirement
  • The government automatically pays 20% of your contribution through tax relief. If you are a 40% or 45% rate taxpayer, you could claim back even more through your tax return.
  • Money held in a pension cannot normally be accessed until age 55 (57 from 2028), up to 25% tax free and the rest taxed as income.

Invest monthly

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Fund & Share Account

  • Free to hold shares, ETFs and investment trusts
  • No investment limits
  • No inactivity fees
  • Access your money if you need to

Invest monthly

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