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I want to start investing with £1,000. Where do I start?

27 October 2021

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Question by Sophie

I have about £1,000 in my current account, no major debts other than a student loan, and I’m thinking about saving into a pension or an ISA. I haven’t got very much but I’m trying to be sensible. I’ve had a look but don’t really know where to start. Help!?

Answered by Hayley Millhouse

An ISA and pension are great starting points when it comes to investing as they often form the bedrock of most successful long term savings strategies. Before determining what you should do with your £1,000, it’s worth considering these points in priority order:

  • Do you have an emergency fund of at least 3 x monthly expenditure that’s easily accessible in cash? The purpose of this is to help cover any unexpected expenditures such as one off bills or necessary purchases.

  • What are your primary goals for investing and what would you like to achieve with the money? If you are comfortable locking your money away until the age of 55 under current legislation (rising to 57 in 2028) then there are some tax efficient benefits of investing into a pension. Alternatively, if you would prefer the flexibility of accessing the funds in the future (before the age of 55) then a Socks & Shares ISA might be a more suitable product for you, as long as you can leave the money invested for at least 5 years.

  • Are you comfortable taking investment risk and what is your risk tolerance? This will help identify whether these products are suitable and more specifically, which type of investment would be right for you.

By taking the above factors into consideration, it should help you establish whether investing is suitable for you at this time. We would recommend getting advice before going ahead. Try taking the OpenMoney financial health check first.

Answered by

Hayley Millhouse

Managing Director @ OpenMoney

I joined OpenMoney in May 2017 and oversee advisory and customer services in the regulated business. This includes investment, mortgages, compliance, and all customer facing activities. I have over 17 years’ experience working in the financial services industry and have attained Chartered Financial Planner status.