Investing in uncertainty – the power of regular investing

The new tax year has started and the ISA allowance, the limit on the amount investors can pay into an ISA each year, refreshes.

A study by BlackRock found only 36% of adults in the UK are currently investing and able to make the most of tax-free investing with a Stocks and Shares ISA.

And 70% of those who haven’t started investing yet say it’s because they worry they don’t have enough money to invest.

On top of all of that, we’ve seen jittery markets as the aftermath of Trump’s tariffs ripple across the globe.

But thankfully, there’s a way for investors to invest a little to go a long way.

This article isn’t personal advice. ISA and tax benefits depend on individual circumstances and rules can change. If you’re not sure what’s right for you, ask for financial advice.

Investing what you can

With HL you can start investing with just £25 a month, adding money to your investment pot at your own pace and still maximising the potential for growth in the future.

That’s because investing for five years or more increases your chances of positive returns compared to cash savings. But investments fall as well as rise in value, so there is a chance you could get back less than you put in.

Cost of living pressures are a very real issue in a time of stubborn higher interest rates and increased energy bills.

Building a savings pot can provide an important buffer for both unexpected and planned expenditures in the short term.

For those in work, we recommend three to six months’ worth of cash savings in emergency savings. And for those in retirement, one to three years’ worth to cover any unexpected costs.

Once you’ve done that, though, investing could be the next step to achieving your financial goals.

Compounding – growth over time

Not everyone has large lump sums available to invest.

Regular investing with a Direct Debit lets you put in what you can each month. Over time it could build up to something quite substantial.

Assuming a steady growth rate of 5% a year as an example, we’ve worked out how much a monthly investment could be worth in the future. However, this doesn’t consider investment charges, taxes, or inflation, so actual returns will look different to this.

Investing for beginners

Investing by Direct Debit provides a simpler way for those new to investing.

Setting aside money automatically makes it easier to get into good habits. You won’t forget to invest, because it happens at the same time every month.

You also don’t need to decide where to invest straight away. You could initially set up a Direct Debit into your account as cash and take the time to research the right investments for you using the Wealth Shortlist selected by our in house experts.

Or you can leave investing to the experts with HL’s Ready-Made Investment options. If you’re confident enough, you can also choose your own investments.

Regular investing means you won’t need expertise to know when the right moment might be for the markets, because your money will automatically be invested each month.

With a Direct Debit your money is taken from your bank account on the 7th of every month, or the next available working day.

Any money you instruct will be invested on the 10th day of the month or next available working day.

Although it’s automatic, you should still check in on your investments every now and then to make sure they’re right for your goals and attitude to risk.

Investing regularly to balance risk

Regular investing helps smooth the ups and downs of the market over time through something called pound-cost averaging.

By investing at many different times, you avoid the risk of investing all your money when the market is at its highest and investment prices are more expensive.