Investment planning - the basics

Investment planning - the basics

Saving and investing is about putting plans in place for your long-term goals while making sure you have enough money set aside to cover regular expenses and emergencies.

You also have to understand how to balance taking risks with your money against giving it the best chance to grow.

Basic savings

The first step is to put aside a comfortable amount of savings, for example three months' take-home pay, for unexpected events or planned expenses.

A bank or building society account may be a good home for this money, or you could open up an easy access Cash ISA (Individual Savings Account).

Cash ISAs

You can save up to £15,000 into a cash ISA this tax year and £15,240 for the tax year 2015/2016. The advantage is, interest your money earns in a cash ISA is tax-free.

Ready to invest

When you have enough easy access savings set aside, it may be time to think about investing your money over the longer term, say 5-10 years, or more, with the aim of growing it more quickly.

Why invest?

Buying other assets such as: company stocks and shares, government and corporate bonds, or commercial property has historically given better returns than money in the bank. Although there is no guarantee of this in the future.

Stocks and Shares ISA

One of the easiest ways to start investing is with a Stocks and Shares ISA. You can invest up to £15,000 in ISAs such as the Prudential ISA. The £15,000 is the overall limit (£15,240 for tax year 2015/2016) which can be split however you wish between Cash and Stock and Shares ISAs. A stocks and shares ISA is like a basket which holds your investments and shelters them from tax.

The value of an investment can go down as well as up and the value in the future may be less than the amount invested.


A fund is when investors pool their money together to buy a range of investments. There are funds for every kind of investment: company shares, foreign companies, government bonds, commercial property and so on. Choosing funds to put into your ISA is usually a good choice for a first investment. You can normally move your money within funds without taking it out of your ISA and losing the tax advantages.

Balance the risk

It's often a good idea to put your money into different types of assets so you can balance the risk. If one doesn't perform well, another may do better. Or you can choose a fund which does this kind of balancing for you.

Our range

We're confident that we can offer a wide range of investment products to suit most customers. Please speak to a Financial Adviser for more information.

Other investments

If your ISA is full for the year. Here are some other investment ideas:

  • Corporate and government bonds - these are loans to the government or private companies that pay you interest.
  • Investment Bonds - these are products which invest your money and provide you with medium to long term returns. Read more.
  • Open ended investment companies - these also invest your money in other funds and assets. Read more.
  • Property - you can invest in rental properties, commercial properties or holiday homes.
  • Shares - direct investment in individual companies. Here you take a stake in the company and if it does well you may get a dividend, which is a share in the profits. The value of your share may rise or fall depending on many things including how well the company has performed. Read more about investing in stocks and shares.


If you're not sure what kind of investment would suit you best, speak to a financial adviser.

Be aware you may be charged for financial advice.

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