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How to invest £1,000 – the best ways to invest your first £1,000

If you’ve got some unallocated money, say £1,000, for example, you’re thinking of investing it, and you’re totally new to investing, knowing where to start can be pretty tricky. However, help is at hand. This article has been written to give you some ideas on how to invest 1,000 pounds.

💸 Can I invest just £1000You absolutely can!
☝️ First thing to considerYour attitude toward risk
❓Some viable options to considerFunds
Peer to peer lending
Robo investment platforms
Stocks and shares
🔒 Can I invest my money without losing it?A component of risk is part of the process and can’t be taken out completely

Questions to consider before you invest £1,000

Before you go any further, you have to consider your attitude towards risk. You can save £1,000 with very little or no risk at all. However, if you decide to invest £1,000, risk comes into the equation. Therefore, the first thing is to understand the difference between saving and investing.

The difference between saving and investing

Saving and investing are similar. They both share the same goal: to help you accumulate money. But let’s consider both in their own right, starting with saving.

When you think about saving, you will probably think about bank products such as ordinary savings accounts or perhaps government-backed bonds like Premium Bonds issued by the NS&I. The risk associated with these types of products is virtually non-existent, so you might think it’s the best way to invest £1,000. However, there is a downside: the interest these types of savings earn.

If you’re considering saving or investing for the first time, you might not think that the interest your money can earn is of much importance. However, it is. You have to consider inflation.

If you tuck your £1,000 away into national saving bonds, it won’t earn any interest. Okay, it’s offset by the fact that you might win a money prize. However, the odds of doing so are quite enormous – 1 in 1,192,516,529 to win £10,000, and 1 in 57,837,067,198 to win the £1 million prize. The odds on even the lowest prize (£25) are high – 1 in 34,500.

You can put your money into an ordinary savings account with a High Street bank. However, it will only earn you a low rate of interest, typically around 0.7% per annum on an easy access savings account, or perhaps up to as much as 2.2% on the fixed-rate savings account.

But when you consider that inflation here in the UK is now running at 5.5%, in real terms, money in ordinary savings accounts is losing value. After one year, your £1,000 would be worth £1,022. But at the current inflation rate (and that is expected to rise even higher), after one year, £1,000 worth of purchases would cost £1,054, giving you a net loss of £34. Of course, the more money you save, and the higher the inflation rate, the more you will lose.

But if you invest 1,000 pounds into an Investment ISA, it could earn interest up to 13.55%. In other words, if you were to invest 1,000 in stocks and shares ISA, after one year, it could be worth £1,135.50 – considerably more than with a savings account. So okay, you might think it’s a no-brainer. But then, of course, there is that old devil risk to consider.

Is £1,000 enough to start investing?

£1,000 is more than enough if you’re thinking of investing. You could even start with less – say £500. But let’s stick with the original figure and think in terms of how to invest 1,000 pounds. What are your options?

How to choose smart £1,000 investments

Interest in investing has been gathering pace ever since the first Coronavirus lockdown. With more and more Brits wondering how to invest 1,000 pounds, let’s look at the possibilities. The options include:

If you’re lucky enough to be asking yourself how to invest 1,000 pounds per month, then a pension like a SIPPS has got to be a serious consideration. The initials SIPPS stand for Self Invested Personal Pension Schemes.

A SIPP is one of the best ways to invest £1,000 per month

SIPP schemes entered the mainstream here in the UK following the 2015 pension freedoms, which allowed people more control over their retirement savings. In 2020 it was estimated that people had invested £180 billion into approximately 2 million products. So it’s never too early to start squirrelling money away for your retirement – the more, the merrier.

If you invest 1,000 pounds into a SIPP every month, you will soon have a considerable nest egg for your twilight years. While such an investment is suitable for people who want to have all of their pensions in one pot, you will be responsible for managing your investment. Also, you will need to have the time, knowledge and confidence to go down this route?

Copy Trading  – The Best 1,000 Pounds Investment to Trade Passively?

If you don’t have the knowledge and confidence to be hands-on, you might be better off going down the Copy-Trading path. Copy -Trading mirrors the portfolio and trading of experienced investors. If you want to know how to invest £1,000 with minimal involvement, this is the way to go. There is little or no stress. It is your chosen trader who determines which assets are to be bought and sold.

If you are considering where to invest £1,000,  Copy-Trading is quite a good idea for beginners, and you can take a look at the day trading sites for a further explanation and some platform suggestions.

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Capital at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future.

Should You Invest £1,000 in Bitcoin?

Bitcoin is the world leader in cryptocurrencies and features regularly in financial news bulletins but not necessarily for the right reasons. While it has grown phenomenally since it was first launched, it has also suffered several severe depreciation.

In November 2021, 1 BTC was worth nearly $70,000. In January 2022, it fell to $35,000, but it rallied to around $45,000 in February. It is a seriously volatile investment and certainly not for the fainthearted. If you were to ask is Bitcoin the best place to invest £10,000, most wealth specialists would tell you a definite no – unless you are prepared to invest for the long term so you can ride out the many lows it will experience.

How Can I Invest 1,000 Pounds in the UK?

There are several ways on how to invest £1,000. They include things like Alphabet Shares, Gold, and Tech stocks. While many investors choose the FTSE100 as it is British, some investors choose the American S&P500. Some diversify by investing in both as it is a matter of preference. It provides one of the important risk-reducing factors with investing – diversification. Many investors choose this option when they are looking for the best place to invest £1,000.

How to Invest £1,000 in Stocks and Shares

Stocks and shares are one of the most popular investment vehicles. But if you want to invest in them actively, you need to understand how they work.

If you decide to be an active investor, once you’ve studied the basics, your next step on learning how to invest 1K in stocks and shares is to appoint a broker.

Brokers fit into two categories – full service and discount. The full-service type offers the full range of brokerage services, plus they provide financial advice regarding healthcare, retirement, amongst others. They usually act for high-value investors and charge considerable fees for their services. So it might be the best way to invest £10,000 if you consider yourself to be in this bracket.

However, if you consider yourself a more modest investor, the best way to invest 1K in stocks and shares is to choose a wealth specialist to work with – a company like Moneyfarm, for example.

Investment ISAs, also called Stocks and Shares ISAs, are among the most popular investment vehicles. As well as holding a number of different stocks and shares, some ISAs can hold ETFs (Exchange Traded Funds). For instance, you can take out an ISA that tracks the FTSE 100 or 250 or the US S&P 500. Others include the MSCI China ETF Tracker or a Global Clean Energy ETF Tracker.

Investing in Managed Funds

Another financial vehicle to consider when thinking of how to invest your first £1,000 is Managed Funds. Actively managed funds are investments in a particular sector, index, or geographical area. In this way, they are similar to ETFs. But the difference is that you will have a professional fund manager who will select the underlying holdings according to a specific investment strategy designed to outperform the benchmark for the particular market at which it is aimed.

Because you will be using the services of a professional fund manager, you will pay higher fees for Managed Fund Investments than if you were to choose a more passive vehicle like an ETF. Examples of managed funds include Investment Trusts, OEICs (Open Ended Investment Companies), and Unit Trusts.

Using Robo Advisors

A Robo adviser service could be the best place to invest £1,000 if you are comfortable with this type of service which relies on preset algorithms. Some Robo advice services are pretty much 100% automated, while others, such as those offered by Moneyfarm, offer Robo services with a human touch featuring three layers of human intervention built-in.

Food for Thought

If you are thinking about how to invest your first £1,000, I hope we’ve given you some good ideas. But whichever investment route you decide to go down, there will always be an element of risk involved. Investing over the long term and diversifying your portfolio are the best ways to reduce any risk, but you can never ignore it 100%.


What should I invest £1,000 in?

You can invest £1,000 in stocks and shares, cryptocurrencies, funds, peer to peer lending, robo-advisory platforms, and SIPPs.

How can I invest 1,000 and make money fast?

There is no fast way to make money when investing £1,000. However, you can make good returns while investing and lose money from your investments.

How do beginners invest?

Most beginners invest in ETFs, index funds and SIPPs instead of individual stocks. They also use investment apps and robo-advisors due to limited financial knowledge.

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Capital at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future.

*Capital at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future.