There are seven main different kinds of investments that can be made in the UK; these are ISAs, Investment Trusts, Unit Trusts, OEICs, Endowment Policies, Investment Bonds and Annuities.

Individual Savings Accounts (ISAs)

This allows you to set up an account and invest up to £7,000 per year tax-free. It is linked to the stock market and open to all UK residents over 18 years old. The money that you invest will grow depending on the performance of the stock market, however you can decide if you want a high-risk or low-risk investment strategy.

Investment Trusts

Unit Trusts

A unit trust is a fund of lots of different investors, who pool their money together to invest in a wide range of different shares; this allows them to reduce their risks.

It is much cheaper than investing in a broad selection of shares by yourself and is managed by professional fund managers who are employed to look after your money. Once again you can choose what type of unit trust you like to suit the level of risk that you want to be exposed to, with higher risks promising potentially higher returns.

Any income from a unit trust is liable to income tax.

Open ended investment companies (OEICs)

These are somewhere in the middle between Investment Trusts and Unit Trusts, and are more commonly used in Europe.
You invest in the OEIC, which then creates shares for your investment, unlike an investment trust that has a fixed number of shares; you are then linked to the performance of the company. They are intended as medium to long term investments and can go down as well as up.

Endowment Policy

This is a life assurance and savings policy that you agree for a fixed period, usually a 10 year minimum.

When you reach the end of your agreed period, known as reaching ‘maturity’ you are then paid a lump sum of money.
You can sell the policy if you want to get out early, but remember that this will involve you paying financial penalties.

Investment Bonds

These are lump sum (single premium) investments, the money is used to buy shares in a selected fund, which like other investments can be decided based on how high or low you want your exposure to risk to be.

Annuities

This is where you pay an insurance company a set amount of money (or ‘lump sum’) and they then pay you a guaranteed income in return, either for an agreed period of time or for the rest of your life.

There are many different ways to invest your money, and how you do it will ultimately depend on your own personal preferences. The best thing to do is to speak to an IFA (independent financial adviser) by contacting the Financial Services Authority.

By John Hillman

USEFUL WORDS

invest money = to buy property, shares in a company etc. in the hope of making a profit
short- / medium- / long-term investment = investing money for a short, medium or long time
set up an account = to open an account
income tax = money that you pay to the government according to the amount of money you make on your investments
tax-free = you don’t have to pay any tax
buy/sell stocks & shares = buying/selling a small part of a company in order to make money
pool money = to collect money from different people so it can be used/invested by all of them
lump sum = an amount of money that is paid at one time and not on separate occasions
risk = the possibility of something bad happening at some time in the future
be liable to/for something = be legally responsible for paying the cost of something
maturity = the time when money you have invested is ready to be paid

ENGLISH GRAMMAR

Finite & Non-Finite Clauses

A non-finite clause has an infinitive, a gerund or a participle:
He decided to invest some money
He regrets now having invested in stocks & shares
Finding a good advisor, he decided to invest in the company

Non-finite verb forms often have no subject, but they can sometimes have one:
The lump sum having been paid, he was able to buy a new house

Compare the verbs in these finite clauses:
He decided that he would invest some money
He regrets now that he invested in stocks & shares
When he found a good advisor, he decided to invest in the company

A finite clause can be the main clause or a sub-clause.  A finite verb has a subject e.g. (he found, he decided), although it is sometimes left out after and and or.