Fed up getting less than 1% interest from your bank?

May 30, 2018

We are just about to run an advertising campaign in selected areas attempting to find people who are sitting with medium or large amounts of money in a bank or building society account, getting less than 1% interest on any balances.

One of our advisers recently invested £130,000 for a couple who were only getting around £650 a year interest on it. That’s only 0.5% per annum which is shocking.

The best way to get a half decent return is to invest the money. At this point, I don’t doubt a lot of people are now recoiling in horror at the word ‘invest’, and are imagining losing a lot of money in the process. Investing doesn’t need to be like that – there are a variety of funds and approaches which can be used.

There is one fund we use – a Defensive Managed Growth fund from a well-known fund manager – which concentrates on defensive growing. By that, we mean that it will take specific approaches for growth, but it also plans for losses at the same time, so it is not an out-and-out growth fund. On average, it aims for about 3-4% growth, which is relatively modest, but it will do whatever it can to avoid negatives, which it has managed to do for some time now.

As part of the MAP investment process, we choose consistent-performing funds and then divide them into risk category. There are three main categories we look at – Low Risk, Middle Risk and High Risk – and needless to say if someone is very nervous of risk at all, they should go for Low Risk. Now what this means in investment terms is that the chances of loss are low but please remember losses can still sometimes happen, even with the most care in picking what funds you wish.

Depending on how much money you have to invest, what we would do at MAP is use a number of funds, as this spreads the risk. Let’s say you had £50,000 to invest; we would use 10 funds in total, investing £5,000 per fund. Now in our Low Risk section, we have 36 funds we can use, and from this you can choose from interest-based type funds, global funds, income funds, UK equity funds and European funds, – so there are a number of areas we can choose to give yourself the biggest spread possible and so reduce risk as best we can.

Another thing we do to reduce risk and improve performance is look at the funds we use on a quarterly basis, because everything will change at some point, that’s for sure! If a fund isn’t doing too well, we look to replace it (with your permission) with a fund that is performing well.

There is no way to avoid risk at all when investing, but the MAP process looks at reducing it at every step:

  1. We only use consistent performing funds;
  2. We review all funds every three months;
  3. We always use a spread of funds for all clients; and
  4. We continually monitor our choice.

If you would like to find out about how Money Advice & Planning invests client money, please visit us at and use the contact form. Alternatively, call Andrew Singleton on 0345 241 1808.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.