INVESTING isn’t just for those with super yachts and sports cars – anyone can do it, and the key is to start early so your money can grow.
It’s never been easier to invest – but knowing where to begin can be daunting. Here, we show you how to start making money quickly with the seven best platforms for beginner investors.
1
When choosing an app, it is important to consider factors including whether the fees are prohibitive, how easy it is to use and the range of investments available.
Some apps let you choose individual companies to invest in, while others have a range of ready-made portfolios so you can take a more hands-off approach.
Whichever app you choose, the most important thing is to make sure it is regulated by the Financial Conduct Authority and a member of the Financial Services Compensation Scheme (FSCS), which protects your money if the firm goes bust.
When opening an account, a stocks and shares ISA (Individual Savings Account) is usually the best option. You can invest up to £20,000 a year this way and any profits you make will be tax-free.
You can start with as little as £1 – but the returns you make will depend on how much you invest and where.
For example, if you picked a low-risk ready-made fund, called a “cautious” fund, and invested £10-a-month into it, over 20 years, you would grow your pot to £3,291, assuming a 3% investment growth per year.
This is due to the wonder that is compound interest which is when you earn interest on your original investment as well as on the accumulated interest you’ve already earned.
Cautious funds put less money into the stock market and more into things like government bonds and gold, which are seen as safer options.
But if you’re happy to take on more risk, then you could pick an “adventurous” fund, which means a much bigger proportion of your money is held in the stock market.
A £10-a-month investment over 20 years would grow your pot to £5,929 in 20 years. If you saved £20-a-month, that would be £11,859 – a handy nest egg.
Before you start investing, experts say you should have a minimum of six months’ of wages in a savings account before you start and only invest money you can afford to lose.
We’ve looked at some of the most popular choices. Do bear in mind that the best one for you will depend on your own situation; below, we’ve ranked the apps in order of which we like the most.
1. Wealthify
This app talks a lot about keeping things simple, which is great for anyone put off investing by all the unnecessary jargon.
You can open an ISA on this app with just £1 and start a pension with £50.
There are five risk levels to choose from – cautious, tentative, confident, ambitious and adventurous – and for each one there is a ready-made investment portfolio that holds a mix of assets including company shares, government bonds and property.
For those wanting to learn more about how their fund is invested, the outlook page has an overview of how Wealthify thinks various different regions and assets will perform over the coming months.
Fees are 0.6% a year, plus the cost of your investment, which is 0.16% for a standard portfolio or 0.7% for the ethical option. So investing £1,000 in the standard option would cost about £7.60 a year.
- Pros: We like the focus on keeping things jargon-free, plus you can start with just £1
- Cons: Limited range of investment options is good for newbies, but may be limiting for those who are more confident
2. Dodl
With Dodl you can set up a direct debit from £25-a-month, or invest a lump sum starting from £100.
This platform has a range of ready-made funds, labelled according to different risk levels, or you can choose individual shares to invest in.
Another option is to invest by theme. If there is a particular investment trend you are interested in, Dodl will direct you to a fund that taps into it.
For example, the “global climbers” theme is all about growing companies in developing countries such as China and India, while the “robo revolution” theme is about investing in robotics and AI companies.
Fees are 0.15% a year, with a minimum of £1 a month, plus the cost of your investments, which is 0.31% for the ready-made portfolios.
So, for a £1,000 investment you’d pay £15.10 a year because of the minimum charges, and for a £10,000 investment you’d pay £46.
- Pros: Run by the big wealth manager AJ Bell. Pays interest of 4.32% on any cash not yet invested
- Cons: Quite expensive for those with a small amount to invest
Be aware of risk
IF you have enough cash savings to invest – then the returns are impressive.
On average, since 1899, the stock market has delivered an average return of 4.8% a year, compared to an average of 0.5% if you kept your money in cash savings, according to Barclays.
That means if you had put £100 in the stock market in 1899 it would be worth £31,888 in real terms today, while the same amount put in cash would be worth just £190.
But as we have seen recently, the stock market can also fall.
In April, the American stock market saw its biggest drop since the start of the Covid pandemic after US President Donald Trump announced plans to introduce punitive tariffs on goods imported to the US from other countries.
The UK’s own stock market, the FTSE 100, fell by more than 10 per cent after the news.
This is only actually a problem if you need to access your money but if you’ve got a long-term savings goal then the market will usually bounce back.
Ups and downs in the market are called “volatility”, but the idea is that over the long-term you can ride out these bumps and your money will grow, although it can feel uncomfortable at the time.
That means it is crucial that anyone considering investing is willing to tie their money up for a minimum of five years, as this gives your investments time to recover from any dips.
You do need to be prepared to lose it all.
Ideally you should have a pot of cash savings before you start investing. This should be at least three months’ salary.
3. Nutmeg
Nutmeg has been around since 2012 and was one of the first ready-made investment apps to hit the market.
Simply answer some questions to see how much risk you feel comfortable taking and it will then direct you to a ready-made investment portfolio.
There are 10 risk levels to choose from. These vary from 1 for the lowest risk and up to 10 for the highest risk plans.
It costs 0.65% a year to invest, which is £6.50 a year if you invest £1,000, or you can pay more for a managed service, where an expert monitors the investments more regularly, and that costs 0.98% (£9.80 a year for £1,000).
The managed service may be good for those who want peace of mind that someone will adjust their investments if the stock market dips or something changes, for example, when Trump announced his tariffs this year and certain markets crashed.
Nutmeg also offers a range of tools that can help with your personal finances, such as tax calculators, as well as guides on topics such as inflation – handy for those wishing to further build their knowledge.
- Pros: Plenty of resources to help with your wider personal finances
- Cons: You need to invest at least £100 to open a Lifetime ISA, or £500 for an ISA
4. Moneyfarm
Moneyfarm is a popular option, with more than 160,000 active users, you’ll need a minimum investment of £500 to get started – so it’s not for those who want to dip their toe in and invest a little.
There are seven options for its managed funds, which are created according to different risk levels and then managed by Moneyfarm’s investment team so you don’t need to do it yourself. These are 1 for the lowest risk and 7 at the high-risk end.
We like that it’s easy to see a breakdown of how each portfolio is invested across different assets, regions and sectors, with a simple explanation of each investment for those who want to know more.
The estimated cost is 0.66% a year, which is about £6.60 on £1,000 invested. There is a cheaper “fixed allocation” option, which charges 0.32% but means an expert won’t be monitoring your portfolio, so it’s probably worth paying the extra.
- Pros: Easy-to-understand explanations of the investments
- Cons: High minimum investment
5. Moneybox
Moneybox lets you open an account with as little as £1, so it’s good for anyone just starting out.
The options are easy to understand, with three main choices of ready-made portfolios: cautious, balanced, and adventurous.
More confident investors can access a wider range of investments such as US stocks and funds that track specific trends like clean energy and artificial intelligence.
The round-ups feature is very nifty. This lets you link your bank account or credit card to the app and then rounds up your spending and invests the difference, which can help boost how much you invest without you really noticing.
It costs £1 a month for a subscription fee, plus a 0.45% platform fee and the cost of your investments, which is usually 0.17%. If you had £1,000 invested, you would pay about £18.20 a year.
- Pros: An easy-to-understand investment range and a nifty round-ups feature
- Cons: The most expensive option in this list. If you want to invest in individual stocks, currently only US ones are available
My top three investing tips for beginners
BRIAN Byrnes, head of personal finance at Moneybox, shares his top tips…
- Set a goal: Whether it’s buying a home, retiring early or simply building your wealth – set a target and a timeline for how long you expect to take to reach your goal. Try to dedicate 30 minutes a week to learning about investing topics like stock market trends and compound interest as this will help you feel more confident.
- Keep costs – and risks – low: Consider lower-risk options like index funds, which track a certain stock market like the FTSE 100 or S&P 500. These are often cheaper than other investments and are diversified because they invest in hundreds of companies, which helps to reduce your risk. Investing small amounts every month will help you to stay consistent.
- Use an ISA: Every adult can save £20,000 a year into an ISA and all the gains you make are completely tax-free. If you are saving for your first home, consider a Lifetime ISA – you can save up to £4,000 a year in these accounts and get a 25% bonus from the government. Not having to pay tax on your gains helps to accelerate your growth.
6. Trading 212
This one is for people who feel comfortable choosing their own investments, so probably not for complete newbies.
There are no ready-made portfolios, instead you can either choose individual shares or exchange-traded funds (ETFs).
The app gets a lot of praise for how easy it is to use and for its low fees. It also says you can get started with just £1.
Trading 212 says it charges no monthly account fee and no commission for buying or selling shares or ETFs.
It said someone investing £50 a month would pay nothing. However, there are foreign exchange fees if you invest in non-sterling assets, for example, if you buy shares in an American company.
These fees can be really complicated to understand, so there is a risk that you could be stung with a surprise bill.
The firm also pays a competitive savings rate of 4.05% on any money in your account that is not yet invested.
- Pros: Easy to use. Competitive savings rate on money that’s not invested
- Cons: Not for complete beginners. We found it quite difficult to understand the fee structure from the website
7. Invest Engine
Invest Engine focuses on so-called exchange-traded funds (ETFs), which sound complicated but are actually just a type of low-cost fund that follow a certain index which is a ready-made basket of asset.
Examples of indexes include the UK stock market (the FTSE 100), the US stock market (S&P 500) or the gold price.
But with more than 800 different ETFs to choose from on the site, new investors might find this one a little overwhelming.
There is also a “managed” option where you can answer a questionnaire about your risk appetite and get directed to a suitable portfolio.
The DIY option has no account fee, while for the managed option you’ll pay 0.25%. For both, you will also pay for the cost of the funds you invest in.
The minimum investment level is £100 for a lump-sum or a £50 monthly direct debit.
Investing £1,000 in its managed option would cost £5 a year.
- Pros: A very low cost option – but we found it quite hard to understand the costs from the website
- Cons: The vast range of funds available may be daunting for those who have not invested before
‘My £10-a-week investment has grown to £15k’
ANDREW Porter opened an account with Moneybox in 2016 after seeing adverts about its round-ups feature.
This is where your spending is rounded up and the difference is invested – so if you bought something for £1.74, it would be rounded to £2, with 26p invested.
“I hadn’t seen a company offering that before. I thought the idea that a little bit of your spending gets saved was great – it means you’re constantly saving without really feeling it,” says Andrew, 50.
“I didn’t feel well off enough to put away big chunks of money every month so this appealed to me.”
Andrew, 50, who is a self-employed contractor and lives in Hove, started with a cash savings account and later opened a stocks and shares Isa, choosing the ethical investment option, which means your money is invested in line with certain criteria, for example avoiding polluting companies or those involved in arms or tobacco.
He has a weekly £10 direct debit and adds more when he can afford it. The round-ups feature adds another £50 a month on average. After eight years he now has about £15,000.
Andrew has recently moved his money to a Cash Isa as he may want to access it soon and is nervous about ups and downs on the stock market.
“I can’t afford to lose much and I wanted to feel like my money was protected. I hope to be able to use my savings to buy a small house in France one day,” he says.