How to start investing with just £100 a month
If you are starting your investment journey and finding it confusing, you are not alone.
Beginner investors who use the Boring Money Isa Finder tool tend to be under 45, looking to start with less than £5,000. They also report low confidence in taking the first step, rating their confidence in investing at 2.7 out of five.
This lower confidence also drives a strong preference for opting to choose an expert to make many investment decisions on your behalf.
The good news is that more “ready-made” investment choices are available than ever, many of which are perfect for beginners.
These options are credible, often delivered through apps and come with fair fees, so you don’t have to compromise on returns.
You don’t need much money to get started, and you can still make meaningful returns. If you started with £1,000 and invested £100 a month for 10 years, you’d have paid in £13,000 in total.
Based on the rate of return we’ve modelled, a global basket of shares could have grown to around £22,158. By comparison, the same £1,000 plus £100 a month held in cash would have grown to around £14,939.
Of course, investment returns aren’t guaranteed, and your money can fall as well as rise, but it illustrates the potential impact of investing over the longer term.
If you’re ready to take the first step, here are some beginner-friendly providers to consider.
The ‘ready-made’ options
Beyond simplicity, younger investors say they value competitive fees, provider reputation, strong customer reviews and a user-friendly app or website.
Performance also matters. At Boring Money, we have tracked the performance of major providers for five years.
The top performers in “high-risk” portfolios, suitable for longer timeframes of 10 years or more, have been Vanguard, Quilter Invest, AJ Bell, JPMorgan Personal Investing (JPM PI) and Aviva.
All of these providers are established and well-reviewed, so when choosing one, consider five-year performance as well as other factors such as reputation and trust.
If you’re in the majority and want a simple, ready-made option, my top three suggestions are JPM PI, Vanguard and Monzo.
JPM PI offers a wide range of ready-made options, asks useful risk questions when you open an account, and sits within a large global brand.
Vanguard, meanwhile, is a solid, reliable platform with popular managed products and a good onboarding risk questionnaire.
Monzo is the simplest of the three, with good beginner guides, no minimum contributions, low fees and an easy entry point if you’re already a Monzo banking customer using its app.
The halfway houses
If you’re one of the four in 10 beginners who want a blend of ready-made options with some of your own choices, I would look at AJ Bell, Aviva or Moneyfarm.
AJ Bell is a reliable all-rounder with a solid in-house set of ready-made portfolios, an excellent range of shares and bonds and a wide range of content and investment education. Regular investing is now free too, encouraging small, often monthly, direct debits, which can be a great way to get started.
Aviva offers credible, ready-made solutions with strong long-term performance, plus tools and education on saving and investing, and the reassurance of a large, well-known brand.
Finally, Moneyfarm is best known for its ready-made portfolios, but it also offers access to a wider range of investments, making it a good fit for intermediate investors who want more flexibility as they move towards DIY. Customers with more than £10,000 invested also receive access to its investment consultant team.
Where to pick and choose your own
If you’re one of the minority of beginners who want to choose your own investments and learn as you go, I recommend Barclays, Hargreaves Lansdown and Trading 212.
Barclays is very low-cost, offers a wide range of investments, and provides free regular investing, backed by the reassurance of a large, well-known bank.
Trading 212 offers free admin and no trading fees, a strong portfolio display, AI tools, a slick user experience, and plenty of choice to access shares from around the globe. It’s popular with beginners, but it lacks the support of some other brands and offers only shares, not funds.
And finally, Hargreaves Lansdown is the UK’s biggest DIY broker. It’s not the cheapest, but it is decent value for smaller accounts. This premium provider offers strong service and investing content, giving customers access to research and support.