Martin Lewis talks investing for beginners in first for his Money Show Live

TV star and money guru Martin Lewis used his ITV show to cover investing for beginners – with a blunt warning about cryptocurrency

Consumer champion Martin Lewis claimed Brits are “too risk adverse”, as he urged people to think about investing to make their money work harder.

For the first time, he used his ITV show to shine a spotlight on investing for beginners. Opening the Martin Lewis Money Show Live, the star said: “As a nation we are under investing. We are risk averse and that carries its own risk.

“If you put money into savings, even in the top paying savings over the last decade, they would have actually lost value as they have shrunk compared to inflation. So if you are putting away for the longer term and want more rapid growth, investing will often outperform savings.”

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The founder of Moneysavingexpert.com insisted his advice was for those who have never dabbled in investing before. And he added: “My aim is not to persuade you to invest. It is tool you up so you can decide for yourself if it is right and how best to do it.”

He claimed the tips on offer applied whether someone had £10 to a large lump sum. And he was keen to stress that, if people were considering doing so, they need to do so with their eyes open. “What you have to do is accept when you are investing is that it is always going to be uncertain, and you don’t have a crystal ball,” Mr Lewis told viewers.

He also was also keen to get across that investing should be done for the long term, and only when someone is secure financially and doesn’t have heavy debts they need to pay off. The show heard from James McManus, chief investment officer at JP Morgan Personal Investing, who said people should think of investing their money for a minimum of three to five years, and potentially as long as 20 or 30 years. “There is never a bad time to start investing,” he added.

Mr Lewis went back to basics by explaining what stocks and shares are, and how it means investors own part of a company, and can benefit from any rise in its share price and dividend. He also covered corporate and government bonds, which are essentially like an IOU.

But he also had blunt message for those wondering whether to put their money into individual companies as opposed to funds, which spread the risk. “I think very few beginners should be buying individual shares,” was his conclusion, adding that funds are a “basket of investments”.

The show also covered the difference between active and passive funds, the former involving fund managers who are paid to pick preferred stocks, whereas the latter tracks indexes such as the FTSE 100. To help viewers, Mr Lewis also showed a stark chart comparing how £1,000 put aside a decade ago in different ways would be worth now.

In a top paying savings account, it will be worth £1,270 now, and less than how much inflation has risen in that time, he said. But the same £1,000 put into a fund that tracked the mid-cap FTSE 250 would have grown to £1,640. At the extreme, investing the same amount in a fund that tracked the US S&P 500 index and it would have jumped to £3,790. The show also explored the big tax-free benefits of investing in a stocks and shares ISA.

However, Mr Lewis also warned about the ever present dangers of being duped by scammers who are only too quick to prey on those who are starting out on investing. Those crooks have even used images of Mr Lewis, and fake videos, as a despicable way to suck victims in.

And he also placed a big health warnings on those considering investing in cryptocurrencies, such as Bitcoin. “It is highly speculative and highly risky,” was his summing-up, adding that people should only do so if they can afford to lose the money.