At times of such economic strife, people have less money to invest. This makes the investment decision all the more important – and that’s where Compare The Financial Markets comes in. In the following paragraphs we’ve assessed and researched some of the bond and fund investment options available in 2018.

Gilts and corporate bonds

Funds investing in gilts – bonds issued by the government – now stand at 4.4%, and are the best short-term performers in the unit trust world. UK corporate bond funds are riskier and have fared less well, although they are still up 0.6%. If deflation is forecast, gilts and bonds should prosper. But if it’s inflation, then it is best to avoid them.

The Post Office no longer sells gilts. The easiest way to invest is via a stockbroker, or through the government’s debt management office (dmo.gov.uk).

National Savings & Investments

These are the most solid, with a government-backed promise of 100% security. Direct Saver – minimum investment £1 – pays a taxable 2%. Fixed-Interest Savings Certificates lock you in for two or five years and pay 1.25% and 2.25%, but are tax free, working out up to 3.75% for higher-rate taxpayers. But, many financial advisers recommend Index-Linked Savings Certificates, guaranteeing your cash will grow in line with the Retail Prices Index, plus 1%. Available at the Post Office, they are tax-free with a minimum investment of £100. It’s important to remember, that, because inflation is currently 3.7%, it’s no guarantee you will receive interest anywhere near that figure. Someone investing today will receive the difference between the index figure at the time, and whatever it is in a year.

Fixed-rate savings bonds

Savers can find interest of up to 5% on long-term fixed rate bonds. Three-year bonds pay around 4% – both the Post Office and Lloyds Bank have a 4.1% three-year deal, while ICICI Bank, a UK subsidiary of an Indian bank, pays 4.25%. All are covered up to £50,000 by the Financial Services Compensation Scheme.

We understand the pitfalls and hurdles of investing your hard earned cash. We can help you make the best investment decision, suited to your financial circumstances.

Talk to the experts at Compare The Financial Markets.