The best ways to invest £30k

If you’ve saved or inherited £30k, there are a wide range of investments you could make, from stocks and shares to property.

But which form of investment is right for you?

We take a look at the best ways to invest 30k below.

What are your investment goals?

Whether you have £30k or a much smaller amount, there’s no one-size-fits-all approach to investing.

Ultimately, what you should do with your money all comes down to what your investment objectives are, how comfortable you are taking risks, and whether you’re investing for the long or short term. 

The investments you make will carry different levels of risk and return.

So, depending on your goals and circumstances, you may be better suited to investing in certain assets than others.  

Before investing any money, ask yourself what your financial objectives are.

Are you looking to retire early or do you want to buy a new home for your family? Based on this, it’s time to start exploring some of the different ways you can use your £30k.  

Pay off your outstanding debts

Sometimes one of the best ways to use your money is to pay off your existing debts, particularly ones with high interest rates.

Outstanding debts can be a drag on your finances and can nullify profits that you could make through your investments.

Clearing your debts can also be good for your credit score, leaving you in a healthier financial position going forward. 

Build an emergency savings fund

Investing can carry risks – there's often no guarantee that you’ll get back what you’ve paid in.

For that reason, it’s a good idea to set aside a portion of your £30k as an emergency fund.

This way, regardless of the performance of your other investments, you’ll still have money to fall back on. 

Cash savings

If you would rather not invest your money at all, you could opt instead to open a cash savings account.

When deposited in these accounts, your savings will earn compounding interest.

And if you’ve deposited £30k into a savings account, you will quickly start to grow your pool of funds.  

However, interest rates offered on these accounts are usually quite low, so you shouldn’t use a savings account to achieve short-term financial goals or to quickly grow your funds.

And should inflation rise above the interest rate of your savings account, the value of your money can even be negatively impacted.  

Consider using tax-free wrappers

Whether you’re saving or investing, you should consider using a tax-free wrapper to protect your money and invest your £30k for the future.

Some of the most popular tax wrappers are ISAs, which according to the 2022/23 allowance, let you deposit £20,000 of tax-free money.

There are four main ISAs for adults, and these are: 

• Stocks and shares ISA: invest in financial products through a stocks and shares ISA, and any interest, profits and dividends you receive will be tax free. 

• Cash ISA: deposit cash savings into a cash ISA and the interest you earn on your savings will be tax free. 
• Lifetime ISA: these let you save up to £4,000 a year towards your first home or retirement. The big draw is that the government provides a 25 per cent boost on what you pay in each year, up to a maximum of £1,000. 
• Innovative Finance ISA: These accounts contain peer-to-peer loans that can be given to parties seeking financing. The tax you earn on your investment in another party will be tax free. 

While pensions are different from ISAs, they also offer a tax-efficient way of investing your money.

When you contribute to a workplace or Self-Invested Personal Pension (SIPP), you receive income tax relief at your marginal rate of tax – in other words, the top rate you pay.

Furthermore, any growth and dividends within the pension are also free from tax, which can help you reach your financial goals more quickly.  

Investing in stocks and shares

Investing in stocks and shares is a popular way to grow your £30k of savings over a period of time.

When you buy stocks or shares in a business, you are buying a share of that business’ performance.

Should the business perform well, you can be entitled to a share of the business’ profits.

However, the reverse applies if a business underperforms. And as you can end up with less money than you started with, stocks and shares are a higher risk investment.   

You can start investing in stocks and shares through a variety of different platforms and trading apps.

Most online platforms will let you invest through two main methods: picking and choosing your own stocks and shares, otherwise known as DIY investing, or putting your money into a fund of pre-selected shares.

For investors new to stocks and shares, investing into pre-selected funds is likely a good idea.

These funds are invested into a wide range of different stocks and shares, meaning that one business underperforming won’t lead to significant losses on its own.  

Invest in property

Buying property has long been considered one of the best ways to invest for the future.

With house and rent prices rising sharply for many years, buying property can be a good hedge against rising inflation and can see you earn much larger returns on your investment in the future.  

There are a few different ways of investing in property.

You could decide to buy a property in need of refurbishment to sell on for greater profits in the future. Or you may choose to buy a property to rent out over the long term.

However you choose to do it, investing in property is an attractive way to grow your money for the future.  

There are many ways to invest £30k, and you should always keep your own financial goals in mind, whatever you choose to do.

If you need more advice on how to invest £30k, speaking to a financial adviser can help.

Find the right adviser for you on Unbiased.

See Also:

• The best ways to invest £10k
• The best ways to invest £100k
• The best ways to invest 200k
• The best ways to invest 5k
• The best ways to invest 1k
• The best ways to invest 20k
• The best ways to invest 25k