If you’re looking for safe investments that offer attractive returns, the UK market offers several compelling options that balance security and profitability. For example, in 2022 alone, UK property investments yielded an average return of 10.3%, outpacing inflation and traditional savings accounts.
From buy-to-let properties in emerging urban centres to fixed-rate bonds, you’ll find diverse opportunities to suit your investment goals. This article explores the top five safe investments with high returns in the UK, providing you with the knowledge to make informed decisions and potentially secure your financial future.
Top 5 Safest Investments With the Highest Returns for Beginners
Finding the perfect balance between safety and high returns can be challenging, especially for beginner investors. However, there are some top expert picks to consider. Let’s explore the top five safe investments with high returns in the UK that are suitable for those just starting their investment journey.
1. Buy-to-Let Property Investment
Buy-to-let property investment is a compelling option if you need a tangible asset with the potential for both capital appreciation and rental income. According to a report that analysed prices over 25 years, property investments have historically provided returns of about 12.6% annually, making them an attractive option for those looking to build long-term wealth. When executed strategically, they can be one of the safest investments with high returns in the UK.
While our 25-point property investment checklist can help you get started with buy-to-let investment, working with property investment experts like Baron & Cabot can significantly enhance your chances of success in this area. By leveraging our extensive market knowledge and robust due diligence process, we help investors identify prime locations and properties that offer the best potential for returns. Our team’s expertise ensures that you’re making informed decisions to help mitigate risks associated with property investment.
2. Government-Issued Bonds
Government-issued bonds (gilts) are among the best safe investments with high returns for UK investors who need to preserve their capital. These financial instruments are backed by the full faith and credit of the UK government, making them virtually risk-free.
Recent projections suggest that government bonds could offer annualised returns of around 4.4% to 5.4% over the next 10 years. While these returns may not be as high as those of buy-to-let property developments, they provide a stable and predictable income stream, making them an excellent choice for conservative investors or those nearing retirement.
3. Certificates of Deposit (CDs)
Certificates of deposit (CDs) offer another haven for your money while providing fixed-rate returns over a set period. These financial products are typically offered by banks and building societies, and they’re protected by the Financial Services Compensation Scheme (FSCS), up to £85,000 per person and per institution.
CDs can be an excellent option for those wondering where to invest money to get good returns for beginners. They offer higher interest rates than traditional savings accounts, with the trade-off being that your money is locked away for a fixed term. According to financial experts, CDs can offer interest rates significantly higher than standard savings accounts, making them an attractive option for short to medium-term investing.
4. High-Yield Savings Accounts
If you want liquidity alongside safety as an investor, high-yield savings accounts are an appealing option. These accounts offer safe investments with high returns compared to traditional savings accounts while still providing easy access to your funds.
Some high-yield savings accounts offer interest rates of up to 8%, which is higher than traditional banks. While this may not seem high compared to other investment options like buy-to-let developments, it’s important to remember that these accounts offer unparalleled liquidity and are protected by the FSCS up to £85,000.
High-yield savings accounts are particularly suitable for emergency funds or short-term savings goals, as they provide a secure place to store your money while earning some interest. Unlike other investment options, there’s no risk of losing your principal, making them ideal for conservative investors or those who prioritise capital preservation.
5. Stocks and Shares ISA
Stocks and shares ISAs (Individual Savings Accounts) can boost your returns while maintaining a relatively safe investment profile. These individual savings accounts offer a tax-efficient means of investing in a range of assets, including stocks, bonds, and funds.
Index funds, which are often included in stocks and shares ISAs, offer easy diversification and low fees. This makes them an excellent choice for investors seeking a balance between safety and growth potential.
Key benefits of the stock market and shares ISAs include:
- Tax-free returns on investments up to the annual ISA allowance
- Flexibility to choose from a wide range of investments
- Potential for higher returns compared to cash ISAs or savings accounts
While stocks and shares ISAs do carry some market risk, you can structure your investment to align with your risk tolerance. By focusing on low-risk assets within your ISA, such as blue-chip stocks or government bonds, you can create relatively safe investments with high returns in the UK. If you’re wondering whether to invest in property or shares, check out our recently published guide for their respective pros and cons.
With that said, you need a good strategy to get the most out of your investment portfolio. This means paying attention to certain factors and considerations when putting together your investment strategy, as we’ll see below.
How to Choose the Right Safe Investment Strategy for Your Goals
Choosing the right investment strategy is crucial for achieving your financial goals while managing risk effectively. There are various safe investments with high returns available in the UK, but selecting the most suitable option requires careful consideration. Let’s explore how to develop an investment strategy tailored to your unique circumstances.
1. Assess Your Financial Situation and Goals
Before engaging in any investment, it’s essential to draw a personal financial roadmap. Start by evaluating your current financial situation, including your income, expenses, and existing assets. Then, define your short-term and long-term financial goals/objectives: Are you saving for retirement or a down payment on a house?
Understanding your objectives will help you determine the best place to invest money without risk while still working towards your aspirations.
Next, consider your risk tolerance—a measure of how much you’re willing to endure variations in your investments’ value. Your risk tolerance is influenced by factors such as your income stability, level of comfort with market volatility, and age. Overall, while younger investors are willing to take on more risk, those close to retirement age tend to lean towards more conservative strategies to preserve capital.
2. Diversify Your Investment Portfolio
One crucial principle for minimising investment risk is diversification. By distributing your investments over various sectors, asset classes, and geographic regions, you can help protect against significant losses and potentially enhance returns.
When considering safe investments with high returns in the UK, look beyond a single asset class.
A well-diversified portfolio might include a mix of:
- Buy-to-let property developments
- Government bonds (gilts)
- Corporate bonds
- Dividend-paying stocks
- Real estate investment trusts (REITs)
- Cash savings accounts or money market funds
The goal is to find a balance that aligns with your risk tolerance and financial objectives.
3. Evaluate Potential Returns, Risks, and Liquidity
For each investment option, carefully assess the potential returns, associated risks, and liquidity. While the goal is to find the safest investment with the highest return, it’s important to understand that higher returns often come with increased risk.
Investment strategies can range from conservative (focused on wealth protection) to highly aggressive (seeking rapid growth through capital appreciation). Your choice should reflect your circumstances and goals.
Consider the following factors for each investment:
- Historical performance and projected returns
- Volatility and potential for loss
- How quickly you can access your funds if needed (liquidity)
- Income tax efficiency
- Fees and transaction costs
4. Focus on Low to Medium Risk Funds
It’s important to understand that all investments carry some level of risk. However, you can minimise this risk by focusing on low to medium-risk funds.
These typically include:
- Index funds that track broad market indices
- Balanced mutual funds that combine stocks and bonds
- Blue-chip dividend stocks from established companies
These options often provide a good balance between growth potential and stability, making them suitable for many investors looking for safer asset classes.
Location is also crucial, especially for landed properties like buy-to-let and real estate investments. In the UK, some of the best places to invest money without risk include Manchester and . These cities have shown steady growth in property values and rental demand, driven by thriving economies, growing populations, and strong infrastructure development.
Contact us at Baron & Cabot to learn more about safe property investment options.
Frequently Asked Questions
What is the safest investment with the highest return?
If you need a balance between safety and returns, UK government and corporate bonds are notable options. These bonds are expected to yield annualised returns of about 4.4% to 5.4% over the next decade, providing a relatively stable, low-risk investment choice.
Additionally, buy-to-let property investment is worth considering, as it can potentially offer significant returns. To optimise your investment in this area, collaborating with property investment experts is advised. These professionals can guide you through selecting prime locations and safe property investment strategies to maximise your returns while managing risks effectively.
How much do I need to invest to make £1,000 a month in the UK?
You need to invest approximately £172,000 to achieve a passive income target of £1,000 per month. This sum can be invested either as a one-time lump sum or accumulated gradually over time through regular contributions.
When seeking where to invest money to get monthly income, the goal is to create a portfolio that generates a steady income stream capable of meeting your monthly financial target. It’s essential to consider the types of investments that will yield sufficient returns to meet this objective, taking into account your risk tolerance and investment timeline.
Which investments have the best returns in the UK?
Several high-return investment opportunities exist in the UK. These include buy-to-let property developments, stocks, exchange-traded funds (ETFs), bonds, high-yield investment funds and savings accounts, self-invested personal pensions, and.
Stocks, while riskier, offer the chance for substantial growth and are a popular choice for those willing to accept some volatility. High-yield savings accounts and bonds provide more stability, albeit with potentially lower returns compared to an investment vehicle like stock. Buy-to-let property developments remain a favoured option for many investors due to their tangible nature and the potential for both rental income and appreciation.
Where should I put £20K in savings in the UK?
With £20,000 in savings, there are various investment strategies you can pursue based on your financial goals and risk appetite. Options include investing through a robo-advisor, contributing to a pension plan, opening an Individual Savings Account (ISA), or exploring peer-to-peer lending platforms.
Each choice offers distinct advantages and risks, so it’s crucial to align your decision with your long-term financial plans. A diversified portfolio, which spreads risk across different asset classes, is often recommended to enhance potential returns while ensuring minimal risks.
How to get a 10% return on investment?
Aiming for a 10% return on investment requires a strategic approach. One potential method is buy-to-let property investments, which can yield high returns if managed correctly.
Success in this field often hinges on selecting the right properties and locations, a task best guided by property investment experts. These professionals can provide valuable insights into market trends and help you develop a robust investment strategy that aligns with your financial objectives and risk tolerance.
Conclusion
To get the most out of these 5 safe investments with high returns in the UK, always prioritise diversification to mitigate risk. By spreading your capital across multiple options like buy-to-let, stocks and shares ISAs, and high-yield savings accounts, you can potentially maximise returns while maintaining a balanced portfolio.
While the UK market offers numerous opportunities for those seeking safe investments with attractive yields, it’s advised to conduct thorough research and consult with financial professionals and
before making investment decisions. By staying informed about market trends and economic factors, you can make strategic choices to grow your wealth over time.
Disclaimer: Any information provided by Baron & Cabot does not constitute financial advice and is for educational purposes only.
