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How does investing in stocks and shares work?

At OneFamily, we believe everyone should have the same access to different ways to grow their money as everyone else.

When investing feels overly complicated, it can be off-putting for people who haven’t been taught about finance. That causes some members of society, especially young people, to be excluded from opportunities to make their money work harder.

What is investing?

If your children’s savings account, such as a junior ISA or Child Trust Fund, is coming up to maturity, you might be considering keeping some of your money saved for the future.

If so, you could choose to either save or invest your money. Broadly speaking saving means putting your money into an account that grows by building interest, whereas investing typically means paying your money into an "investment fund" along with other investors' money.

How do investment funds work?

Investment funds come in all shapes and sizes.

The investment fund containing your and other investors' money is used to buy various different types of investments: things like shares in companies, property and corporate and government bonds. Your money increases or decreases as the value of those assets changes.

"Low-risk" or "cautious" funds invest more of your money in safer assets like government or corporate bonds, and less in more risky assets like company shares. On the flip side, a more risky fund might invest more of your money in company shares.

Typically the more risk you take, the more your money could potentially grow by - but the greater the chance of losing money.

So, is investing riskier than putting money in a savings account?

When we talk about "risk" with investing, we mean the risk of losing money and ending up with less than you've put in.

Investing is generally riskier than putting your money in a savings account, but it also means there's potential for your money to grow more.

For example, as there’s no limit to how much companies can grow, investing in company shares has a higher potential to make you money. But it comes at a risk – companies can shrink as well as grow and you could get back less than you put in, depending on what’s happening with your shares when you choose to sell your investments (ie withdraw your money).

With savings accounts, how much money you make depends on interest rates. You can’t technically lose money, but it's worth considering whether the interest rate will beat inflation. If not, you could be losing money in "real terms", which is when the price of the things you want to buy goes up faster than the amount of interest your savings make.

How can I invest my money?

At OneFamily, we offer two adult ISAs that invest in stocks and shares on your behalf. That means you don’t need to choose which companies to buy shares in, our fund managers do that for you. You simply need to choose between two funds – one slightly riskier than the other.

If you have a Child Trust Fund with us, you’ll be able to easily transfer money into a Stocks and Shares ISA or Lifetime ISA (or a bit in both!) once you turn 18 by logging into your online account.

If you don't have a Child Trust Fund, you can open either account with a £25 direct debit or a lump sum of £250, and register for an online account so you can see how it performs.

We’ve produced a short video to explain how investing in stocks and shares could work for you.

About OneFamily's investment options

We invest in climate-friendly funds. That means our funds buy shares in companies that are playing their part in reducing climate change.

With both our Stocks and Shares ISA and Lifetime ISA, you can choose from two climate-friendly investment funds that can help grow your money without compromising on your moral values.

Lifetime ISA

If you're saving up to buy your first home, a Lifetime ISA could be a good fit for you. You can invest up to £4,000 each year into a Lifetime ISA and the government will top it up by 25% as long as you use it to buy your first home, that's up to £1,000 of free money every year!

Just be aware that if you do withdraw money for anything other than your first home then HMRC will charge you a penalty (unless you've turned 60).

Find out more about our Lifetime ISA

Stocks and Shares ISA

If you want to save for anything other than your first home or you’re not yet sure what you’ll use the money for, our Stocks and Shares ISA could be for you.

You can use the money in your Stocks and Shares ISA however you like and withdraw money at any time with no penalties for taking it out.

This makes it a good option if you think you might need to dip into your savings in the next few years but still want to make your money work hard for you.

Find out about our Stocks and Shares ISA

Important information

When investing it is important to be aware that the value of your investment can go down as well as up, meaning you could get back less than has been paid in.

Our investment products are best-suited to long term savings goals.


What's next?

If you haven't already, you can register now to take control of your Child Trust Fund.

Register now


Child Trust Fund customers

If you have a Child Trust Fund with us and would like to move your money into a OneFamily Stocks and Shares ISA or Lifetime ISA, it's important that you log into your online account to do so. We've made the process nice and easy and the option will show in your account as soon as you turn 18.

You can find out more about your potential next steps and compare your product options here.

A smartphone displaying the FTSE 100 share price

We have two adult products that invest in stocks and shares:

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