People invest for many different reasons. Some have made future plans and want a lump sum to turn them into reality, some want to enjoy life with a larger pension and others are seeking to combat the effects that inflation can have on their money.

Whatever your reason to invest, it’s important to decide which products and services you require, depending on the returns you’re looking to gain, the period of time you wish to invest for and your attitude to risk.

Planning for your future commitments

Probably the best way to start thinking about investing is to write down the large financial expenses that you expect over the next 15 years, the money you’ll need and the date when you’ll need it for. Remember, your commutation on retirement will help you pay for higher value expenses.

Our examples:

Expense one

Type of expense: Child through university

Amount needed: £40,000

Date of when needed: In three years

Expense two

Type of expense: New conservatory

Amount needed: £13,000

Date of when needed:
In five years

Expense three

Type of expense: Daughter’s wedding

Amount needed: £20,500

Date of when needed:
In seven years

Factors to consider when making an investment

Now you can see what expenses you’re likely to face in the future, you may consider that investing your money is the way forward. However, there are a few factors you should consider:


  • Cash - bank/building society accounts/cash ISAs - lower risk
  • Gilts & Bonds - offering a fixed rate of interest - considered safe
  • Commercial property - something you may consider to spread your risk - safe but not without risk
  • Collective Investments - a fund that several investors contribute to
  • Individual shares - buying shares in a company - can be risky, but can be rewarding.

How long you can invest your money for can have also a significant impact on your returns?
You will usually find the longer the investment term, the greater the possible return.

You’ll also need to assess your tolerance to risk.
By this we mean, how much are you prepared to stomach large swings in the value your investments. Would you consider yourself adventurous or cautious?

And what is your capacity for loss?
Could you put up with a fall in your investments without it affecting your day to day living?

The impact of inflation

Finally, consider how inflation can affect the real value of your money.
If you do little or nothing with your money, its real value will go down as the cost of goods rise.

Here’s an example:
If you think about what £500 could have bought you over the years. In 1950, £500 could have bought you a house. In 1960, the same £500 could have bought you a car. Now, that same £500 could buy you a TV.

If you require further information before investing, our Independent Financial Advisors are on hand to give you expert, impartial advice, including:

  • Establishing your plans and objectives
  • Defining what capital/income you’ll need and when
  • Budgeting and saving money
  • Identifying financial ‘gaps’
  • Your attitude to risk
  • Regularly reviewing performance.

Please note - Independent Financial Advisors cannot advise you on Police Mutual products.