There's more investing content online than ever, and most of it is either trying to sell you something, covering the exciting exceptions rather than the reliable rule, or aimed at people who are already investing. This is for people starting from scratch — what the foundations need to be before you open an account, and what to actually do once they are.
Before you invest a penny
Three things need to be in place first. Most people skip them.
Clear high-interest debt first
Credit cards at 20–30% APR represent a guaranteed negative return. Investing in the stock market offers an expected — not guaranteed — return of 6–8% long-term. Until high-interest debt is gone, investing is a losing trade.
Non-negotiable — guaranteed return equal to the rateBuild a 3–6 month emergency fund in easy-access cash
Markets fall. Jobs are lost. The worst time to sell investments is when you're under financial pressure — which is also when you're most likely to need the money. An emergency fund means your investments can stay invested through bad periods.
Foundation — keeps investments untouched in a crisisCapture your full employer pension match
If your employer matches pension contributions, take the full match before investing in an ISA. An employer match is an immediate 50–100% return — it is, by definition, a better investment than anything you can open yourself.
Free money — the single best investment available to youThe right wrapper
Use a Stocks & Shares ISA. The tax-free wrapper matters enormously over time.
A Stocks & Shares ISA lets you invest up to £20,000 per tax year with no tax on growth, dividends, or withdrawals. Over 20–30 years of compounding, sheltering your returns from capital gains tax and income tax on dividends makes a material difference to your outcome.
Opening an investment account outside an ISA wrapper when you have ISA allowance remaining is almost always wrong for a UK investor. Start inside the ISA and only consider other account types (general investment account, pension) once the ISA is full or the pension's tax advantages are more relevant.
Your employer pension (after capturing the full match) grows with tax relief and is locked until 57. An ISA grows tax-free and is accessible any time. For long-term wealth building beyond the employer match, most people benefit from both — ISA for flexibility, pension for tax efficiency. The order depends on your tax rate and timeline.
What to invest in
For most people starting out, one global index fund is enough.
A low-cost global index fund — tracking something like the MSCI World or FTSE All-World — gives you exposure to thousands of companies across dozens of countries, automatically rebalanced, for an annual cost of typically 0.1–0.2%. This is the answer for almost everyone who is starting out and doesn't have a specific reason to do something more complex.
Choosing individual shares feels more active and engaging than buying an index fund. It is also, for almost everyone, worse. Decades of research show that the vast majority of professional fund managers underperform a simple index after fees — over long periods, most individual investors do worse still. The boring answer (index fund, low cost, hold for decades) consistently outperforms the exciting one. Don't let content about individual shares convince you that complexity is the same as skill.
How to invest
Regular investing beats waiting for the right moment.
| Approach | What it means | Verdict |
|---|---|---|
| Regular monthly investing (£X/month) | Invest the same amount each month regardless of market level | Best for most people — removes timing decisions entirely |
| Lump sum investing | Invest a larger amount all at once | Statistically better than drip-feeding if you have the funds — time in market matters |
| Waiting for a market dip | Hold cash until markets fall, then invest | Usually worse — markets spend more time rising than falling; waiting costs returns |
| Trying to time the market | Move in and out based on predictions | Consistently underperforms — don't do this |
The investment industry profits from activity. More trades, more complexity, more switching — all generate revenue for platforms and advisers, and reduce returns for investors. Your job is to do less than you feel like doing. Set up a monthly direct debit into a low-cost index fund inside an ISA, and don't touch it for decades.
Platform choice
Fee structure matters more than features — especially at smaller amounts.
ISA platforms charge either a flat annual fee (better for larger portfolios) or a percentage of your holdings (better for smaller amounts). At £5,000–£10,000, a 0.25–0.45% annual platform fee is typically acceptable. At £100,000+, a flat fee platform becomes significantly cheaper.
The fund's own ongoing charge (OCF) matters too — a global index tracker should cost no more than 0.2% per year. Adding platform fees and fund fees, aim to keep total annual costs under 0.5–0.6% on smaller sums, and lower as your portfolio grows.
What should you actually do first, given your specific situation?
Franky asks about your debt, emergency fund, employer match, ISA usage, and goals — then gives you a clear, personalised starting point.
Talk to Franky →