Bestinvest launches £250 monthly prize draw for regular savers

Most people know they should be saving money on a regular basis but struggle to find the time or motivation to make deposits into their investment account every month. Setting up regular savings not only liberates investors from the hassle of transferring cash every four weeks but also ensures they adopt a healthy savings habit that can help to turbocharge their returns.

To encourage more investors to reap the rewards of regular saving, Bestinvest, the online investment and coaching service, has unveiled a new prize draw which rewards one regular saver every month with £250 in cash. To qualify, Bestinvest clients must be 18 or over and set up a direct debit or standing order of £50 or more to their Individual Savings Account (ISA), Self-Invested Personal Pension (SIPP) or Investment Account before the 12^th of the month.

Jason Hollands, Managing Director of Bestinvest, said: “Savers don’t need to invest huge amounts to reap the rewards of regular investing. Small amounts saved monthly can grow substantially over time, thanks to the beauty of compounding, where your returns help to generate even more returns.

“Regular saving also helps to take the emotion out of investing, which can often be clouded by market noise, short-term volatility or investors trying to time the market. By sticking to monthly savings, an investor can stay focused on their financial goals and remove the urge to worry whether now is the right time to buy.

“Financial markets, especially equities, can be volatile over short-term time periods, but have historically delivered much higher real returns – that is returns that beat the effect of inflation – over the long-term. We recommend a time horizon of at least five years or more, as this allows money invested to ride out any short-term market volatility.

“This is never guaranteed of course, which is why regularly drip-feeding money in is the best option as this takes advantage of pound-cost averaging. With this strategy, rather than buying a lump sum at a single price point – such as during a supposed dip - investors can buy smaller amounts at regular intervals no matter what the price is at the time. This approach cushions the effects of volatility in the short- and medium-term but also encourages savers to stick to a regular investment pattern that helps their money work harder on a consistent basis.”

The prize draw will run for 12 months with one monthly saver selected at random on the 12^th of each month. The £250 cash prize will then be paid out within 30 days. Bestinvest customers can only win once during the 12-month period, with any clients who have already set up monthly savings automatically included in the draw. (Terms & Conditions apply).

To enter the raffle, people must open a Bestinvest account and then either set up a direct debit on their account or a standing order with their bank to fund their account monthly. Monthly savings can either be made in cash or directly into a fund.

Existing clients can enter by selecting their account, clicking on the ‘Monthly Savings’ tab at the top of the screen or calling the customer service team on 020 7189 9999. Then choose how much to save each month and decide whether to invest directly into a fund or make a cash deposit. Winners will be notified by email with the cash prize deposited directly into their Investment Account or transferred to their personal bank account if they don’t have one.

While savings rates on regular bank and building savings accounts are increasingly competitive, those who save too much can run the risk of breaching their Personal Savings Allowance (PSA). This allowance, which lets savers earn interest on their savings without paying tax, has stayed the same since 2016 – with basic rate taxpayers given a generous £1,000 PSA, those paying the higher 40% tax rate entitled to a £500 allowance and additional tax rate payers receiving no savings allowance at all.

Savers looking for a more tax-efficient option could consider subscribing to an ISA, which allows them to save up to £20,000 per tax year with any income or returns free of tax.  Meanwhile, pension savers looking to reduce their income tax liability, could top up their SIPP to boost their retirement income.

Hollands added: “Directing savings towards tax-efficient investment accounts can be an effective way to reduce the tax burden, and savers don’t need to make instant investment decisions either. They can simply leave the money in cash, where they will earn a competitive interest rate and take their time to choose their investments.

“Those unsure about how and when to invest can also take advantage of Bestinvest’s free financial coaching service with a qualified investment professional, bookable directly through the website or mobile app. They are available to anyone – whether they are a Bestinvest client or not - with coaches offering guidance on what investors ‘could’ do with their money. Meanwhile, those wanting more bespoke advice on how to invest their money can book one of Bestinvest’s bite-sized, fixed-price investment packages, such as our ‘Investing for Your Goals’ package, which costs just £250.”

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication.

Investment does involve risk. The value of investments and the income from them can go down as well as up. The investor may not receive back, in total, the original amount invested. Past performance is not a guide to future performance. Tax legislation is that currently prevailing, is subject to change and depends on individual circumstances.