An introduction
With interest rates falling to record lows in recent years, finding income has probably never been harder.
And as people now have freedom over how they spend their pension savings, more and more are looking to their investments to provide them with a regular income in retirement.
This guide explains some of the unique features that give investment companies a head start over other funds when it comes to delivering income.
When it comes to looking for an income from their savings, many people would think first about deposit accounts and other similar investments which pay interest. These provide a secure income, and protect your capital, but falling interest rates in recent years mean that these often pay a very low income.
Investment companies can deliver a higher income in the form of dividends. How often they pay them varies, but most pay dividends twice a year or quarterly. Some investment companies aim to produce a high level of immediate income. Others try to grow income over time. Some offer a mixture of income and capital growth. Whichever you are looking for, it’s worth understanding how investment companies can help meet your income needs.
Because your money is exposed to risk, investment companies are not a substitute for deposit type investments. You should not invest in investment companies if you need a guaranteed income or if you cannot afford to lose your capital.
However, if you can accept the risks, investment companies offer something different as part of a balanced, long-term income portfolio.
Investment companies can offer a mixture of income and capital growth to meet your needs.
New to investment companies? Read ‘A guide to getting started’ to learn the basics.
Find out what makes an investment company tick.
Available at www.theaic.co.uk or by calling 0800 707 707