Investment planning: are you ready for the future?

Now, therefore, could be a good time to review your cash holdings and make sure that you are achieving the right balance between security, return and access. Given how hard it can be to switch accounts between providers, many charities are looking to cash deposit platforms that offer access to multiple banks and accounts through one simple application. CFSL’s own CAF Charity Deposit Platform is one example.

However, these platforms are not immune to falling base rates. They can only offer the products available from their partner banks and, for funds that you are unlikely to need access to in the medium term, is now the time to consider investments?

Over the long-term, assets that carry a degree of risk to the capital value have consistently proven to provide better returns than cash. But, as we know, investments can go down in value as well as up, so there are periods when this is not the case. The answer is to view these funds as long-term holds.

Recent years have seen interest rates available at higher levels than for a generation and mixed performance for risk assets. Yet, figures from the Investment Association (IA) to 31 August 2024 show that in the longer term, assets that carry a greater risk have the potential to provide greater rewards.

Total returns: Cash deposits vs blended risk assets

Notes to table:

• IA Standard Money Market sector is made up of funds that invest in gross-paying cash and short-term deposits.

• Mixed Funds have a range of investments including cash, bonds and equities (company shares). Typically, the higher the equity content the greater the risk to capital losses, but also the opportunity for greater returns.

• Figures are not adjusted for inflation.

Seeing the potential for return is the easy part though. Investing itself can appear complex and daunting, and every expert will have at least a subtly different opinion. At CFSL, we want to help you consider your options with confidence. Our free Guide to Investing is available to download and get you started with the basics. We can also send you regular e-mails with further information and short educational videos designed to increase your knowledge from our investment partners, LGT Wealth Management UK.