How to Start Investing with £100 a Month in the UK (Beginners Guide)

How to Start Investing with £100 a Month in the UK (Beginners Guide)

You Don’t Need Thousands to Start Investing

If you think investing is only for people in suits throwing around millions in the City of London, think again. Thanks to modern apps and tax-free accounts like Stocks & Shares ISAs, anyone in the UK can start investing with just £100 a month — and it could be one of the smartest money moves you ever make.

Here’s how to get started, even if you’ve never invested a penny before.

Step 1: Set Your Financial Goals

Before you start investing, ask yourself:

• What am I investing for?
• When will I need the money?
• Can I leave it untouched for at least 5 years?

Your answers will help you choose how much risk to take and which investments suit you best. For example, long-term goals (like retirement or a home deposit in 10+ years) can usually handle more investment risk.

Step 2: Build an Emergency Fund First

Investing carries risk — your money can go up and down. So before you invest, make sure you’ve built an emergency fund with 3–6 months of essential expenses in a high-interest savings account or premium bond.

This acts as a financial safety net and means you won’t need to cash in your investments if life throws you a curveball.

Step 3: Choose the Right Investment Account

In the UK, the place for most beginners to invest is a Stocks and Shares ISA. It allows you to invest up to £20,000 a year — completely tax-free.

Other options include:

• Lifetime ISA (LISA) – If you’re aged 18–39 and saving for your first home or retirement, the government adds 25% to what you save, up to £1,000/year.
• Self-Invested Personal Pension (SIPP) – Great for retirement saving. You get tax relief, but can’t access the money until age 55 (rising to 57 in 2028).

Tip: For flexibility and long-term tax-free growth, a Stocks and Shares ISA is ideal for most new investors.
 
Step 4: Pick an Investment Platform

To invest, you’ll need to open an account with a platform or provider. These are some of the most popular and beginner-friendly in the UK:

Platform	Best For	Typical Fees
Vanguard UK	Low-cost, simple investing	0.15%
Freetrade	App-based investing	£0/month (basic), 0.45% ISA fee
Trading 212	Commission-free stocks & ETFs	£0/month
Moneybox	Beginner-friendly robo- investing	£1/month + platform fees
Nutmeg	Managed portfolios	0.75% total

 

Look for: low fees, ease of use, ISA availability, and good customer support.

Step 5: Choose What to Invest In

You don’t need to pick individual stocks (and probably shouldn’t if you’re a beginner). Instead, invest in diversified funds:

• Index Funds – Track the performance of a whole market (like the FTSE 100 or S&P 500).
• Global Funds – Spread your money across thousands of companies worldwide.

Example:

Vanguard FTSE Global All Cap Index Fund – gives you exposure to over 7,000 companies globally. You can invest in these through your chosen platform, often with just £25–£100 per month.

Step 6: Automate Your Monthly Investment

Set up a direct debit or standing order so your £100 goes straight into your investment account every month. This builds a consistent habit and takes advantage of pound-cost averaging — smoothing out the ups and downs of the market over time.

Step 7: Be Patient and Stay Invested

Investing is a long-term game. Markets will go up and down — and that’s normal.

Keep calm, stay consistent, and avoid checking your portfolio every day. Over time, your £100 monthly investments can grow significantly thanks to the power of compounding.

Example:

If you invest £100/month with an average return of 7% per year:
 
•    In 10 years, you could have £17.409.45
•    In 20 years, nearly £52,396.57
•    In 30 years, over £122,708.80 Source
https://www.moneysavingexpert.com/savings/savings-calculator/
The performance figures shown refer to simulated past performance. Past performance is not a reliable indicator of future performance

Final Tips for New UK Investors

• Start early – The sooner you begin, the more time your money has to grow.
• Stay informed – Follow UK-based investing blogs or financial podcasts like Meaningful Money or The Money to the Masses.
• Avoid get-rich-quick schemes – If it sounds too good to be true, it usually is.

Ready to Start?

You don’t need a financial advisor or thousands in the bank to invest. With just £100 a month, a Stocks and Shares ISA, and a global index fund, you’re well on your way to building long-term wealth — right here in the UK.

For Lifetime ISA's You will incur a lifetime ISA government withdrawal charge (currently 25%) if you transfer the funds to a different ISA or withdraw the funds before age 60 and you may therefore get back less than you paid into a lifetime ISA.

By saving in a lifetime ISA instead of enrolling in, or contributing to an auto-enrolment pension scheme, occupational pension scheme, or personal pension scheme.
(i)    you may lose the benefit of contributions from your employer (if any) to that scheme; and
(ii)    your current and future entitlement to means tested benefits (if any) may be affected.

For Stocks and shares ISAs, ISA investors do not pay any personal tax on income or gains, but ISAs may pay unrecoverable tax on income from stocks and shares received by the ISA managers. Tax treatment varies according to individual circumstances and is subject to change.

The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.

Approver Quilter Financial Services Limited Sept 2025.