THE pandemic has led to a spike in savings, with the Bank of England estimating that from May to November 2020 British households built up an extra £125-billion in savings.

But with interest rates still stubbornly low — currently at 0.1 per cent — cash savers struggle to grow their savings. As a result, we’ve seen a rise in the number of novice investors who have turned to investing to make their money work harder. It’s important that investors understand the risks involved and don’t get swept along into buying high risk investment products.

To help, Rob Morgan, investment analyst at Charles Stanley Direct shares his top tips on how to invest safely.

1. Is investing right for you?

It’s crucial to assess a number of things before starting your investment journey. This includes considering what your financial circumstances are, risk appetite and investment goals. This is because investments carry some risk and can go down as well as up, so you need to make sure you can afford to invest over the longer term to allow for these fluctuations.

If you’re unsure whether investing is right for you, or how much to contribute to your investments, it’s best to seek regulated financial advice from someone who can help work on a savings or investment plan.

2. Spread your investments

To help make your investments resilient to any losses, it’s important to have a diversified portfolio – that is, to spread your risk across a range of investments.

3. Avoid herd mentality

Getting swept up in popular investing trends could potentially be a lot riskier than you originally think.

Before making any investment decision, make sure to stop and think about what you’re investing in and whether it will be beneficial to you in the long term, no matter how many people appear to be taking part. If not, it could end up an expensive mistake.

4. Be aware of scams

There has been a surge in scammers during the COVID-19 pandemic who seek to take advantage of people’s increased financial vulnerability.

With a rise in DIY investing, it’s vital that investors take care to research who they’re investing with and that they’re FCA regulated.

A lot of investment scams are facilitated online and via social media, and with over two thirds (68 per cent) of UK savers actively managing their own personal financial investments, it means investors need to be more vigilant than ever not to part with their cash if they don’t know who or what they’re being asked to invest in.

5. Identify what is noise and what is genuinely useful information

In an era of 24-hour news feeds and virtually limitless information it can seem overwhelming to get your head around what’s the best thing to do with your investments.

Remember that having more information doesn’t necessarily make you a better investor, but it’s important to learn to differentiate between what is noise and what is tangible, actionable information.

To support novice investors, Charles Stanley Direct has launched a New to Investing — www.charles-stanley-

direct.co.uk/New_To_Investing — hub, which provides a regular selection of resources including a free guide, articles and tips.