Your biggest risk might be not taking enough risk.
Uncertain markets and alarming headlines can make keeping your savings in a bank account or Cash ISA feel like the sensible option. Over the long term, though, avoiding investment markets carries risks of its own.
The power of compounding
Whether from interest earned in a bank account or growth from investing, compounding can help increase the money you end up with over time. Watch our video to learn more, but please remember that investments can fall in value as well as go up.
What exactly is compounding?
Compounding is what happens when interest payments or investment returns are added to the money you originally put in, so future returns build on each new larger amount...
Compounding is what happens when interest payments or investment returns are added to the money you originally put in, so future returns build on each new larger amount. At first, the effect can seem modest. Given enough time, it can become significant.
Cash feels safe, but...
When you invest, the value of your money does not move predictably or smoothly. It rises and falls along the way and you can get back less than you put in. Cash, meanwhile, does not fluctuate in the same way. If you put £10,000 in a bank account that does not charge fees and left it there, you would not end up with less than £10,000. At times, cash can even produce a return that looks reassuring.
£10,000 in a savings account
Source: Artemis and Lipper, 31 Dec 1999 to 30 Sep 2026.
- Bank savings: £10,000 in Dec 1999, £12,608 in Dec 2004, £15,452 in Dec 2009, £15,844 in Dec 2014, £16,248 in Dec 2019, £18,237 in Dec 2024, £19,590 in Sept 2026
We use the Bank of England base rate to indicate the return someone might have received in a savings account.
Accounts would have paid different rates, but the base rate gives a consistent, long-term indication of the cash return available for savers.
... inflation keeps working against you
What feels safe and what actually is safe are not always the same thing. Cash can be the right place for money you might need at short notice or over the next few years. But for money you can leave untouched for longer, cash brings a different risk. It may hold its value on paper, but inflation reduces what that money can buy. Even when savings rates look attractive, if the prices of goods and services are rising faster, you are still losing ground.
How inflation affects what your savings can buy
Source: Artemis and Lipper, 31 Dec 1999 to 30 Sep 2026; the Bank of England Base Rate has been inflation-adjusted using UK Consumer Prices Index (CPI) data.
- Bank savings: £10,000 in Dec 1999, £12,608 in Dec 2004, £15,452 in Dec 2009, £15,844 in Dec 2014, £16,248 in Dec 2019, £18,237 in Dec 2024, £19,590 in Sept 2026
- Inflation adjusted value: £10,000 in Dec 1999, £11,823 in Dec 2004, £12,755 in Dec 2009, £11,489 in Dec 2014, £10,871 in Dec 2019, £9,770 in Dec 2024, £9,869 in Sept 2026
The Consumer Prices Index, or CPI, is published by the Office for National Statistics, the UK's official statistics agency. It tracks how the prices of a representative basket of goods and services change over time. We have used CPI to adjust the savings balance to show what it can buy in 1999 prices.
The real value of £100
£100 in your pocket remains £100. But as prices rise, it buys less. Since 2000, its purchasing power has fallen significantly.
Pints of lager
In 2000 £100 bought
61
Pints
Litres of petrol
In 2000 £100 bought
71
Litres
Cinema tickets
In 2000 £100 bought
13
Tickets
Source: Office for National Statistics (ONS) - Average price data series. Data period: 31 Dec 1999 to 31 May 2026
Investing through uncertainty
Market falls can feel unsettling, but ups and downs are a normal feature of long-term investing. Trying to move in and out at the right time can be difficult. For many investors, remaining invested has often proved the more effective long-term approach.
As you would expect, the point at which you invest has a bearing on how your money grows over the long term. And with all investments you might get back less than you put in. Over longer periods, however, history shows that staying invested in markets has generally offered greater growth potential than leaving money in cash.
How £10,000 invested at different times could have grown
Source: Artemis and Lipper, 31 Dec 1999 to 30 Sep 2026.
- £10,000 invested at the start of 2000 grew to £44,268 by 30 September 2026
- £10,000 invested at the start of 2005 grew to £51,454 by 30 September 2026
- £10,000 invested at the start of 2010 grew to £37,608 by 30 September 2026
- £10,000 invested at the start of 2015 grew to £24,782 by 30 September 2026
- £10,000 invested at the start of 2020 grew to £17,229 by 30 September 2026
We use the FTSE All Share Index to represent the UK stockmarket. The index reflects the performance of a broad range of companies listed on the London Stock Exchange, giving a useful picture of how UK company shares have behaved over time.
It is only one example: investors can access many other markets around the world and different types of investment beyond shares.
Investing does not need to be about predicting the future
Long-term investing is about putting your money in the right position to earn you an attractive return over time. This means focusing less on short-term forecasts, resisting the urge to react to every market move and trusting instead in the resilience of your portfolio.
You do not need to start with a big amount like £10,000. Many people build their investments gradually, putting in small amounts when they can. What matters most is getting started and giving your money time to compound.
How Artemis applies this thinking
The charts above show the power of staying invested in markets. Active management is about asking a further question: where specifically should that money be invested?
Rather than trying to predict every market move, our fund managers focus on building investment portfolios designed to endure different market conditions. They carefully select the companies they believe offer the greatest long-term investment potential, although there is no guarantee this objective will be achieved.
Disciplined investment does not mean reacting constantly. Often it is about knowing when patience is the right decision.
Your timeframe and goals are important
Investing is generally best suited to money you can commit for the long term. Cash still has an important role in providing stability, flexibility and access to money you may need sooner. The right balance depends on your circumstances, your goals and when you are likely to need access to your money.
This page is designed to help you understand some of the potential benefits and risks of investing. It does not constitute financial advice or a personal recommendation. If you are unsure what is right for you, you should consider speaking to a financial adviser.