Investing often feels like something reserved for people with large salaries or financial advisers on speed dial.
But the truth is, you don’t need thousands of pounds to start building wealth.
Thanks to technology and changes in the market, investing is now more accessible than ever—even if you’re starting with £10 or £50.
This guide will show you how to start investing with little money.
I’ll explain what investing actually is, how to do it safely, and which tools make it realistic for ordinary people.
What does “investing” actually mean?
Investing simply means putting your money into something—like stocks or bonds—with the aim of growing it over time.
Unlike saving (which is safe but slow), investing involves some risk, but also the potential for higher returns.
It’s important to understand:
- Investing is for the long term (think 5+ years)
- Your money might go up and down in value
- Over time, investing tends to outperform cash savings
So, the goal isn’t to “get rich quick”—it’s to grow your money steadily over time, especially to beat inflation (which eats away at the value of cash savings).
Why investing small amounts is still worth it
It’s easy to think, “What difference does £20 a month make?” But small, regular investments benefit from compound growth.
That’s when your money earns returns, and those returns earn more returns.
Here’s why small investing works:
- You build the habit early, even before you earn more
- You learn how markets work without risking large amounts
- You benefit from pound-cost averaging, which smooths out market ups and downs over time
You don’t need to wait until you’re debt-free or rich. You can start small and adjust as your financial situation improves.
Step 1: Get your financial basics in place
Before investing, make sure your foundations are covered.
Think of this as clearing the runway before your money can take off.
Here’s what you should sort first:
- Pay off high-interest debt: If you’re paying 20% on a credit card, you’ll almost always be better off clearing that before investing.
- Build a basic emergency fund: Aim for at least £500–£1,000 to cover surprise costs like car repairs or vet bills.
- Budget room for investing: Make sure the money you invest isn’t needed for rent, bills, or short-term needs.
These steps reduce the risk of needing to pull money out of investments early which can result in losses if the market dips.
While not the best analogy, think of investing in the same way you should think of gambling.
Only invest what you could theoretically lose and only once all your essentials are taken care of.
It’s extremely unlikely you’ll lose everything, but the possibility exists. If you approach it with this mindset, you’ll mostly experience mainly good news.
Step 2: Understand your investment options
Once you’re ready to start, you’ll need to choose where to invest.
Don’t worry, you don’t need to pick individual stocks or become a day trader.
In fact, for beginners, the best options are usually fund-based investments which are simple, diversified, and lower-risk.
Here are some good starting points:
- Stocks and Shares ISAs: These allow you to invest up to £20,000 per tax year, and any gains are tax-free.
- Index funds: These are collections of companies grouped together, like the FTSE 100. They’re low-cost and spread your risk.
- ETFs (Exchange-Traded Funds): Similar to index funds, but they’re traded like shares. Most investing apps offer these.
It’s best to avoid complex or high-risk investments like cryptocurrency, forex trading, or penny stocks when you’re just starting out.
These carry high volatility and can lose money quickly. You can always investigate those later when you know more about investing.
There are plenty of free, UK-focused resources to help you learn:
- MoneyHelper: Offers unbiased guidance on investing and ISAs
- Boring Money: Beginner-friendly platform reviews and guides
- Which?: Consumer advice, including investment platforms and fees
- Podcasts like Meaningful Money or The Martin Lewis Podcast often break down investing clearly
You don’t need to know everything to get started—you just need to start small and learn as you go.
Step 3: Choose a low-cost investment platform
The platform is where you actually invest your money.
These days, you don’t need a stockbroker or piles of paperwork. You just need a smartphone or laptop.
Many UK platforms let you start with as little as £1–£25.
Here are a few beginner-friendly options:
- Moneybox: Start with as little as £1. Rounds up spare change from spending and invests it automatically.
- Plum: Offers automated investing, with options based on your risk level.
- Freetrade: Easy-to-use app with commission-free investing. You can choose ETFs or individual shares.
- Vanguard UK: Excellent for index fund investing. Minimum initial investment is £500 or £100/month.
These platforms often let you invest automatically, so it becomes part of your routine without much effort.
After choosing one, you’ll typically:
- Open an account (e.g. a Stocks & Shares ISA)
- Set your risk level or choose funds
- Start investing a set amount each month
Look out for platform fees and fund charges—small differences add up over time.
Aim for platform fees under 0.5% and fund fees under 0.2–0.4% where possible.
Step 4: Decide how much to invest
You don’t need to invest a lot to get started. In fact, it’s better to start small and build gradually.
Here’s a simple way to begin:
- Choose a realistic monthly amount—£10, £25, or £50
- Set it up to go out automatically after payday
- Treat it like any other bill you pay (but to your future self)
Over time, increase the amount as your income grows or other expenses reduce.
If you can invest £25/month for 10 years with a modest 5% annual return, you’ll build over £3,800, perhaps even more if you keep going.
Step 5: Choose your risk level
Most platforms will ask about your risk tolerance when you sign up.
Risk doesn’t mean recklessness. It just means how much ups and downs you’re comfortable with.
Typical risk levels:
- Low risk: Mostly bonds or cash-based funds. Stable but lower growth
- Medium risk: Mix of stocks and bonds. Steady growth with some fluctuation
- High risk: More exposure to shares. Potentially higher returns but more short-term volatility
If you’re investing for 5+ years, a medium to high risk approach is usually fine, especially if you can stay consistent and not panic during downturns.
Step 6: Invest regularly and stay consistent
This is the golden rule. Long-term investing works best when you stay consistent, not when you try to time the market.
Benefits of regular investing:
- You avoid trying to guess the “right time” to invest
- You buy more units when prices are low, and fewer when they’re high (pound-cost averaging)
- You smooth out the ups and downs of the market
Set up a direct debit or standing order so your investment happens automatically each month.
This removes decision fatigue and keeps your plan on track.
Step 7: Don’t panic when markets go down
The value of your investments will rise and fall—this is completely normal.
The worst thing you can do is panic sell during a dip. Historically, markets usually recover over time.
When markets drop:
- Do nothing—stay invested
- Keep investing if you can as you’re buying in at a discount
- Review your goals, not the headlines
Remember: investing is a long game. You haven’t lost money unless you sell at a loss.
This is where that gambling mindset comes in. If you ringfence an amount you can afford to invest, you’ll stress a lot less when markets dip.
Step 8: Check in once or twice a year—not every week
You don’t need to track your investments daily. In fact, obsessively checking them can lead to rash decisions.
Instead:
- Review once or twice a year
- Make sure your fund still matches your goals and risk level
- Increase your monthly amount if your situation allows
Let your investments breathe. Time in the market beats timing the market—every time.
Final thoughts: investing is for you—even if you’re starting small
Starting to invest with little money isn’t just possible—it’s smart.
You don’t need to wait until you’re “better off” to begin. In fact, starting early and staying consistent can build wealth slowly but steadily.
To recap:
- Clear your high-interest debt and build a safety buffer
- Choose a beginner-friendly platform with low fees
- Start with as little as £10–£50 a month
- Stick to simple, diversified investments like index funds or ETFs
- Automate your contributions and let time do the hard work
- Only invest as much as you could afford to lose
Investing is about progress, not perfection. Every pound you invest today is a vote for your future financial freedom.
