What Is the Lowest Risk Investment in the UK?

June 15, 2021 11:50 PM AEST | By Kamalika Ghosh
Follow us on Google News:


  • Volatility in share prices or a sudden crash in the market is what bothers low risk investors
  • Putting money in a savings account is not risk-free, as the purchasing power of money decreases in the long term.
  • Low-risk investment options to consider could be government bonds, FTSE 100 index, among others.

Savings can seem like a less lucrative option when the interest rates are low. Those who have a significant individual savings account (ISA) but earn very little returns on their cash would prefer investing that amount.

But the volatility in share prices or a sudden crash in the market is what bothers low-risk investors. Even if they do not need access to all their money in the short term, they still worry about the uncertainties associated with a market.


Copyright © 2021 Kalkine Media

But putting money in a savings account is not risk-free either. While a government guarantee means that the money would not be lost, its value would still be shrinking if we factor inflation. Cash in a savings account that gives poor interest rate means loss of purchasing power in the long term, as inflation is not accounted for. The value of the money in a savings account would fall, while the bank balance might not.

Here is a list of things that investors with a low-risk appetite could consider.


A safe way of investing is using a 'robo-adviser.’ These are online investment services that ask an investor a handful of questions, and then a suitable investment basket is allocated to the investor, which is also managed by these platforms on behalf of the investor.

Though still considerably niche, these are becoming increasingly popular.

Milder portfolios would be assigned to low-risk investors. These are portfolios that invest about 40 per cent of their assets in shares and the rest in less volatile options like cash or bonds.

Residential REITs

These are considered to be the best low-risk investments in real estate. Generally, real estate could be a low-risk investment option if an investor sticks to mortgages and residential properties.

But it would be riskier to invest in a single mortgage compared to investing in several mortgages. And real estate investment trusts, or REITs, offer a platform for that. REITs are real estate ETFs that invest in several properties across the US, UK and even beyond.

Also read: Can You Get Rich of Penny Stocks?

FTSE 100 Index

The index track’s London Stock Exchange’s top 100 stocks. They include behemoths like Rolls Royce (LON:RR), Royal Mail (LON:RMG), Tesco (LON:TSCO), and BP (LON:BP). This index exposes an investor to different kinds of industries, thereby cutting their overall risk.

It is considered to be a good low-risk option for investment for beginners. It also contains several dividend stocks, which could be reinvested to make your money grow further.

Also read: How good is gold as an inflation hedge asset?

Government bonds

Treasury bonds work like corporate bonds but with sovereign backing. These bonds pay a fixed interest rate and have a pre-decided payout agreement. It is important to check the credit rating of the issuing government to know that your payment on time is guaranteed. These are considered to be low risk if issued by entities like UK or US governments. Further hedging of risk is possible by investing in ETFs for government bonds.


The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK