£ 276 billion reasons to invest in actions from the United Kingdom?

Instead of investing in actions from the United Kingdom, according to the Financial TimesSavings have decided to put £ 276 billion in bank accounts that do not pay any interest.

In my opinion, with inflation constantly eroding the value of money, this is not a sensible decision.

People probably see it as a “risk -free” option, believing that it is unlikely that a bank or construction society stands out. And even if one did, the government's financial services compensation scheme protects deposits of up to £ 85,000.

I suspect that these savers are considered reluctant to risk. But it is undeniable that the real value of its cash is decreasing. Surely the goal of investing is trying to grow your money?

Even if the £ 276 billion were redistributed in accounts that carry interest, the savers would be better.

However, with my spare cash, I prefer to buy shares from the United Kingdom.

Why is that?

This is because history shows that it is possible to accumulate wealth by investing in the stock market.

For example, from February 1, 2020 to January 31, 2025, the Ftse All-Share The index, which captures 98% of the value of the actions of the United Kingdom, increased by 37.9%. This figure, equivalent to an average annual increase of 6%, is based on the fact that all dividends received are reinvested.

A tool on the website of the Bank of England shows that, during the same period, the purchasing power of the pound has eroded in 24.6%.

However, this analysis comes with some health warnings.

There is no guarantee that the story will be repeated. The fact that the United Kingdom's stock market grew in the past, does not necessarily mean that it will grow again. As the billionaire investor Warren Buffett once said: “If the last story were everything that was needed to play the money game, the richest people would be librarians. “

And, as noted above, part of the growth of the index of the entire use of FTSE came from the reinvestment of dividends. But due to the volatility of the company's profits, payments can decrease or be suspended.

Therefore, investing in actions and actions is not risk -free.

The biggest and best?

My personal preference is for Ftse 100 stocks. In theory, due to their strong balances and global scope, the profits of these companies should be more stable.

And most of them pay dividends.

National grid (LSE: Ng.) It is an action that a cautious saver could consider.

This is because the price of its action tends to be less volatile than most. In the last five years, his monthly beta has been 0.28. In other words, if the stock market changes value by 1%, the price of National Grid shares, on average, will increase (or fall) by 0.28%.

And offers a healthy dividend. In the last 12 months, he has paid 54.96PA of participation. This means that currently (February 17) produces 5.7%. The average FTSE 100 is 3.6%.

However, the transmission and distribution of gas and electricity requires a expensive infrastructure. The company surprised investors in May 2024, when it announced an issue of rights of £ 7 billion.

It is also regulated, which means that you must meet certain performance objectives. Otherwise, you could face fines or other penalties.

But it does not face any competition and, for more than two decades, it has constantly increased its dividend every year.

For those cautious savers who are currently not gaining any interest in their cash, National Grid could be a participation of the United Kingdom to consider.