How To Earn Steady Returns On Your Investment With Low-Risk Options In The UK

Get The Best List Of Low Risk Investments In The UK For Less Than An Hour

Enjoy A Steady Income, Protect Yourself Against Devastating Losses With Low-Risk Investment In The UK

When markets become choppy, investors get prompted to move their money into relatively safer and lower-risk investments – at least until the volatility subsides.

More stable, lower-yielding investments can help protect your cash and even provide modest growth in difficult times.

If you want to avoid volatile markets, our experts here at Pearl Lemon Invest can advise on the best low-risk investments that offer potential financial peace of mind for their owners. 

Contact us today to learn more about how we can help.

Business woman hand using laptop with bank savings account application, account or saving money or
Young Woman Working on Laptop

Reasons People Go With Low-Risk Investments


Low-risk investments, like the name, are investments with low risk, market relevance and low variance. 

Here are more reasons why people choose low-risk investing over high-risk.

Bonds are considered safer than stocks because they provide a consistent flow of interest payments over time. Government bonds issued by the UK are the safest because they are backed by the government’s full faith and credit. However, because of the guarantee, they generally pay lower interest than corporate bonds. In general, large-company stocks are less risky than small-company stocks. They also frequently pay a dividend.


Investing in bonds and stable companies reduces your exposure to significant changes that can reduce your returns. Market volatility tends to affect high-risk investments, whereas low-risk investments can usually ride it out.

Protection From Inflation

Even though banks offer interest rates when you keep your funds with them, the biggest risk is inflation, which is constant in most monetary systems. As a result, investing money is a far better solution because you can track inflation trends and avoid losing the value of your assets. For example, if the inflation rate is 2% and your dividend payments are greater than 5% with your low-risk investment, you will keep your initial investment and profit. Furthermore, the share price will track the inflation rate.

Working with stock market
African american young business man analyzing stock market value

Chance Of Steady Income

Because this type of stock is associated with companies that have a solid market base and low chances of significant changes in the short term, purchasing it is a great way to secure your funds and earn a consistent income through dividends from your share in the company. 

You can always choose to sell them as well. Some of the best low-risk investments include preferred stocks with a dividend yield of around 2%, utility stocks with an annual yield of around 3%, fixed annuities, mutual funds, and investment trusts.

Best Low-Risk Investment To Go For

To start investing, consider some low-risk UK investment options listed below. Most will allow you to begin earning a return while also keeping your capital close at hand so that you can buy what you need – a house, car, or retirement – when you need it.

Money Market Funds

A money market fund provides slightly higher returns than a cash deposit.

Money market funds invest in short-term debt rather than bonds (see below) or stocks and shares. This is purchased from governments, banks, and businesses with strong balance sheets and high credit ratings. In exchange, a small amount of interest is paid.

Because of the short timeframes, money market funds are a stable, low investment risk. It also provides more diversification than keeping cash in a single bank.

Money market funds can be a good investment option if you need somewhere to ‘park’ your money while you work on a longer-term financial plan.

Discussing stock market data
Trade safe

High-Interest Current Accounts

A money market fund provides a slightly higher return than a savings account. High-interest current accounts (HICAs) are current ones offered by providers such as high street banks, frequently offering higher interest rates than savings accounts. Some HICAs also offer cash signing rewards as a customer incentive.

HICAs typically impose customer requirements, such as a minimum monthly funding amount and an upper limit on interest-bearing balances. Interest rate deals that are being offered may also have a time limit.

Some accounts charge a monthly fee. Before signing up, consider how any fees, such as monthly and overdraft penalties, are compared to the higher interest rate.

The Financial Conduct Authority regulates current accounts. UK-licensed banks are covered by the Financial Services Compensation Scheme, which protects customers from corporate failure up to £85,000 per person per institution.

Government Bonds

Bonds are a type of investment that is less volatile and more secure than stocks and shares. In terms of risk, consider them a middle ground between cash on deposit and equity investing. They can be traded on markets just like stocks and shares.

When you purchase a government bond, you are lending money to the issuer in exchange for interest payments over the life of the bond (known as the “coupon”) and the return of your initial loan when the bond matures.

Bonds are also known as ‘fixed interest securities’ because the return on your investment is known in advance as an investor. The interest rate you receive varies depending on the bond. The higher the interest rate you can expect on a bond, the higher risk of not receiving your original investment.

Real Estate

Investing in real estate also has risks. However, exposure to bricks and mortar can be classified as a “relatively safe” investment. Property has the potential to generate an income stream as well as capital growth.

Property can be purchased in various ways, either directly or indirectly. The best way is to purchase a property and rent it out. Remember that, in addition to the purchase price and any associated mortgage, additional fees will be considered.

The property also has the disadvantage of being a relatively ‘illiquid’ asset, meaning it can be difficult to sell. In extreme cases, a UK investor may be trapped in property portfolios while managers sell off buildings.

Meet Your Investment Goals With A Professional

Low-risk investments can range from fixed-interest cash investments to low-volatility stock market securities. What you choose will be determined by your risk tolerance and investment goals, so consult with an expert for financial advice like we do here at Pearl Lemon Invest to determine your best options.

Talk to our experts to know more.

Midsection of business man checking stock market on mobile phone


Bonds issued by stable governments, such as the United Kingdom, are regarded as some of the safest investments. UK gilts are one example. These are low-risk and low-return investments because there is little risk of these governments defaulting (relative to stocks).

As someone approaches and enters retirement, they may choose to allocate more of their portfolio to lower-risk investments, such as bonds, and less to stocks, resulting in a more risk-averse portfolio. Someone younger may prefer to invest in stocks rather than bonds because they have a longer time horizon to ride out the volatility.

Lower-risk investments, by definition, have less at stake-either in terms of the amount invested or the importance of the investment to the portfolio. There is also less to gain in terms of potential return or long-term benefit.