Whether you have a lump sum to invest or want to set aside a regular amount each month, you will make more money by investing in managed funds than by leaving the cash in a savings account. And if your investments are held in a personal equity plan, the earnings are entirely free of tax.
The concept is simple: pooling the funds of lots of savers and paying an expert to decide how and where to invest them. It is a concept that can pay off handsomely. If you had put pounds 1,000 in a typical UK unit trust 10 years ago, it would be worth more than pounds 2,500 today. That's pounds 1,000 more than if it had stayed in a savings account.
Here and on pages 18 to 21 we put investment funds through their paces by examining the pros and cons of trusts, index-tracking funds, PEPs and open-ended investment companies (Oeics). We also explain which vehicles are best for different types of investor, and advise on the best homes for your share windfalls.