THE ETF SAVINGS PLAN CALCULATOR

If buying a single company share is like buying a single chocolate, then buying an ETF is like buying a box of different chocolates. ETFs can contain 100s or even 1,000s* of different company shares or bonds. So rather than backing just one company, your investment is spread across many different companies, helping to reduce risk**.

*Bloomberg, as at 18/05/2023
**Risk: Diversification and asset allocation may not fully protect you from market risk.

An index measures the performance (or returns) of a collection of stocks, bonds, or other assets. Indexes can represent something as broad such as the global stock market, or as narrow as a single country or industry. ETFs aim to replicate the performance of an index.

An ETF savings plan allows you to invest a flexible amount in ETFs each month, starting from just £1*. It offers the ability to buy fractional shares, which means you can think in euros, not in shares, and choose how much you want to invest each month regardless of the ETF’s share price. Once you’ve selected your ETF and regular contribution, you’re all set to invest. Don’t worry – you can always make changes.

*Trading 212 ETF Savings Plan, as at 12/09/2024

A savings plan can be a great option for people saving for retirement, paying for their children’s education, or buying a house. As savings plans allow you to invest small monthly amounts, they are a good way to build long-term wealth while reducing the risk of investing at the wrong time. What’s more, you can invest as little as £1 a month and should you want to change future contributions or even sell your ETF, you can do that too.

Start setting up your ETF savings plan by using the ETF Savings Plan Calculator to explore different ways you might reach your investment goals. Then you can choose an ETF that best fits your needs. To buy the ETF, you can set up a broker account if you don't already have one and create a savings plan with your chosen ETF via your broker account.

You’ll need to decide which region or industry you'd like to invest in first. For example, if you want to invest in the U.S., you could pick an ETF that includes U.S. companies like the S&P500. Or, if you want to invest in UK companies, there’s the FTSE.

Investing is a long-term game, so it’s best to get started sooner rather than later. After all, the longer your money is invested, the better chance it has to grow. And while in the past, it may have made sense to wait, so you could save and invest larger sums, today the low or no trading fees make saving small amounts regularly a good option.