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Received a Christmas bonus? Here’s how to make it count

Investing could turn it into the gift that keeps on giving

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Topic: Investing

Advent calendars, mince pies and hampers… there’s a lot of competition for the best treat of the festive season, but the one that’s most likely to make a lasting difference is your Christmas bonus.

UK workers received a record £46.4 billion in bonuses last year, according to the Office for National Statistics, so if you’re one of the lucky ones, it’s time to decide what to do with it.

We all know that investing that lump sum makes a lot of sense, but it’s easy to lose sight of that when you’re looking out the window at two inches of snow and still haven’t booked a holiday for the year.

So if you need a little encouragement to keep you on the right track, here are some figures that might help.

Click & Invest potential returns

If you were to invest £20,000 with Click & Invest in our ‘measured’ investment strategy, we estimate that it could grow to £22,736 in just three years, with expected returns of 13.68%.

Of course, investments can go down as well as up, and you may lose some or all of your money, but there is currently no instant-access savings account out there that can get close to that rate of return at the moment.

Over a longer period, the potential returns are even more enticing:

‘Lower projected outcome’ over 5 years

‘Expected projected outcome’ over 5 years

‘Higher projected outcome’ over 5 years

£10,000 initial investment

£6,916

£12,083

£19,929

£20,000 initial investment

£13,831

£24,166

£39,858

Table data source: The Investec Click & Invest Investment Calculator

The projections shown here are for illustrative purposes only. There are no guarantees with investing and this forecast is not a reliable indicator for future performance. Find out more information on how this projection is calculated.

What if the market falls?

Naturally, with a large lump sum investment, you’ll have some trepidation that the stock market could nose dive – and take a chunk of your bonus in the process.

The dips can be painful. But waiting for the right moment can hurt more than you think.

The markets rise and fall but the long term trend has been undeniably upwards. Putting your money to work earlier could provide a higher rate of return over time. Sitting on the sidelines could be more harmful to your finances than jumping straight in.

How many holidays could your portfolio treat you to?

Experiment on our investment calculator and see for yourself the potential effects of investing for three, five or ten years. Your 2018 Christmas bonus might just pay for every holiday you ever have. By making monthly top-ups from £100, you could be in a position to make that holiday a round-the-world cruise… or two.

Try the investment calculator now to see a projection of what your bonus could be worth if you invest it with us, either as a lump sum or as monthly installments.

The choice between a refreshing holiday and saving your Christmas bonus is a tricky one… wouldn’t it be better to just have both?

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