August 11th 2025
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The Best Way To Invest £100K. Is It Property?
If you’re a budding investor with £100K at your disposal, you may be wondering the best way to invest it to secure a prosperous financial future.
As a property specialist and longstanding UK investor, I’ve helped myself and my clients generate sustainable wealth from well-positioned £100K investments.
Here, I’ll explain how to invest £100K in the UK by exploring five effective methods that can result in genuine financial growth or a consistent level of passive income.
Are you ready to take your next big step as a UK investor?
Let’s get started.
Table of Contents
Did you know? Despite recent economical challenges, 23% of the adult UK population (the equivalent of 12.5 million) currently invest in stocks and shares.
Stocks and shares are a worthy addition to my rundown of the best way to invest £100K in the UK. The average annual return of the FTSE All-Share Index over the last four decades is around 7.48%. This figure suggests that you can enjoy a healthy level of financial growth by choosing the right investments for your goals.
According to money analyst Gavin Shepherd, investing in stocks and shares can offer solid returns, but you should always consider your personal circumstances before making a commitment:
“Over the long run, historically stocks and shares have outperformed money in savings accounts.
But that’s no guarantee they’ll do so in future. It’s all about your personal circumstances. For example, you might be one of the many who have despaired at how interest on savings accounts is eaten away by inflation and are prepared to take a risk in the hunt for bigger returns.
Or you may have drawn up a well-researched plan to save £10,000 over the next decade to help pay for your children’s school fees. In both cases, investing could offer a way for you to achieve your goals.”
– Gavin Shepherd
While past performance doesn’t ensure future financial success, stocks and shares typically outperform cash bonds over longer investment timeframes.
Here are some tips to get started with stocks and shares…
- Consult a professional stockbroker: Search for a trusted broker that charges zero commission on stock, ETF, and fund trades like Freetrade or Trading 212. Doing so will keep consultancy or service costs to a minimum.
- Explore index funds: If you’d like to take a hands-off approach to investing, index funds offer wider market exposure and generally generate solid average market returns. Search for funds that track the FTSE 100 or FTSE All-Share Index.
Risk level: Investing in stocks and shares can be considered fairly high-risk due to constant market fluctuations. With the right advice and a diverse portfolio, you can potentially reduce your risk and maximise your profits over time.
Invest funds in bonds and fixed income securities
Bonds and fixed income securities are key fixtures in many professional investment portfolios as they’re typically considered more stable than the likes of stocks or shares.
With this branch of investment, you can take your £100K and become a ‘lender’, receiving fixed repayments based on a specific interest rate. So, while—like any form of investment—there are financial risks involved, fixed income securities can result in a steady stream of passive income.
You can arrange fixed income securities with government bodies, corporations, and dedicated third-party marketplaces (be mindful that these services will usually charge a commission or a fee).
My top tip on successfully investing £100K in fixed income securities is to place your funds into more than one channel of investment or bond to avoid putting your eggs in one financial basket. Also, you should always take the time to understand all of the investment terms in detail to steer clear of any unexpected surprises later down the line.
Risk level: Fixed income bonds and securities are considered low to medium in terms of risk. However, brokerage expert Charles Schwab issues some words of caution:
“Interest rates and bonds often move in opposite directions. When rates rise, bond prices usually fall, and vice versa. Learn the impact this relationship can have on a portfolio.”
– Charles Schwab
Did you know? The FSCS offers up to £85,000 of financial protection per bank.
Another best way to invest £100K is to explore cash investments and cash equivalents. These types of investment are relatively secure compared to other well-trodden methods and they’re also fairly simple to manage.
CCEs are ‘liquid’ investments as they’re often fast and straightforward to convert into cash. That said, if you’re looking to invest £100K over a short period (six months or less) and make a potentially decent profit, CCEs could be a solid option.
In my professional opinion, here are the best types of CCE you can invest in:
- “Easy access” High-yield savings accounts: These are bank accounts that typically offer higher interest rates than your average savings or current account. The reason these accounts are “easy access” is because you can withdraw funds at almost any time (although some providers do have annual withdrawal limits. According to Money Week, you can currently earn up to 5% interest with certain easy-access bank accounts.
- Money market funds (MMFs): MMFs are types of mutual funds where you can invest in a portfolio of short-term debt instruments like short-term government bonds. MMFs usually offer better yields than savings accounts and they come with a higher level of liquidity.
- Fixed-rate savings bonds: You can deposit a lump sum into these types of accounts for a fixed period (6 months, 1 year, 2 years or 5 years) in exchange for a guaranteed, fixed interest rate for your agreed term. Fixed-rate savings bonds are attractive CCEs as they’re relatively low-risk, offer reliable returns, and are FSCS protected.
Risk level: With the right advice and due diligence, CCE investments are considered medium to low risk and can offer reliable returns over fixed periods of time.
If you’re considering how to invest £100K in the UK, peer-to-peer lending could be a lucrative option.
According to recent data, the UK peer-to-peer lending industry is now worth over £376.6 million and projected to hit £397.7 million by the end of 2025.
Why? You can potentially achieve returns of up to 5 to 10% per year which equates to around £5,000 to £10,000 based on a £100K investment.
Speaking to the Alternative Credit Investor, easyMoney CEO Jason Ferrando explains that P2P lending certainly has its perks for potential investors:
“We can attribute a lot of P2P lending’s success to the fact that it’s accessible to investors of all shapes and sizes, from those with a few hundred quid to put to work, all the way up to uber-wealthy investors who are putting in millions of pounds.
We also have to acknowledge the emotional impact of the past couple of years of economic turmoil. People who want to invest are seeing terrible instability and unpredictability down traditional investment avenues. At the same time, we’re seeing UK property remain strong in the face of adversity which means it’s always a good and reliable investment play.”
– Jason Ferrando
One of the best and most secure ways to explore this branch of investment is through regulated P2P lending platforms like Zopa or Funding Circle.
You may have to pay a nominal commission or fee, but your funds will be protected and you’ll benefit from platform-based advice or support.
Risk level: P2P lending is generally seen as a medium to high risk style of investment. The main risks include your borrowers or ‘peers’ having to default or frequent fluctuations in market interest rates.
While this may be the case, by investing through a reliable platform and seeking professional consultancy, I still consider P2P lending as one of the best ways to invest in £100K.
Did you know? Research from Zoopla shows that the average UK rental yield is 5.6%. Plus, according to ONS data, average UK property prices rose a respectable 4.9% from January 2024 to January 2024 alone.
In my professional opinion, building a property portfolio is the very best way to invest in £100K in the UK.
Making sound property investments and building a varied portfolio over time will ensure you connect with the magic combination of capital appreciation and a monthly income from your 100K investment.
Securing properties in up and coming areas with solid rental demand means you can make a regular income as a buy-to-let landlord and when you decide to sell your asset, you’ll likely make a healthy profit.
If you’re looking to succeed with UK property investment and give your £100K the boost it deserves, here are three of my essential tips:
- Invest in a buoyant buy-to-let market: Currently, properties in North-East England offer among the best rental yields in the country. Areas including Liverpool, Bristol, and Plymouth are also potentially lucrative and boast a strong rental demand. Do your research, set your budget, and invest in a region with a buoyant buy-to-let market. That way, you’ll enjoy a reliable rental income and increase your chance of buying assets that consistently increase in value.
- Source below market and off-market: By finding off-market properties that you won’t find on third-party platforms like Rightmove, you’ll increase your chances of finding investments that suit your exact needs but with far less competition. Connecting with below market value properties, you can minimise your investment costs, potentially increasing your profits in the process.
- Use bridge financing to accelerate your portfolio: With a carefully considered approach to bridge financing, you can secure more property investments and accelerate the growth of your portfolio by securing short-term loans to acquire new investments. Bridge financing is essentially like ‘recycling your funds’ several times a year to secure lucrative opportunities. It’s effective, but it does come with its share of risk, as our in-house expert Jonathan Christie explains:
“Bridging finance allows you to spread your money across several properties. Instead of purchasing just one property with your £100k investment, you could look at spreading it across three, using bridging finance to make up the difference, and refinancing out as soon as you possibly can.”
“The reason it’s so beneficial is that it allows you to speed up the process considerably. If you move quickly enough, with cash, you can probably buy 3 properties in a year, and refinance out, but on a bridge, you could be looking at more like 9. Although it’s obviously dependent on a lot of other external factors as well.”
– Jonathan Christie
Risk level: The risk level of property investment can vary greatly depending on market values and rental demand. While there’s not as much ‘liquidity’ in property compared to other forms of investment, with a structured strategy, it’s the most impactful way to invest £100K.
How to invest £100k: a comparative summary
| Investment type | Level of risk | Potential returns |
|---|---|---|
| Stocks and shares | Medium to high | An average of 9.64% for stocks and shares ISAs. |
| Bonds and fixed Income securities | Low to medium | High-yield bonds currently sit at an average of 8%. |
| Cash and cash equivalent (CCE) investments | Low to medium | Returns vary depending on the risk level you’re willing to accept with your investment. According to this HSBC calculator shows that you can earn a healthy return on investment (ROI), but this will largely depend on market conditions. |
| Peer-to-peer (P2P) lending | Medium to high | Average returns can vary from around 9% to 15% in stable market conditions. |
| Property investment | Fluctuates but has the potential for high returns | Average buy-to-let rental yields in the UK are 5.6%. Not only can building a robust portfolio provide a healthy and reliable income stream, but as property prices appreciate in value year on year, you can enjoy big returns by selling select investments at opportune times. |
NOTE: The information included in this table is here as a guide. Your investment returns will vary according to market conditions. Always seek professional investment advice before making a commitment if you’re unsure.
Disclaimer
This advice is based on our experience and knowledge as property investment professionals and is designed to help guide your decisions. However, we’re property professionals and not legal advisors or general investment experts. You should always seek assistance from a registered broker or field expert before making any firm commitments or decisions.
We boast a growing portfolio of quality assured properties across the UK, many of which come in at around 15 to 20% below market value.
You won’t find these properties on your well-trodden third-party property listing marketplaces and we have a big range of properties to suit every goal or budget. Contact us today—we look forward to helping you kickstart your journey and invest your £100K wisely.
There are several effective ways to invest £100K in the UK, including stocks, CCEs, fixed income securities, and peer-to-peer lending. However, if you’re looking to secure assets that appreciate in value over time, provide a monthly income from your £100K investment, and provide potentially excellent returns, property is the most effective option.
If you’d like to earn a regular income from your £100K investment, you should go with an option that offers a frequent form of payment. You can achieve a regular income from fixed income securities as you’re essentially acting as a lender. However, the best form of income from a £100K is from being a buy-to-let landlord, particularly due to the fact that average rental yields in the UK currently stand at 5.6%.
To save £100K at a steady rate, you should place your current funds in a high-yield savings account or set up a regular investment plan. Starting off with a sensible mix of fixed income securities or CCEs will also increase your likelihood of saving up £100K more consistently.
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