There should be some potential for growth there too or the effects of inflation will diminish the investment’s value.Who should invest for growth? Younger investors, in particular, may not need an income from their investments if they have cash left over each month after paying the bills and the mortgage. And anyone who wants to build up a lump sum needs an investment vehicle that lets cash grow.Investing for growth tends to be more risky than investing for income. But as you have a longer period of time, you can afford to take more risk.The Barclays Equity Gilt study shows that returns are higher on the stock market than in bonds or cash. The difference is considerable: £100 invested in 1918 would be worth £7,425 today if it had been left in a savings account, £12,843 if invested in gilts or £1,238,614 in equities.The first priority for growth should be to use up your tax-free allowance by putting £7,000 this year into a maxi ISA.

Mini cash ISAs are a popular choice as charges and risk are low but they bring negligible returns in the long term.The risk-averse should consider with-profit bonds as they smooth out returns, protecting investors from fluctuations. If you are looking to invest for 10 years or more you can afford to be more adventurous as the risk of volatility is reduced.Technology stocks are worth considering. But rather than buying speculative dot com stocks, opt for a specialised fund like Henderson Global Technology, Aberdeen Technology or City Financial Technology Growth. Some technology stocks look over-valued so limit them to 15 per cent of your portfolio.. Investment trends can change; what is fashionable one moment may not be a few months later. This is certainly true of insurance, and in particular endowment policies.

Investment trends can change; what is fashionable one moment may not be a few months later. This is certainly true of insurance, and in particular endowment policies.
In recent months, endowments have taken a battering as a number of home owners using them to pay off the capital on their mortgages have been hit by underperforming policies. Low interest rates and over-optimistic growth projections from mortgage firms mean many endowment holders must now increase contributions to pay off their home loans. Many providers now refuse to sell them.So have insurers got anything to offer investors looking for growth? There is a wide range of insurance investment products which are either regular savings plans such as endowments, or single premium plans like with-profit bonds.The maximum investment plan (MIP) is another regular premium insurance policy. It works along similar lines to endowments and used to be popular with people investing for growth But as with endowments, there has been a slump in new sales. The minimum investment period is 10 years.”You pay in, say, £500 a month and basic-rate tax is paid within the fund.

When the fund matures you have no further tax liability, which can be good news for higher-rate taxpayers,” says Martyn Laverick, director at Chartwell independent financial adviser But it is not all good news. Despite the tax breaks, you lose elsewhere as MIPs have high charges.Generally, charges are the sting in the tail of insurance company investment products. Rates hover around 6 per cent, compared to typical unit trust charges of around 3 per cent. This money largely goes on commission to the adviser who recommended the bond – and it comes out of your pocket.Charges are also imposed disproportionately at the start of your investment, using a practice called front-end loading.