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Would you heed a ‘wealth warning’ on fund charges? 15k savings in cash, shares or property? Given that the interest I am earning is so little, it doesn’t seem a good idea to have money sitting in the bank. Are there ways of investing part of this money for higher returns? I keep hearing the higher the risks, the higher the return will be. I can’t take risks as my savings are all I have. Would it be wise to invest in property, for example, buying a share of a property or something like it?

Are there schemes where different people can get together to buy properties? I keep thinking that while I have this money I should do something clever with it. End of 2011 and the beginning of a New Year is an apt time to rethink your savings and investments. Interest rates have been in the doldrums for some time now and with inflation eating away at any possible income I asked one of our independent financial advisers to comment. A cash Isa works very well for those who want certainty of the capital. The interest is tax-free however, even with this, over time the effect of inflation will reduce the spending power of your savings.

Within these options you can invest in individual shares or, as many people do, opt for a fund. Funds, such as unit trusts and OEICs, allow you to entrust the choice of underlying investments to a professional fund manager. They pool your money with that of other investors, which enables you to spread your investments. One type of income generating fund that has stood the test of time is equity income. Equity income is investing in the purest sense. The best companies will find ways to increase revenue over and above the rate of inflation, or reduce costs, significantly increasing their profits. These are the types of companies equity income investors seek.

Equity income funds provide the potential for not only a growing income but for some capital growth, giving investors a hedge against the effects of inflation on their savings and investment capital. Please note the value of these funds will fall as well as rise and past performance is no guide to the future performance. This income or yield from an equity income fund is paid net of basic rate tax, and if you invest in an Isa there is no further tax payable on this income, whatever your tax rate, or capital gains tax to pay when you cash in. You can transfer the value of your cash Isas to stocks and shares Isa without losing the tax benefits. However once transferred, you cannot, under current rules, transfer them back to a Cash Isa. It is important to say that you should not invest in a stocks and shares Isa for less than five years or if you are uncomfortable with the ups and downs of the stock market.

That said, I would expect a better return than from a cash Isa over time although this is not guaranteed. Property investment can work very well, however the transaction costs are high and there are no guarantees. Buying property direct is one of the least tax efficient ways to invest. You can invest in a property fund within an Isa, although these are usually commercial property funds not residential property.

These are more liquid than buying a property direct and allow investors with more modest means the ability to pool their resources. Certainly my view is that property markets will be flat at best in 2012 and probably will fall, the exception being in London. Where will the FTSE 100 end 2012? To expand on Danny’s point, when most people consider investing in property, they think of buy-to-let and while the tales of easy riches that abounded during the property boom have died away, this still remains a very popular form of investment. The benchmark deposit for a decent buy-to-let mortgage deal is 25 per cent of a property‚Äôs value and ideally you need more to get a better rate. And that doesn’t factor in the other associated costs, mentioned above.