Why invest in a stocks and shares ISA or unit trust?

• Historically greater returns over 5-10 years

  If you're looking to make the most of your money, it's worth taking a closer look at what the stock market could offer. Stock market investments have historically provided greater returns than traditional savings accounts, though there are no guarantees that they will do so in the future.

  Over short periods, this type of investment can often be unpredictable. But as the chart shows, historically, day-to-day changes in the value of stock market investments become less of a problem if you're prepared to invest for five to ten years when you could benefit from general trends. However there is no guarantee that this performance will continue in the future.

  The longer the period of time that you're prepared to invest, the easier it should be to use the classic investment principle: buy when the market is low and sell when the market is higher to profit from your investment. This graph shows how well the FTSE All-Share Index has performed over the last 10 years compared to a typical savings account and inflation.

  

• Managed investments save you time, money and worry

  Buying and selling equities yourself can be expensive, risky and time consuming. What to buy, when to buy and sell can take a lot of time and worry.

  Unit trusts by comparison, let you pool your money with thousands of other investors and spread it across a larger number of investments. That way the dealing costs are shared and all the administration and paperwork is done for you, at a tiny fraction of the expense of doing it yourself.

  And because you're investing into lots of companies, you're spreading and reducing your risk. So you get to benefit from stock market performance without having to limit yourself to a few companies.

  If you choose a managed fund over one that tracks an index, you'll also have an expert keeping an eye on the market and making those tough investment decisions.

• What is a unit trust?

  A unit trust (usually described as a fund) simply pools all investors' money to buy investments of various kinds, according to its objectives. That fund is divided into units of equal value and the number of units you buy represents your share of the value of the fund.

  You may want to consider investing directly into a unit trust if you have already used up your ISA allowance for this tax year. There are no limits to the amount you can put in a unit trust.

  Unit trusts are not tax free, and depending on your circumstances you may be liable for income tax on any income generated and capital gains tax on any gains over current allowances.

  Whichever route is right for you and whether you're investing a lump-sum or regular monthly savings, your minimum investment into each of the funds is £20. But we would encourage you to invest more than this, if you're looking to make a meaningful savings commitment.

• Why Nationwide?

  Fund choices - There are six different funds provided by Legal & General to choose from including income and growth funds, and you can select one or more of these for your investment as long as you invest at least £20 in each. Check out the Funds section for further details.

  Charges - There are no upfront charges and low on-going fees.

  Access to your money any time - These are long term investments and should ideally be left untouched for at least five years. Although the value of these investments will fluctuate daily with market conditions, the risk of you getting back less than you paid may reduce over the longer term.

  Keeping you informed - Legal & General will send you a statement every six months telling you how many units you have and the current fund price. You can find out the value of your investment by checking the fund price on our website.

• Stocks and shares ISA or unit trust?

  Legal & General's stocks and shares ISAs invest in the same funds as their unit trusts.

  The government allows you to invest up to £7,200 per tax year in a stocks and shares ISA which has preferential tax treatment. Thus if you are interested in investing in stocks and shares and have unused ISA allowance you may wish to consider this first.