5 Top Alternative Investments in the UK 5 Top Alternative Investments in the UK

Looking for new ways to invest your money? Rather than putting your savings into the usual stocks and shares, ISAs and bonds, try looking at some creative alternatives. From buying fine wines to crowdfunding and lottery businesses, here are five top alternative investments.


1. Crowdfunding

Rather than rely on venture capital trusts and angel investors, many new businesses are using crowdfunding to get off the ground. In fact, UK platforms such as CrowdCube and Angels Den have raised over £72 million from investors this year. Crowdfunding platforms allow investors to peruse thousands of opportunities that traditionally, only venture capital firms had the chance to invest in.

So how does it work? Businesses simply launch a crowdfunding campaign that typically offers large numbers of people the chance to invest in return for a small equity share. There’s also the opportunity to make a big return should the company get bought out or go public. Recently, award-winning honey beer brand Hiver used CrowdCube to raise £350,000 to support retail plans, sales and marketing.

2. Lottery business and affiliates

It’s been reported that up to 70 per cent of UK adults play the lottery regularly and the industry generated almost £3.7 billion in 2015-16. Given those statistics, large society lotteries that make over £250,000 per year are a great investment opportunity. However, bear in mind that under UK law, lotteries must give at least 20 percent of their revenue to good causes. The Health Lottery is an example of a successful large society lottery, donating at least 20p from every £1 ticket sale to health-related causes across the UK.

You can also invest in the lottery industry through affiliate schemes, which can provide a lucrative source of passive income. There’s some work involved in setting up a website filled with lottery-related content and signing up to affiliate schemes, but this can easily be outsourced. Once the site is up and running you’ll make money every time a visitor from your site clicks through your affiliate links, signs up to a lottery and starts playing.

3. Fine wine

The value of wine has risen steadily since 2013 and increased by over 20 percent in 2017, making it a reliable investment provided you know what to buy. To be successful, you need to learn how to identify quality wines, so go on wine tasting courses and make connections with other investors. You can also use vintage reports that provide vital information such as grape type, region, harvest conditions and growing seasons to help you select wines.

New apps make investing in wine even easier, allowing you access to a huge database of wines from around the world with key information, ratings and reviews. It typically takes around five years to see a positive return, but if you’re interested in the industry, fine wine can be a lucrative alternative investment opportunity.

4. Alternative property investments

Property is traditionally a very safe UK investment opportunity, but this is changing due to Brexit uncertainty and new tax rules. However, there’s still money to be made by investing in alternative property markets such as co-working spaces, student housing and care home units. These types of properties often have high yields and many bypass tax reforms because they’re either classed as commercial properties or have lower values.

Another alternative way to invest is to buy a share of a property with other investors or use a pension pot to purchase a buy-as-you-let property. This option does come with drawbacks as you’ll need to make sure the rent covers the mortgage and costs of maintaining and managing the property. However, buy in the right location and buy-to-lets can still provide an income and gain value over time.

5. Peer-to-peer lending

Peer-to-peer lending allows you to loan money to people through online platforms, without a bank. These agreements are arranged through peer-to-peer lending platforms such as Zopa, Prosper and Lending Works. These peer-to-peer companies are typically FCA regulated and they organise credit and ID checks as well as set interest rates, collect payments and pay your returns.

The advantage of peer-to-peer lending is that you can set higher interest rates than those offered by ISAs and savings accounts. You can decide who you loan to and spread the risk by lending to many people, investing as little as £10 at a time. It’s also possible to withdraw from loan agreements if you need to free up your money.

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