Thinking about investing? There are compelling reasons for moving at least some of your money away from standard savings accounts and into the stock market. There are also risks, but over the long term the rewards can be better.

Many people are put off by the idea that you need to be wealthy to start investing, or over a certain age. But even if you can only afford to set aside £50 a month, it is worth considering. And while there are important factors to consider before you start, it is rarely too early, or too late, to take the first step.

For most people, choosing funds will be a better option than buying shares (also known as equities or stocks) in an individual company. Funds let you spread your risk, and give the job of buying and selling shares to a fund manager.

We asked some experts for tips on where to invest £50 a month at different life stages.

Before you start

If you haven’t already, it is worth building up an emergency fund that would cover three to six months of essential outgoings that you can easily access in case of unexpected costs.

After that, consider your investment goal, the time horizon you are looking at, your appetite for risk and the level of return you are ideally looking for, says Russ Mould, the investment director at the platform AJ Bell.

This should help you decide on things such as the most suitable “asset classes” (the types of investment your money goes into) and which company to invest through.

Before we go on, it is worth stressing that while your age is useful to consider when investing, it should not be the only factor in your decision-making.

“Age can be a useful rule of thumb, but it’s ultimately the timeframe for needing the money – and the investor’s tolerance for volatility – that should determine how much risk to take and what types of funds to use,” says Jason Hollands, managing director at the platform Bestinvest by Evelyn Partners.

In your 20s

Your 20s can be a volatile time as you start your career and figure out your life goals, so it is vital to build up cash savings. For these, consider an instant-access cash Isa.

Daniel Hough, director and wealth manager at RBC Brewin Dolphin, warns that cash kept for a long period will be eroded by inflation over time.

He says that if you think you might need to access your money within three to five years, you could invest in a “cautious” fund via a stocks and shares Isa – but growth potential may be lower and you could lose money, depending on investment performance and market conditions.

Younger investors can benefit from time in the market and may consider a growth portfolio, such as the Evelyn Smart Growth Fund, with at least two-thirds invested in shares, according to Hollands.

He says people should not target a specific return as that is “impossible to deliver consistently”, but they should aim for at least 2.5% above inflation (and more than that for a high-risk portfolio).

You should use your goals to determine your appetite for risk. For example, someone in their 20s who is saving for their retirement may have a higher risk appetite than someone in that age group who is planning to buy a house in five years’ time, says Dan Coatsworth, head of markets at AJ Bell.

One option is a ready-made portfolio that fits with your risk appetite. These are offered by lots of investment apps and websites, and they invest in managed funds that are “rebalanced” (adjusted) regularly.

As you get nearer to your goal, you should consider lowering your investment risk.

Alternatively, someone with a higher risk appetite might consider a global equity tracker fund for their £50 monthly investment, “as that would give them diverse exposure to different sectors and geographies”, says Coatsworth.

Among the most popular global tracker funds with AJ Bell customers in April this year were the Fidelity Index World Fund and HSBC FTSE All World Index Fund, with ongoing charges of 0.12% and 0.13% respectively.

While Hollands agrees that an index tracker or global equity fund are options, he warns that “a high-risk equity-heavy strategy could backfire” over a short period. A “multi-asset fund” – which combines various investments such as shares, bonds, property, cash and alternative assets such as gold – may be more appropriate.

Those not wanting full exposure to the stock market may want to consider Vanguard’s popular LifeStrategy range of funds. Each of these has a different mix of shares and bonds – for example, one puts just 20% of people’s money into shares and 80% into bonds, while another invests all the money in shares. Bonds are issued by governments and companies that want to borrow money from investors in exchange for a fixed interest rate.

Meanwhile, for investors with shorter-term or medium-term goals, Hollands says that Personal Assets Trust, a large British investment trust, may be worth considering. It invests in things such as shares in large, well-established companies, gold-related investments and government bonds.

In your 30s

In your 30s you will face important life goals at the same time as your earnings typically rise. Investing can be overwhelming, which is why “best fund” lists can be a useful starting point, although you should always do your research.

Many investment companies, such as Bestinvest, have their own lists.

If you have started a family, it is worth thinking strategically if you want to save for university fees. If you can afford to start saving £50 a month from your child’s birth, you should have time to build up a decent lump sum.

Coatsworth says parents often start saving for university when their child starts secondary school. While this is a shorter timeframe than starting from birth, it means you still have about seven years to build up a decent pot.

You can invest via a tax-free junior Isa, which allows anyone to pay in up to £9,000 per tax year, but the money belongs to the child, who can access it when they turn 18.

Coatsworth says a parent who starts investing for their child soon after birth may be able to take higher levels of risk. On AJ Bell’s “favourite funds” list, Polar Capital Global Technology had (as of earlier this week) delivered the highest three-year return, at 53.8%. It has a risk rating of six out of seven, however, so it is not for people who want to invest cautiously.

In your 40s

The “sandwich generation” – those typically aged between 40 and 60 – are among the least likely in the UK to invest as they care for ageing relatives and dependent children simultaneously. So if you are not investing yet, you are not alone.

“Retirement is still likely 20 to 30 years away, so growth remains important, and equities should typically form the backbone of a portfolio,” says Hollands.

It is worth considering a fixed-income fund, which mainly invests in government and corporate bonds, or a multi-asset fund, to smooth out volatility.

You might want different pots of money for different goals. Hollands suggests using Isas for your pre-retirement goals due to their flexible access.

During your 40s, other potential uses for your money include overpaying your mortgage or boosting your pension, the latter of which will be vital if an early retirement is something you are thinking about.

In your 50s

If you have an eye on retirement, boosting savings and investments should be a priority.

When it comes to money you already hold in an Isa or pension, it can be tempting to reduce risk in order to protect your nest-egg – for example, by moving away from shares. But some experts argue that with the higher long-term returns that shares have consistently delivered, this could be a costly error.

Hollands says shares should not be abandoned, but over-50s may choose to spread where they invest their money, using bonds, absolute return funds and gold. Absolute return funds are designed to give you a profit on your investment, even when the stock market is falling.These can have high fees, however, and you can miss out on some of the upsides when the stock market is doing well.

Over-60s

As you approach retirement, you may face competing financial goals, such as clearing debt or supporting your children or grandchildren.

Hollands says people often shift their focus to preserving the wealth they have already built up and generating a regular income, instead of trying to continue growing their money. This can be risky as people are living longer, so some could run out of money.

If you are looking for regular income, an investment trust may help. Unlike unit trusts, investment trusts are able to hold back up to 15% of the income generated from their investments, and can use these reserves to fund payouts to investors during lean spells.

The website of the Association of Investment Companies, the trade body for investment trusts, lists a number of “dividend hero” trusts that have consistently increased their dividends for at least 20 years in a row.

The City of London Investment Trust, Bankers Investment Trust and Alliance Witan are among those that have increased their dividends for 59 years in a row, but of rises are not guaranteed.