The increased cost of energy bills and rising inflation has led to us all look to alternative ways to help combat the ever-escalating cost of living crisis – and this includes taking a closer look at investments.

With savings rates at a measly 0.5pc and inflation now at more than 5pc, holding all your savings in cash and taking out monthly amounts is not a sensible way to top up your salary or pension. 

To get an inflation-beating return, savers must turn to investments – but structuring an investment portfolio so that it pays a monthly salary is not always straightforward. 

Stocks normally pay dividends twice or four times a year while bonds tend not to be available for DIY investors to buy directly. Some investment funds keep dividends for themselves and reinvest them, while others distribute them only a couple of times a year.

But there are ways to get a regular income. These are the best, according to experts.

How to get a monthly income from your investments in 2022

Mixed investment funds

A simple answer is to buy a “multi asset” or “mixed asset” fund – an investment strategy that has free rein to buy stocks, bonds, commodities, real estate and infrastructure assets, all in a bid to deliver a high, reliable income. 

Tom Stevenson of Fidelity International, an investment firm, said this “one-stop shop” investment tool was a great starting point because a professional investor, paid to scour the investment universe for income, would do a better job than the typical DIY investor at finding investment income. 

He said: “This is the best place to start, as a professional will build a balanced portfolio and not invest too much in a single area. Typically, these funds aim for an income of 4pc to 6pc a year, over a five-year investment cycle.” He said the £1.2bn Fidelity Multi Asset Income fund, which charges 0.89pc a year for its “income” share class, paid monthly income to investors and yielded around 4pc. 

Darius McDermott of Chelsea Financial Services, a fund shop, agreed that DIY investors were best served by buying a multi-asset fund rather than trying to construct a portfolio of funds that would pay out on a monthly basis.

“The mixed-asset strategy we run for clients takes a huge amount of work. It buys funds that invest in warehouses, digital infrastructure and music royalties, alongside your traditional stocks and bonds, to give a yield of more than 4pc. Even the most enthusiastic hobbyist would struggle to get this amount of income diversity and have it pay them every four weeks,” he said. 

Another option is the Artemis Monthly Distribution fund. Recommended by the fund shop Interactive Investor, it has about 60pc invested in bonds and 40pc in stocks. It invests globally and yields 3.4pc. 

Dzmitry Lipski of Interactive Investor said: “The fund has generated strong performance and provided robust income to investors since its launch, ranking in the first 25pc of funds in its peer group.”

Bonds

When investors think of income they often turn to bonds, a means by which companies or governments pay a regular income to investors in return for a loan of cash.

However, as interest rates have fallen, so have the yields on bonds. Now only riskier bonds, such as those issued by emerging-market governments or low-quality companies, known as “junk” bonds, can beat the inflation rate. 

Mr Stevenson said: “Now is not a great time to buy bonds. Yields are low, but central banks are also about to raise interest rates, so investors will sell bonds as they will be able to get a better return when rates go up.”

Nevertheless, there are plenty of bond funds that pay savers monthly. One strong option is the £1.3bn Baillie Gifford Strategic Bond fund, which charges 0.52pc and currently delivers a 3.3pc yield by owning debt from Netflix, Virgin Media and the Co-operative Group, among others. It is “elite” rated by FundCalibre, a fund research firm. 

FundCalibre said: “The managers focus on picking bonds rather than trying to second guess where interest rates will go. Trying to second guess central bankers and forecast interest rates has been the undoing of many bond managers, so we like this philosophically pure strategy that has been successfully implemented by a high-quality investment team.”