3 cheap UK shares to consider buying to hold forever

If I had to choose UK shares to buy now, and not be allowed to sell for at least 40 years, that could sure tighten my focus.

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When I buy UK shares, I want those I can own for at least a decade. But I was just called a short-termer, by someone who says he buys stocks to hold for 40 years.

He’s in his 20s, so he has an advantage on me there.

Which UK shares might I buy today that I reckon I’d have the best chance of wanting to hold for ever?

Easy choice

Tesco (LSE: TSCO) seems like an easy pick. Food and drink (and clothing, household goods, and the rest) put it in the top tier of essentials providers.

The sector is super competitive, and we’ve seen threats of upset a few times. In the past decade, I’ve been concerned about the march of Lidl and Aldi.

I still see that as the biggest fear in the coming years. Over the very long term, everything will change.

But Tesco just keeps on taking the market share top spot. And its 4% dividends can mount up over the decades. So why haven’t I bought any?

Perhaps because I don’t look quite that far ahead. Maybe I am a short-termer, with my puny 10-year outlook.

Buy a bank

Finance is another key essential. But picking a bank that I could then just close my eyes and forget about is a tough call.

I have Lloyds Banking Group shares, and that’s a long-term hold for me. But Lloyds has changed a lot even just since the banking crisis. Out went the international banker of old, and in came the biggest UK mortage lender.

What changes will we see in the sector in the next 20 years? With crises, buyouts, mergers… there might be a lot.

Which is top?

The one I think could be the most stable in the very long term? Probably Barclays, which has held on to its business model through thick and thin. That means more global and investment banking risk than the others though.

The forward dividend yield has dropped to around 4% now the share price has risen. But a forecast price-to-earnings (P/E) ratio of only seven looks cheap.

Oh, and forecasts drop the P/E to under five by 2026. I know that’s not 40 years ahead, but it’s the best I have.


National Grid‘s tempting. And I do think it could be a good long-term buy, with a 5% dividend from a stock in a monopoly position.

But what will the energy business see in the next 40 years? Technology, turmoil, upheaval…? It’s anyone’s guess what might happen to the Grid by then.

I might still buy for a decade though, with that short-term approach of mine.

Investment trusts

Another way is to go for investments trusts, which themselves hold top-drawer UK stocks.

City of London Investment Trust, Bankers Investment Trust, and Alliance Trust have all raised their dividends for 57 straight years. And a few others have done it for at least 50 years.

If the dividend rise doesn’t come off one year, things might turn sour. But they have to be worth considering for the serious long term.

Those track records almost make me feel like a day trader.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft has positions in City Of London Investment Trust Plc and Lloyds Banking Group Plc. The Motley Fool UK has recommended Barclays Plc, Lloyds Banking Group Plc, and Tesco Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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