Always remember that investments can go down as well as up in value, so you could get back less than you put in. A rule of thumb is to hang on to your investments for at least five years to give them the best chance of providing the returns you are hoping for.

Best Stocks and Shares ISA

Updated On: Oct 1, 2021
Best Stocks and Shares ISA 2021

Contents:

What is a Stocks and Shares ISA

A stocks and shares ISA is a tax-free savings account which every adult aged 18 and above can use to buy, sell, and hold investments such as shares, bonds, and funds. This tax year, you can invest up to £20,000 in one stocks and shares ISA or split the money between your stocks and shares ISA and other ISAs.

A stocks and shares ISA is also called an investment ISA.

How do Stocks and Shares ISAs work

You can open a stocks and shares ISA with investment platforms such as banks, building societies, stockbrokers, fund supermarkets, robo advisors, and other financial institutions.


Once your ISA is open, you will be able to invest up to £20,000 in a wide variety of assets including individual stocks and shares, corporate and government bonds, and funds.


And depending on your investment platform, you'll have the option to either select and manage the individual assets that make up your portfolio (self-select ISA) or choose from a range of ready-made portfolios (robo advisor and managed ISA).


You get a new ISA allowance (£20,000) at the beginning of each tax year. Any unused allowance expires at the end of the tax year, and you cannot carry it forward.


When you are ready to invest, you can choose between making a lump sum investment and/or making regular or ad hoc contributions throughout the tax year.

Here are a few examples of the types of assets that can be held within an ISA:


  1. Individual Stocks and Shares: When you buy a share, you own a small unit of a public company. So, if you bought a share in Apple, for example, you will become a part-owner of Apple. If it performs well, you will benefit from its success. If it does not, you may lose some money. Shares are also called equities or stocks.
  2. Corporate Bonds: When you invest in a corporate bond, you are lending money to a company in return for interest.
  3. Government Bonds: When you invest in a government bond or gilt, you are lending money to a government in return for interest.
  4. Funds: Instead of buying individual stocks and shares, bonds, or other assets directly, you can choose to invest in a fund. A fund pools money from you and other investors, and a specialist fund manager invests this money in a variety of assets including shares, bonds, properties, and commodities (gold, oil, agriculture, etc.). Most people, including experienced investors, use funds when investing.

Stocks and Shares ISA Charges

Investment platforms charge several fees for using their services. The main fees are the annual platform fee, fund management fee, trading fee, and transfer out fee. Depending on your investment provider and how you choose to invest, there might be some other charges.


  1. Annual Platform Fee:‍‍ The investment platform charges this for providing a platform for you to invest. It is usually displayed as a percentage of your investments or a fixed fee.
  2. Fund Management Fee: It is also known as Ongoing Charges Figure (OCF) or Total Expense Ratio (TER). This is the fee paid directly to the fund manager and represents the actual cost of your investments.
  3. Trading Fee: It is also known as a dealing fee. This is the fee for buying and selling funds, shares, and other types of investments on a platform.
  4. Transfer Out Fee: It is also known as an exit fee. It is the fee you pay for moving your investments from one provider to another.

Best Stocks and Shares ISA

Compare some of the best Stocks and Shares ISA platforms in the UK below. We have divided them into two categories - Self-select ISA (DIY) platforms and Robo-advisors.

Best Self-Select ISA (Do-It-Yourself Platforms)

Self-select ISAs give you the freedom to select the specific investments that make up your portfolio. And depending on the provider you choose, you'll have the option to either select individual shares, bonds, funds, etc., and manage your portfolio yourself or choose from a range of managed and ready-made portfolios.


Compare some of the best self-select ISA platforms below. To make sense of the charges, use our full price comparison table.


Capital at risk. ISA rules apply. Other charges apply.

Interactive Investor - One free trade every month; Lots of research

Interactive Investor
Account Type
DIY & Ready-made
Dealing Fee
£7.99 - £3.99
Annual Platform Fee
£120 - £240
Minimum ISA Deposit
£25

Interactive Investor has more than 40,000 investments to choose from, including UK and overseas shares, funds, investment trusts, and ETFs. You get a free trade every month, which you can use to buy or sell any investment. It is free to top up your ISA each month, and there are no trading fees with its regular investing service. It also has several ready-made funds and expert ideas to make it easy to choose investments. Interactive Investor also offers Trading Account, SIPP, and Junior ISA.

Capital at risk.

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AJ Bell Youinvest - Mid-price range; Lots of investment options

AJ Bell Youinvest
Account Type
DIY & Ready-made
Dealing Fee (Online)
£1.50 (Funds)
£9.95 - £4.95 (Shares)
Annual Platform Fee
0.25% - 0% (Funds)
0.25% (Shares - max £3.50/month)
Minimum ISA Deposit
£500 lump sum
or £25 per month

AJ Bell Youinvest has thousands of investments to choose from, including shares, funds, investment trusts and ETFs. And you can manage them both online or through the mobile app. If you need help choosing, it has four ready-made portfolios and other investment ideas. AJ Bell Youinvest offers Stocks and Shares ISA, Lifetime ISA, Junior ISA, Dealing Account and SIPP.

Capital at risk.

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Hargreaves Lansdown - Lots of investment options, research and tips

Hargreaves Lansdown
Account Type
DIY & Ready-made
Dealing Fee (Online)
£0 (Funds)
£11.95 - £5.95 (Shares)
Annual Platform Fee
0.45% - 0% (Funds)
0.45% (Shares - max £45/year)
Minimum ISA Deposit
£100 lump sum or £25 per month

Kickstart your investing with an award-winning ISA. Hargreaves Lansdown has thousands of investments to choose from, including UK and overseas shares, funds, investment trusts, and ETFs. Choose your own investments with expert research and ideas to help you, or simply pick a ready-made portfolio. Manage via website, app or phone. Hargreaves Lansdown also offers Lifetime ISA, Junior ISA, Fund and Share Account, and SIPP. These services are intended for investors happy at making their own decisions.

Capital at risk. Other charges apply.

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Fineco Bank - Low cost; Lots of investment options

Fineco Bank Logo
Account Type
DIY & Ready-made
Dealing Fee
£0 (Funds)
£2.95 (Shares)
Annual Platform Fee
0.25% (Funds)
0.25% (Shares - max £2.95/month)
Minimum ISA Deposit
£25

Fineco Bank is one of Europe’s largest banks, with 20 years of leadership history in brokerage and over 30 million orders processed every year. Access 26 global markets and trade over 20,000 financial instruments worldwide on a single account. Invest and trade directly in GBP, EUR, USD, Swiss Franc and 20+ currencies. Fineco Bank offers a Trading Account and Stocks and Shares ISA. Capital at risk.

Promo: Get your Fineco ISA by 31st December, and you won't pay any ISA platform fee until the end of 2021/22 tax year. Terms and conditions apply.

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InvestEngine - Low cost; Commission-free ETFs

InvestEngine Logo
Account Type
DIY & Ready-made
Third-party ETF Costs
0.15% - 0.25%
Annual Platform Fee
Free - 0.25%
Minimum ISA Deposit
£100

InvestEngine is a UK investment platform providing ready-made and commission-free DIY investments. Users can invest in ETFs through a Stocks and Shares ISA, personal account or business account. With InvestEngine, there are no setup fees, dealing fees, ISA fees or withdrawal fees. If you choose the DIY Portfolio, you can invest in ETFs commission-free. InvestEngine offers Stocks and Shares ISA, Personal Investment Account and Business Account (for companies). Capital at risk.

Promo: Click the button below to access a £50 welcome bonus. Terms and conditions apply.

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Vanguard - Low cost; No dealing fee

Vanguard Investor'
Account Type
DIY & Ready-made
Dealing Fee
£0
Annual Platform Fee
0.15% (max £375)
Minimum ISA Deposit
£500 lump sum
or £100 per month

Vanguard is a popular low-cost investment platform with over 70 funds. You can only invest in its own funds, and it does not offer share trading. It gives you the flexibility to choose a ready-made portfolio or build your own. Vanguard's products include SIPP, Stocks and Shares ISA and Junior ISA.

Capital at risk.

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To make sense of the charges, use our full price comparison table.

Best Robo Advisor & Managed ISA (Do-It-For-Me Platforms)

Robo advisors are technology companies that provide automated financial planning with little or no human supervision. Their products include ready-made portfolios, managed investments and financial advice.

Robo advisors are excellent for beginner investors or those who do not want to deal with the hassle of choosing individual stocks, shares and other investments.

Compare some of the best robo advisors in the UK below. To make sense of the charges, use our robo advisor price comparison table.

Capital at risk. ISA rules apply. Other charges may apply.


Moneyfarm - Mid-price range; Offers advice and ESG investments

Moneyfarm Logo
Account Type
Ready-made
Annual Fund Management Fee 0.20%
Annual Platform Fee
0.75% - 0.35%
Minimum ISA Deposit
£500

Moneyfarm is a UK robo advisor that provides you with a personalised investment plan based on your risk preferences. It has seven globally diversified risk-rated portfolios, including ethical investments. The team at Moneyfarm actively manages your investments, so you can be sure you've got a good mix of hard-working assets handpicked from around the world. You also benefit from free and personalised digital financial advice from Moneyfarm's investment consultants, and you can chat, phone, email, or meet your consultant in person. Moneyfarm's products include Stocks and Shares ISA, General Investment Account, and Personal Pension. Moneyfarm recently introduced the Environmental, Social and Governance (ESG) investment style to its portfolios. Capital at risk.

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Plum - Low cost; Automatic investing; Beginner-friendly

Plum Logo
Account Type
Ready-made
Annual Fund Management Fee
0.48%
Annual Platform Fee
£12
(first month free)
Minimum ISA Deposit
£1

When you subscribe to Plum Plus or Plum Pro (from £1 a month), you can choose to invest your money in a variety of funds. Plum calculates how much you can afford to set aside and automatically invests that amount for you. You choose your investments based on what matters to you. For example, you could choose to invest in emerging markets, technology, ethical companies, etc. Plum offers Stocks and Shares ISA, SIPP, and other money management tools.

Capital at risk.

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Chip - Low cost, Automatic investing; Ethical investments

Chip Logo
Account Type
Ready-made
Annual Fund Management Fee
0.17% - 0.97%
Annual Platform Fee
0.25% - 0.75% + (£1.50 - £3.00/month subscription)
Minimum ISA Deposit
£1

Chip recently launched its investment product which allows users to choose from three funds, namely Cautious, Adventurous and Balanced, depending on your risk appetite. The funds are passive and are managed by BlackRock - the world’s largest investment manager. Although the funds are ‘passive’, the Index Allocation team at BlackRock still monitors the funds on a daily basis. With Chip, you can enjoy automatic investments and savings via the Round Up feature and competitive interest rates on your savings.

Chip offers a tax-free individual savings account (Stocks and Shares ISA), General Investment Account (GIA) and Automatic Savings Account. Capital at risk.

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Circa5000 - Ethical investments, Auto-investing; Beginner-friendly

Circa5000 previously Tickr Logo
Account Type
Ready-made
Annual Fund Management Fee
0.45% - 0.65%
Annual Platform Fee
0.50% + (£1/month subscription fee)
Minimum ISA Deposit
£5

Circa5000 is a UK robo advisor that gives you access to a variety of ethical investments. Their portfolios consist of ETFs of companies that intentionally generate social and environmental solutions - alongside a financial return. There are three portfolios to choose from - People, Planet and Planet & People. Each portfolio gives you the choice of three risk levels - Cautious, Adventurous and Balanced - depending on your risk preference. With Circa, you can enjoy automatic investments via the Round Up feature and access exclusive deals from many retailers, including Oddbox, Honest Mobile and Coral Eyewear.

Circa5000 offers tax-free individual savings accounts (Stocks and Shares ISA & Junior ISA) and taxable general investment accounts (GIAs). Capital at risk.

Promo: Click the button below to access a £5 welcome bonus. Terms apply.

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To make sense of the charges, use our robo advisor price comparison table.


Frequently Asked Questions

1. How many stocks and shares ISAs can I open in one year?

You can only open one stocks and shares ISA in one tax year, but you can open a new stocks and shares ISA with a different provider each tax year if you want to. The tax year starts on the 6th of April and ends on the 5th of April the following year.

2. Can I pay into two different ISAs in the same year?

Yes. You can choose to save or invest in one type of ISA or split your ISA allowance across some or all the other types in any tax year.


Example: You could save £8,000 in a cash ISA, £5,000 in a stocks and shares ISA, £3,000 in an innovative finance ISA and £4,000 in a lifetime ISA in one tax year.


3. Do you pay tax on stocks and shares ISA?

No, you do not pay tax on a stocks and shares ISA. Every tax year, you can invest up to the ISA limit (£20,000 in 2021/22) in a stocks and shares ISA completely tax-free. Any profit you make when selling investments in your ISA is free of Capital Gains Tax. Any dividends received on shares within an ISA will also remain tax-free.

4. How do I invest in a stocks and shares ISA?

You can buy a stocks and shares ISA from investment providers such as banks, building societies, stockbrokers, fund supermarkets, robo advisors, and other financial institutions. Use our best stocks and shares ISA list above to get you started.


Once your ISA is open, you will be able to invest up to £20,000 in a wide variety of assets such as individual stocks and shares, corporate and government bonds, and funds.

5. What type of investments are held in a stocks and shares ISA?

When you open a stocks and shares ISA, you can invest up to £20,000 in a variety of assets, including: 

  1. Individual stocks and shares
  2. Unit trusts
  3. Investment trusts
  4. Corporate bonds
  5. Government bonds and gilts
  6. Funds
  7. Exchange-traded funds (ETFs)
  8. Open-Ended Investment Companies (OEICs)

6. Can I buy and sell shares within an ISA?

Yes, you can buy and sell shares within a stocks and shares ISA or a lifetime ISA. It's worth remembering that when you buy shares within an ISA, it counts towards your £20,000 ISA allowance.


7. Can I split my ISA allowance between two providers?

Yes, you can have a stocks and shares ISA with one provider and cash ISA with a different provider, for example. You cannot split your stocks and shares ISA between two providers.

8. Can I withdraw money from a Stocks and Shares ISA?

Yes. You can withdraw money from a Stocks and Shares ISA at any time by simply selling your investments. There is no minimum length of time you need to hold your stocks and shares ISA for. If you do withdraw money from your ISA and then reinvest it at a later date during a tax year, it will count towards your annual ISA allowance.


9. How do I choose a stocks and shares ISA?

  1. Decide if you want a self-select ISA or a ready-made ISA.
  2. Shop around to make sure you find an ISA that suits you. Use our best stocks and shares ISA tables above as a starting point.
  3. Compare the range of investments each provider offers.
  4. Use our stocks and shares ISA charges calculator to estimate your fees.
  5. Check that the provider you choose is regulated by the Financial Conduct Authority (FCA). All the providers we list on Koody are regulated by the FCA.
  6. Beware of investment scams. Way too many people have lost money to investment scams in the last couple of years. If something seems too good to be true, it probably is. Use the FCA's ScamSmart website to help you spot the red flags.

10. How many ISAs can you have?

There are four types of ISAs which you can put money into each tax year - a cash ISA, a stocks and shares ISA, a lifetime ISA or an innovative finance ISA. Read our guide entitled ISA 101: The Basics to learn more.


11. Can a stocks and shares ISA be transferred to a cash ISA?

Yes, you can transfer a stocks and shares ISA to a cash ISA. However, if your cash ISA provider is different from your current stocks and shares ISA provider, you'll need to inform your cash ISA provider of the transfer. Do not simply withdraw the money, as doing so will cost you all the tax-free benefits.

The same applies to transferring stocks and shares ISA from one provider to another. If you plan to keep your future tax benefits intact, you have to arrange for a transfer rather than selling and reinvesting.


12. What happens if you exceed your ISA allowance?

If you have exhausted your £20,000 ISA allowance for the current tax year, you can invest the rest of your money using a general investment account (GIA). You should be able to open a GIA with most ISA providers. GIAs are not entirely tax-free like ISAs, but they come with some generous tax benefits:


  1. Capital Gains Tax (CGT) Allowance: CGT is the tax you pay on the gains you make from selling shares, a second home, or jewellery. This tax year, you can make £12,300 of gains tax-free. Once you have used up your CGT allowance, you will have to pay tax at 10% for basic-rate taxpayers and 20% for higher-rate and additional-rate taxpayers.
  1. Dividend Allowance: This tax year, the first £2,000 you receive in dividend is tax-free. After which, you will have to pay tax at 7.5%, 32.5% and 38.1% for basic-rate, higher-rate and additional-rate taxpayers, respectively.
  2. Personal Savings Allowance‍: Your personal savings allowance includes your normal savings interest in a bank and other forms of interest. If you invest in corporate bonds outside your stocks and shares ISA, you'll enjoy tax-benefits as follows: 
  • ~~Basic-rate (20%) taxpayers can earn up to £1,000 interest tax-free.
  • ~~Higher-rate (40%) taxpayers can earn up to £500 interest tax-free.
  • ~~Additional-rate (45%) taxpayers have no tax-free allowance.

13. What is the best stocks and shares ISA for beginners?

Here are some of the best stocks and shares ISAs for beginners:

  • Plum - Low cost; automatic investing; beginner-friendly
  • Moneyfarm - Mid-price range; offers advice and ESG investments
  • InvestEngine - Low cost; commission-free ETFs
  • Chip - Low cost, automatic investing; ethical investments
  • Circa5000 - Ethical investments only, auto-investing; beginner-friendly

You might also like 🤓

  1. Best Share Dealing Accounts
  2. Best Investment Apps
  3. Best Money Saving Apps
  4. Best Automatic Investment Apps
  5. Compare Investment Platforms
  6. Compare Online Brokers
  7. Compare Robo Advisors
  8. Investing for Beginners
  9. Moneyfarm vs Hargreaves Lansdown
  10. Fineco Bank vs Interactive Investor

Credits

  1. Gov.uk
  2. Money Advice Service
  3. The Lang Cat

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