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.
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.
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:
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.
Compare some of the best Stocks and Shares ISA platforms in the UK below:
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 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.
AJ Bell Youinvest has thousands of investments for you to choose from, including shares, funds, investment trusts, and ETFs. And you can manage them online or with its mobile app. If you need help choosing, it has four ready-made portfolios and other investment ideas. AJ Bell Youinvest also offers Dealing Account, Lifetime ISA Junior ISA, and SIPP.
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.
Fidelity has over 50 years of investing experience and more than 1 million UK customers. It offers one of the widest fund ranges in the market, and thousands of individual stocks and shares, investment trusts and exchange-traded funds. Choose your own investments with expert financial guidance, tools, and information to help you, or simply pick a ready-made portfolio. Fidelity also offers General Investment Account, SIPP, Junior ISA, and Junior SIPP.
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 also provides SIPP, Lifetime ISA and Junior ISA.
To make sense of the charges, use our full price comparison table.
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 has seven risk-rated portfolios that are recommended to you using your online investor profile. You also benefit from free and personalised digital investment advice from Moneyfarm’s investment consultants - chat, phone, email, or meet your consultant in person. Moneyfarm’s products include Stocks and Shares ISA, General Investment Account, and Personal Pension.
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.
Nutmeg allows you to invest in a variety of funds based on your risk preference and values. It has four investment portfolios to choose from - Fixed Allocation (cheapest), Fully Managed, Smart Alpha, and Socially Responsible. Nutmeg’s products include Stocks and Shares ISA, Lifetime ISA, Junior ISA, and Personal Pension. Formal financial advice is also available.
Wealthify allows you to choose from five investment themes based on your attitude to risk - cautious, tentative, confident, ambitious or adventurous. Then it builds an investment plan to match your risk preference. Wealthify’s products include environmentally and socially responsible investments, Stocks and Shares ISA, Junior ISA, and SIPP.
To make sense of the charges, use our robo advisor price comparison table.
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.
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.
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.
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.
When you open a stocks and shares ISA, you can invest up to £20,000 in a variety of assets, including:
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.
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.
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.
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.
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.
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:
Here are some of the best stocks and shares ISAs for beginners:
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