Best Stocks & Shares ISA Accounts 2023

Opening a Stocks and Shares ISA is typically a straightforward process. With most providers, you can open one online through the provider’s website or app.

To open a Stocks & Shares ISA, you will need to provide the ISA provider with:

• Your full name
• Your date of birth
• Your address for the last three years
• Your phone number and email address
• Your National Insurance number
• Your nationality (ISAs are only open to UK residents)
• Some proof of identification

You’ll also need to set up an online account. This will involve creating a login username and a password for your account.

Usually, the whole account opening process only takes a few minutes. Once your ISA is set up, you can add money to the account via your debit card. As soon as the money is in your account, you can begin investing.

Money held in a stocks and shares ISA can grow free from income tax. If you sell investments and make a profit, you do not have to pay capital gains tax.

You can invest up to £20,000 across all your ISAs each tax year.

You can invest your stocks and shares ISA money into shares, investment trusts, open-ended investment companies (OEICs), unit trusts, government bonds and corporate bonds.

Self-select ISAs give you complete control over choosing your investments, monitoring their performance and rebalancing your portfolio.

Any dividends you receive on shares held within an ISA are tax-free.

Investments held in a stocks and shares ISA are covered up to £85,000 if the platform or broker enters default. You aren’t covered for any losses you make as a result of your investments performing poorly.

Unless you invest through a managed ISA, where experts choose and monitor your portfolio, you have sole responsibility for your ISA making money.

Investments held in a stocks and shares ISA are covered up to £85,000 if the platform or broker enters default. You aren’t covered for any losses you make as a result of your investments performing poorly.

You can own multiple stocks and shares ISAs, but you’re only allowed to pay into one of them in each tax year.

The maximum contribution limit for each financial year is £20,000. This £20,000 can be split as you like between one investment ISA and one cash ISA.

You can keep both cash  and stocks and shares ISA accounts open from previous financial years alongside your new ISAs but you will only be able to pay into one of each type in the current financial year.

Old ISA account interest rates and charges and fees can change. So it is worth checking the terms and conditions of each account you have open carefully so you don’t end up paying more or earning less in interest.

There are many different approaches to investment, but a popular method of reducing risk is to drip feed money into an ISA over the course of a year. This ensures that the investor is protected against drops in the value of the equities. For example, if £5,000 is invested in a fund in March and it drops in value by 20%, then the investor will be left with £4,000. A drip feeder would buy £2,500 in March, which would be worth £2,000 in April, and could then buy a further £2,500 at the lower price. This would leave the investor with £4,500 and a larger stake in the fund than the non-drip feeding example.

By logging into your ISA account you can view the performance of each underlying investment and the overall performance of your portfolio. Some providers offer charts showing how your portfolio has performed over time.

No – as with any investment, you could end up with less money than you originally invested.

Be careful, if you are worried read our guide on how to spot investment ISA scams

Investing within a Stocks & Shares ISA involves risk. However, there are a number of ways you can reduce the investment risk within your ISA.

One way is to invest in lower-risk investments. These kinds of investments are available on both managed and DIY ISA platforms. Wealthify, for example, offers a ‘Cautious’ plan. Meanwhile, Hargreaves Lansdown offers access to many lower-risk funds.

Another way to reduce investment risk is to diversify your portfolio so that it contains a mix of different assets. This will help reduce overall portfolio risk.

It’s worth noting that if your ISA provider is regulated by the FCA, you will be covered by the Financial Services Compensation Scheme (FSCS) if the provider fails (up to £85,000). The FSCS does not cover regular investment losses, however.

ISA investments such as shares, funds, ETFs, and investment trusts are constantly fluctuating in value. So, it’s not unusual to see the value of your ISA fall in the short term. Stocks & Shares ISA investments should be viewed as long-term investments (5+ years). History shows that, over the long term, assets such as shares, funds, and ETFs tend to provide healthy, inflation-beating returns.

Historically, shares have delivered excellent long-term returns for investors. Over the long run, UK shares have returned around 5% per year in real terms (i.e. above inflation) according to the Barclays Equity Gilt study. That compares to around 1.3% for UK government bonds and around 0.7% for cash. US shares have performed even better. Since 1926, the main US stock market index, the S&P 500, has returned about 10% per year.

It’s important to understand, however, that not every stock has performed this well. To obtain these kinds of returns from the stock market, you need to own a whole portfolio of shares. It’s also important to understand that shares do not rise in a straight line. In the short term, share prices move up and down. To generate good returns from shares, you generally need to invest for the long term.

When choosing shares to invest in, there are a number of things to consider including:

• The company’s growth prospects. Companies that grow substantially over time tend to be good investments.
• The company’s level of profitability. Companies that are highly profitable tend to be good investments over the long run. Companies that are not profitable are generally higher-risk from an investment point of view.
• The company’s balance sheet. Companies that have weak balance sheets tend to be higher-risk investments.
• The company’s dividend track record. Companies that consistently increase their dividend payouts tend to be good long-term investments.
• The company’s valuation. Companies that have very high valuations tend to be higher-risk investments.

It’s important to think about your financial goals and risk tolerance when choosing stocks for your ISA. If your risk tolerance is low, it’s sensible to invest in lower-risk, dividend-paying shares. If your risk tolerance is high, you may want to allocate some capital to higher-growth shares. It’s important to remember that, in investing, risk is directly related to return. The higher the potential return on offer, the higher the risk.

You can sell and rebuy shares in an ISA, normally without affecting your annual ISA allowance. However, you do need to check with your ISA provider to ensure that this is definitely the case.

Further reading: How to buy shares.

There are two main ways to improve the performance of your Stocks & Shares ISA.

The first way is to invest in better underlying investments. This is easier said than done, however. No one knows how an investment will perform in the future and past performance is not an indicator of future performance. That said, if you have a managed ISA and it has consistently underperformed other managed ISA products in the past, it may be worth transferring the ISA to another provider.

The second way is to reduce fees. Over time, fees can have a large negative impact on investment returns. It’s important to ensure that the fees you are paying are reasonable.

You can own multiple Stocks & Shares ISAs, however, you can only pay into one Stocks & Shares ISA per tax year. The annual allowance is £20,000.

You are allowed to pay into a Stocks & Shares ISA and a Lifetime ISA in the same tax year as long as you don’t pay in more than £20,000 in total.

Yes. Transferring old Stocks & Shares ISAs into a new account can be a smart move. When your accounts are consolidated, it’s easier to manage your money.

Generally speaking, transferring an old ISA to a new account is a straightforward process. Usually, it’s simply a matter of applying for a transfer with your new provider. They will contact the old provider and begin the transfer. Once the transfer is complete, you can invest the money in your new ISA. Usually, the process is completed within a few weeks.

Those wishing to transfer an ISA should be aware of the following:

• Transfers can be made as cash or stock.
• Transferring an ISA does not count towards your ISA allowance.
• You can transfer an ISA as many times as you like.
• Some providers charge exit fees (sometimes per stock transferred). It’s worth checking this before you execute a transfer.
• You cannot transfer your ISA to an ISA owned by someone else.

If you wish to execute a partial transfer, you should speak to your providers to see if this is possible. Not all ISA providers allow partial transfers.

You do not need to transfer a Junior ISA into an adult Stocks & Shares ISA. This should be done automatically by the provider.

Fund performance is constantly changing. This means that the best-performing funds today may not be the best-performing funds next week or next month.

Identifying the best-performing funds is generally an easy process, however. For example, if you want to find the best-performing funds on Hargreaves Lansdown, simply navigate to the ‘Funds’ page and then filter funds by a ‘Sector’ so that you’re comparing the performance of similar funds. Then hit ‘Search.’ Once the list of funds is generated, you can sort them by discrete performance or cumulative performance. If you sort the funds by cumulative performance, you can find the best-performing funds over 3 months, 6 months, 1 year, 3 years, and 5 years.

It’s important to remember when picking shares to invest in that past performance is not an indicator of future performance. So, a fund that has performed well in the past may not necessarily perform well in the future.

Here’s how to buy shares so you can get the best value investment options for your money.

With most Stocks & Shares ISAs, if you withdraw money and then put it back into the ISA in the same tax year, it will count towards your annual allowance. However, some ISAs allow you to take money out and pay it back into the account in the same tax year without affecting your annual ISA allowance. These are known as ‘flexible ISAs.’

Withdrawing money from a Stocks & Shares ISA is typically a straightforward process. Usually, it’s just a matter of logging in to your account and selecting ‘withdrawal.’ It’s worth noting, however, that your investments will have to be sold before you can withdraw your money. This process can take several days.

If you die, money and investments held within your Stocks & Shares ISA will be passed on to your beneficiaries.

After your death, your Stocks & Shares ISA will retain its tax benefits until one of the following things happens:

• The administration of your estate is completed
• The Stocks & Shares ISA is closed by your estate executor

If neither of these things happen within three years and one day of your death, your ISA provider will close your account.

In your will, you can leave your ISA to whoever you like. If you have a spouse or civil partner, they can inherit your ISA’s tax-free status as a one-off boost to their own ISA allowance.

You can own multiple stocks and shares ISAs, but you’re only allowed to pay into one of them each tax year.

There is an annual limit on how much money you can put into ISAs, which for the 2020/21 tax year is £20,000. This limit is split across all types of ISAs, so you could invest your whole £20,000 in a stocks and shares ISA or split it between a cash ISA and a stocks and shares ISA.

You can keep old ISA accounts from previous financial years open and continue to earn tax-free returns.

You can transfer ISAs from previous years into your new account, as long as your ISA provider allows ISA transfers.

This will consolidate your investments and keep everything in one place.

Yes. Most Stocks & Shares ISAs are suited to long-term investing. The best ISAs for long-term investing, however, are those that offer the combination of a wide range of investment options and competitive fees. Over the long term, fees can have a large negative impact on investment returns so it’s important to find a provider that offers low fees.

A key advantage of Stocks & Shares ISAs is that they allow you to withdraw your money at any time. Generally speaking, it’s usually quite easy to access money that has been saved in an ISA although you may have to sell your investments first and this can take a few days.

Those looking to make regular withdrawals from their Stocks & Shares ISA may want to consider a ‘flexible ISA.’ This type of ISA enables you to withdraw money and then put it back into the ISA in the same tax year without impacting your ISA allowance. Most providers do not offer flexible Stocks & Shares ISAs

Stocks & Shares ISAs have been around in their current form since 2008. Before this, they were known as ‘Maxi ISAs.’ Prior to 1999, they were known as ‘Personal Equity Plans’ (PEPs).

We ranked Interactive Investor as the best stocks and shares ISA account in our 2022 awards as they offer low account fees, good research and a wide range of investments.

The best stocks and shares ISA is one that:

• Allows you to build an investment portfolio that is in line with your financial goals and risk tolerance.
• Provides access to the assets you wish to invest in whether that’s shares, funds, investment trusts, exchange-traded funds (ETFs), or bonds.
• Suits your investment style. Some ISA providers cater to do-it-yourself (DIY) investors and provide all the tools investors need to manage their own portfolios. Other providers, however, offer managed accounts and products.
• Is easy to use and offers a good level of customer service.
• Enables you to access your money when you need it.
• Has competitive fees and charges, so you can get the best rate of return.
• Is regulated by the UK’s financial regulator, the Financial Conduct Authority (FCA), and provides protection under the Financial Services Compensation Scheme (FSCS).

Interactive Investor was ranked as the best self-select investment ISA in 2022 in our awards particularly if you have if you have a large portfolio and/or trade infrequently, interactive Investor works out as one of the cheapest providers because of it’s fixed investment ISA account fee

Nutmeg offer one of the best managed stocks and shares ISA and are now owned by JP Morgan. With Nutmeg you choose a goal, timeframe and amount you’d like to invest and then select your desired risk level. The platform shows what kind of investments it will use to build your portfolio, which is then rebalanced over time. There is a more expensive “fully managed” option, where your investments are proactively managed by experts.

Wealthify is  on of the best stocks and shares ISAs for beginners as you choose an investment style based on your risk tolerance. The platform then builds your plan and manages it for you. You can start investing with just £1. Wealthify won the 2021 Good Money Guide award for best robo advisor.

Wealthify’s Stocks & Shares ISA offers five different investment options. The options are: Cautious, Tentative, Confident, Ambitious, and Adventurous. All of these strategies are constructed with a mix of low-cost passive investments such as ETFs and funds. Investors also have the option to build an ethical portfolio.

One downside to Wealthify is that, like Nutmeg, there are only a few investment options to choose from. There is not a lot of flexibility and you cannot invest in individual shares and funds.

Wealthify charges an annual fee of 0.60% for managing your investments. Other costs can apply, however, Wealthify aims to keep these as low as possible – around 0.16% for original plans and 0.71% for ethical plans.

Generally speaking, beginner investors require platforms that are easy to use, cost-effective, offer access to products that are well suited to beginners such as ready-made portfolios, and are available to those with small amounts of money to invest.

For larger ISA accounts, Interactive Investor is generally one of the cheapest DIY platforms. It offers a flat-fee structure. Its lowest monthly fee is just £9.99.

Determining the cheapest investment ISA platform is not an easy process. That’s because fees tend to vary depending on the size of your account, the assets you invest in, and the number of trades you make.

Two of the cheapest managed ISA platforms are Nutmeg and Moneybox. Nutmeg charges a fee of 0.45% per year on assets up to £100,000 (0.25% above this) and average investment fund costs of 0.19% per year. Moneybox charges an annual fee of 0.45% along with annual fund provider costs of 0.12% to 0.30%. There is also a £1 monthly subscription fee but this is waived for the first three months.

Ethical investing is an approach that seeks to generate financial gains while also considering environmental, social, and corporate governance (ESG) factors. It’s sometimes called ‘sustainable investing’, ‘socially responsible investing’, or ‘ESG investing.’

Two investment providers that offer ethical ISAs include:

• Nutmeg. With Nutmeg, you invest ethically by selecting its ‘Socially Responsible’ plan for your ISA. Its Socially Responsible portfolios are tilted towards companies and bond issuers that have high ESG standards.
• Wealthify. With Wealthify, you can invest ethically by selecting its ‘Ethical’ plan. Wealthify has joined forces with best-in-class ethical fund providers to create a range of five ethical plans that let you invest in organisations committed to having a positive impact on society and the environment.

It’s also possible to build your own ethical ISA through a DIY platform. Providers such as Hargreaves Lansdown, AJ Bell Youinvest, and Interactive Investor all offer a wide range of ethical funds and ETFs that can be purchased for an ISA.

Hargreaves Lansdown is the best stocks and shares ISA for dividend investing as they have the most data, research and tools for buying and comparing high dividend yielding shares.. Hargreaves Lansdown is the largest investment platform in the UK. Through its investment platform, investors can gain access to a vast range of domestic and international dividend-paying stocks as well as a wide range of dividend-paying funds. You can find UK dividend-paying funds by filtering funds for ‘UK Equity Income’ funds.

Dividends are cash payments that some companies pay to their shareholders out of their profits. When you invest in dividend-paying securities within an ISA, all your dividend income is tax-free.

There are two main ways to collect dividends within an ISA. You can either invest in dividend-paying shares or invest in dividend-paying funds. Three top platforms that offer a wide range of dividend-paying shares and funds for ISA investors include:

Further reading:  what is dividend investing and how does it works.

We recently awarded Beanstalk App, the best stocks and shares ISA for children for their Junior ISA product. A junior ISA is a tax-efficient investment account that is available to those in the UK aged under 18. With this type of ISA, family and friends can save money on behalf of a child. Junior ISAs currently have an annual allowance of £9,000.

Note: Consider your children’s needs carefully before you open an account for them.

Further reading: Compare the top children’s ISA accounts here.

Yes. Nutmeg won our award for the best investment ISA to help buy a house with their Lifetime ISA. The main advantage of Nutmeg’s Lifetime ISA is that you can build an investment portfolio very easily. When you sign up to Nutmeg, they ask about your goals and risk appetite. They then use this information to build a portfolio for you. One downside to Nutmeg’s Lifetime ISA is that investment options are quite limited.

A Lifetime ISA is a tax-efficient investment account designed to help people save for retirement or purchase their first home. It is open to those aged 18-39. The annual allowance is £4,000.

The main advantage of the Lifetime ISA is that contributions into the account come with a 25% bonus while you’re under the age of 50. The disadvantage of this ISA is that there are penalties for withdrawing money before you turn 60 or buy your first property. You can compare all Lifetime Investment ISAs here.

There are a number of good ISAs for those over 50, but it depends on your risk. Providers say that investments ISAs are best left for five years so there is still plenty of time to make potential investment gains before retiring. 

Those looking for a managed ISA may want to consider the products offered by Nutmeg and Wealthify. Both of these providers offer a range of lower-risk investment plans that may be suitable for those over 50.

Those looking for a self-managed ISA may want to consider the ISAs offered by Hargreaves Lansdown and AJ Bell Youinvest. Both of these providers offer access to a range of stocks and funds that may be suitable for those over 50.

If your goal is to generate dividend income within your ISA, a self-managed ISA may be your best option. With this type of ISA, you can build a portfolio of income-generating investments. All income within the ISA will be tax-free.