- Richard Berry
- Updated
Stocks and shares ISA let you unlock tax-free investing when you invest up to £20,000 a year.
Good Money Guide’s experts have tested and reviewed the best stocks and shares ISA accounts in the UK.
Read on to compare the UK’s best ISA accounts that are FCA regulated and offer exceptional customer service and user-friendly account platforms.
Compare The UK’s Best Stocks & Shares ISAs
Find the perfect ISA for you – our comparison table lets you quickly compare key features like account fees, minimum deposit requirements, and whether the ISA is DIY or managed by experts.
Investment ISA | ISA Account Fees | DIY or Managed | Minimum Deposit | GMG Rating | More Info |
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£0 – £24 per quarter | DIY | £1 | See Offer* Capital at risk |
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0.45% per year | DIY | £1 | See Offer Capital at risk |
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0.25% per year | DIY | £500 | See Offer Capital at risk |
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0.75% | Managed | £500 | See Offer Capital at risk |
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0.75% | Managed | £500 | See Offer Capital at risk |
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£4.99 a month | DIY | £1 | See Offer Capital at risk |
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£0 | DIY | £1 | See Offer Capital at risk |
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0.6% | Managed | £1 | See Offer Capital at risk |
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0.2% | DIY | £1 | See Offer Capital at risk |
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0.12% per year | DIY | £1 | See Offer Capital at risk |
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0.15% | Managed | £100 | See Offer Capital at risk |
Our Picks Of The Best Stocks & Shares ISA Accounts
Methodology: Our experts chose the best stocks and share ISA accounts based on:
- User feedback: We analysed over 30,000 votes and reviews in the prestigious Good Money Guide annual awards
- Unbiased, real-world testing: Our team tests each ISA provider with real money to ensure you have a seamless and user-friendly experience
- In-depth feature comparison: We conduct a thorough comparison of features, highlighting those that make each ISA provider stand out from the competition
- Exclusive insights from the top: Our exclusive interviews with provider’s CEOs provide insider perspectives and valuable information to help you make informed choices
Here are Good Money Guide’s top rated stocks and shares ISAs:
- IG: Best ISA for US stocks & smart portfolios
- AJ Bell: Cheapest self-select investment ISA
- Wealthify: Best managed stocks & shares ISA for pre-built portfolios
- Hargreaves Lansdown: Best self-select DIY stocks & shares ISA
- Interactive Investor: Cheapest fixed-fee stocks & shares ISA account
- Saxo: Best ISA for experienced & professional investors
- Bestinvest: Best ISA for investment advice & low costs
- Nutmeg: Best stocks & shares ISA for beginners
- Moneyfarm: Best for simple risk-based investment ISAs
- Dodl: Easy to use stocks & shares ISA for beginners
IG: Best ISA For US Stocks & Smart Portfolios
👍Featured👍
- Investments: Shares, ETFs, investment trusts & pre-made portfolios
- Minimum deposit: £250
- ISA account charge: £24 per quarter
- ISA dealing fee: Shares £3 – £8
IG’s ISA offers a very cheap way to include US stocks directly in your portfolio. But, if you prefer not to trade in individual equities you can take advantage of and invest in a range of Smart Portfolios that are selected and managed by BlackRock on IGs behalf.
IG ISA Fees:
IG charge £24 per quarter in custody fees for an ISA account. There is zero commission on US share trades and just £3 on UK share trades when you trade three or more times a month. Standard dealing fees are £8 for UK and £10 for US shares. Smart Portfolio fees are 0.5% – capped at £250 per year. Fund management charges are 0.13% and transaction costs are 0.09%.
It is also possible to reduce your ISA account fee to £0 if you have more than £15,000 investing in an IG Smart Portfolio or place more than three trades in a quarter.
IG ISA Special Offer:
Free US stock investing – There is zero commission on US share trades and just £3 on UK share trades when you trade three or more times a month.
IG Review
Name: IG
Description: Founded in 1974 as Investors Gold Index, then IG Index, now just “IG” is one of the world’s largest margin trading brokers. IG offer CFDs, FX and Spread Betting (in the UK) alongside share trading and prime brokerage to over 313,000 active clients and offers 17,000 tradable markets. IG also recently introduced physical share dealing and smart portfolios for longer-term investors.
69% of retail investor accounts lose money when trading CFDs and spread bets with this provider.
Is IG a good trading platform?
Yes, IG provides an excellent all-round trading and investing brokerage service. IG pioneered online trading and financial spread betting for private clients and remains not only one of the largest online trading platforms, but also one of the best. IG stands out through deep liquidity, high market range and excellent added value such as trading tools and analysis.
Pros
- Vast range of markets
- Excellent liquidity & DMA equities
- Listed on the London Stock Exchange
Cons
- Customer service can be slow
- No DMA futures trading
- Still charges inactivity fee
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4.7AJ Bell: Cheapest Self-Select Investment ISA
🏆Award Winner🏆
- Investments: Shares, ETFs, bonds & funds
- Minimum deposit: £500
- ISA account charge: 0.25%
- ISA dealing fee: Shares £3.50 – £5, funds £1.50
AJ Bell won the Good Money Guide Award in 2024 for “Best Stocks and Shares ISA” for its low-cost online investing platform for the UK DIY investor where you can invest stocks in more than 20 markets, over 2,000 funds, ETFs, and bonds.
AJ Bell ISA Fees:
AJ Bell charges 0.25% of the value of your portfolio for their ISA. But, share account fees are capped at £3.50 a month. Dealing costs are £1.50 for funds and £5 for shares but drop to £3.50 where there were 10 or more online share deals in the previous month.
AJ Bell ISA Special Offers:
- Recommend a friend, and you’ll both get £100 gift vouchers – When you recommend a friend to AJ Bell that invests more than £10,000 in a SIPP or ISA, you and your friend can get One4All gift vouchers worth £100.
- Switch your share dealing account and receive up to £500 to cover exit fees – If you transfer your share dealing general investment account valued at more than £20,000 to AJ Bell they will help cover any exit fees charged by your current provider. They will cover £35 per investment moved and up to £100 for general exit fees, up to an overall maximum of £500 per person.
- Free subscription to Shares Magazine worth £220 –
Get a free subscription to Shares (worth over £220 per year) by maintaining a balance of £4,000 or more across your AJ Bell investing accounts.
AJ Bell Review
Name: AJ Bell
Description: AJ Bell is an award-winning, low-cost online investing platform for UK DIY investors. Founded in 1995, AJ Bell has grown to become one of the UK’s leading investment platforms. Today, it has more than 440,000 customers and assets under administration (AUA) of over £150 billion.
Summary
AJ Bell is an excellent full-service stock broker that offers access to UK and international shares, bonds and funds with some of the lowest fees in the industry.
Pros
- Wide range of investments
- Low account costs
- Discounts for frequent investors
Cons
- High charge when you deal over the phone
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4.4Wealthify: Best Managed Stocks & Shares ISA For Pre-Built Portfolios
- Investments: Pre-made portfolios
- Minimum deposit: £1
- ISA account charge: 0.6% annual charge
- ISA dealing fee: £0
We ranked Wealthify as the best stocks and shares ISA account in our 2023 awards as they offer low account fees, good research and a wide range of managed investments.
Wealthify won best stocks and shares ISAs in our 2023 awards. It’s very simple to use as you just 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.
Wealthify Review
Name: Wealthify
Description: Wealthify is a digital wealth manager or “robo-advisor” that offers low-cost pre-made portfolios through their Original or Ethical investment plans. Wealthify is now owned by Aviva, and customers can set their own risk/reward threshold and invest through a general investment account, stocks and shares ISA, junior ISA or pension.
Capital at risk
Is Wealthify good for investing?
Yes, Wealthify is a great investment option for people who want a simple, low-cost investment account. They offer pre-made diverse portfolios to invest in where you can set your own goals, risks and potential returns. Fees are low at 0.6% of your portfolio value, but there are also investment costs of on average 0.16% for original plans and 0.7% for ethical plans. Fees do drop to 0.3% above £100k for pensions though.
Pros
- Owned by Aviva
- Simple investment options
- Low-cost
Cons
- Cannot buy individual shares
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4.5Hargreaves Lansdown: Best Self-Select (DIY) Stocks & Shares ISA
- Investments: Shares, ETFs, bonds & funds
- Minimum deposit: £1
- ISA account charge: 0.45%
- ISA dealing fee: Shares £5.95 – £11.95, funds £0
Hargreaves Lansdown was ranked as the best self-select investment ISA in 2023 in our awards, as they offer a huge range of investment options backed up by industry-leading customer support and research.
Hargreaves Lansdown’s Stocks & Shares ISA offers access to a vast range of investments. Investors have access to domestic and international equities, over 3,000 funds, bonds, and more. Another advantage is that the platform offers plenty of research and investment tools to help you make investment decisions.
HL ISA Fees:
Hargreaves Lansdown’s ISA costs 0.45% of the value of your portfolio. However, share account fees are capped at £45 per year. Funds are charged at 0.45% for the first £250,000. There is no charge for buying funds, but shares are charged at £11.95 per deal or £5.95 if you do over 20 deals per month.
Hargreaves Lansdown Review
Name: Hargreaves Lansdown
Description: Hargreaves Lansdown is one of the largest investment platforms in the UK. They offer investing, savings, ISAs and SIPP account to over 1.8 million clients with 142bn in assets under management. The company was founded by Peter Hargreaves and Stephen Lansdown in 1981 and is now listed on the London Stock Exchange.
Is Hargreaves Lansdown a good broker?
Yes, Hargreaves Lansdown is one of our best-rated stock brokers and investment platforms. HL offers access to a huge range of investment types, through a wide range of general and tax-efficient accounts and is suitable for almost all types of investors.
Pros
- Wide range of investments
- Most investment account types
- Excellent research and analysis
Cons
- There are cheaper options for fund investing
- Limited portfolio hedging tools
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4.8Interactive Investor: Cheapest Fixed-Fee Stocks & Shares ISA Account
- Investments: Shares, ETFs, bonds & funds
- Minimum deposit: £1
- ISA account charge: £9.99 per month
- ISA dealing fee: £3.99 – £5.99
Interactive Investor won the 2022 Good Money Guide award for best stocks and shares ISA account as they offer one of the cheapest investment ISAs that provides access to over 40,000 shares and 3,000 funds, as well as investment trusts, ETFs and bonds. They are a good choice for people that want to take control of what they invest in.
Capital at risk
Is the Interactive Investor ISA any good?
Yes, we rate the Interactive Investor ISA as very good, especially for high-value accounts as the account costs do not rise with your portfolio value. Plus, there are DIY and managed ISA options. However, for smaller accounts the fixed monthly fee is expensive.
II ISA Fees:
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.
The Interactive Investor’s ISA account is a flat £9.99 per month, this also includes a free Junior ISA to help you save for your children. Dealing commissions are a free trade every month, then UK Shares and Funds, US Shares charged £7.99 or upgrade to a £19.99 “Super Investor” account 2 free monthly trades and deal for £3.99. Regular investing is free.
II ISA Special Offer:
- One free trade per month – One buy or sell order is free every month, after that, the cost is between £3.99 and £5.99 depending on what plan you are on.
- Free investing for your friends and family – You can give up to five people a free investment account subscription with Interactive Investor’s Friends and Family plan. You pay a single extra fee of £5 a month, and their monthly cost is zero. Each member can invest up to £30,000 in an ISA or a general investing account with free regular investing and no account fees. However, they will still pay normal dealing commissions when they buy and sell investments.
- Get £200 when you refer a friend to Interactive Investor – Recommend a friend or family member to ii and get a £200 reward. Your friend will get their first year’s service plan for free – saving £120. To qualify, your friend must transfer or fund their account with at least £10,000 in combined cash/investments. However, your friend will not receive the usually monthly free trade.
Interactive Investor Review
Name: Interactive Investor
Description: Interactive Investor or II as its known is one of the UK’s largest self-determined investor platforms. II can trace its roots back to 1995 and the startup floated on the London stock exchange back in the year 2000 before being bought by the Australian business Ample in 2002. Today, Interactive Investor is a owned by abrdn with assets under administration of more than £50 billion and 400,000 customers to whom II offers share trading and investment services including, ISAs SIPPs and share dealing, alongside research and analysis. Including model portfolios, selected funds and thematic investments.
Why we like them
Interactive Investor differs from other investment platforms as it charges a fixed account fee, rather than a percentage of the funds you have on account. Which, over time, could save you thousands in costs.
Pros
- Fixed account fees
- Easy to use
- Good research
Cons
- No Lifetime ISA
- Expensive for very small accounts
- No derivatives for hedging
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4Saxo Markets: Best ISA For Experienced & Professional Investors
- Investments: Shares, ETFs, funds, bonds
- Minimum deposit: £1
- ISA account charge: €10 per month or 0.12%
- ISA dealing fee: Shares 0.1% – 0.05%
Saxo’s platform lets you invest in more than 11,000 ISA-eligible stocks, ETFs, bonds and commodities, from 60 leading exchanges worldwide.
Saxo ISA Fees:
Saxo charge a custody fee of 0.12% for an ISA. when you buy and sell shares Saxo Markets charges a commission based on a percentage of transaction size. They are very competitive though and UK shares trading commission starts at 0.1% (£100 if you buy £100,000 worth of stock) and drops to 0.05% for more active traders.
Saxo ISA Special Offers:
Platinum – if you have £200,000 or more on account, you can apply for 30% lower transaction and account costs.
VIP – For accounts with portfolios over £1m, you get even better pricing, direct connection to experts, 1:1 SaxoStrats access and propriety event invitations.
Saxo Review
Name: Saxo
Description: Saxo is one of the largest CFD brokers worldwide and provides direct market access to equities, bonds, forex, futures and options as well as being a major liquidity and infrastructure provider to wealth managers, banks and smaller brokers.
65% of retail investor accounts lose money when trading CFDs with this provider
Is Saxo Markets a good broker?
Yes, Saxo is a good choice for more sophisticated traders. The platform, analysis, and direct market access may be too complicated for beginners. But, for experienced traders its coverage, commissions and research are unrivalled.
Pros
- Direct market access
- Low commissions
- Robust trading platform
Cons
- Seen as a trading platform for professionals
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4.6Bestinvest: Best ISA For Investment Advice & Low Costs
- Investments: Shares, ETFs, funds
- Minimum deposit: £1
- ISA account charge: 0.2% to 0.4%
- ISA dealing fee: Shares £4.95, funds £0
Bestinvest has combined low-cost online ISA investing and share dealing with personalised expert advice to help clients choose the right investments for their portfolio. A good choice for large long-term investors.
Bestinvest ISA Fees:
Bestinvest’s ISA costs 0.2% if you invest in a ready-made portfolio, which reduces to 0.1% above £500,000. For other investments like shares and bonds the account fee is 0.4% up to £250k. Dealing commissions £4.95 per online share trade, fund dealing is free.
Bestinvest Review
Name: Bestinvest
Description: Bestinvest is one of the most established investment platforms in the UK. Bestinvest was founded in 1986 and is now owned by Evelyn Partners (a financial services firm with £52 billion under management). Bestinvest primary offering is low-cost premade portfolios costing as little as 0.2% a year, fund investing and discount UK share dealing.
Is Bestinvest good for investing?
Yes, Bestinvest has combined low-cost online investing and share dealing with personalised expert advice to help clients choose the right investments for their portfolio. A good choice for large long-term investors who want a bit of added value from their broker.
Pros
- Expert advice
- Lowest comparable costs
- Ready-made portfolios
Cons
- Basic data on platform
- App a bit clunky
- No hedging products
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4.2Nutmeg: Best Stocks & Shares ISA For Beginners
Approved by Nutmeg on the 11 September 2023
- Investments: Pre-made portfolios
- Minimum deposit: £500
- Management fee: 0.75%-0.45%
- Dealing fee: £0
Capital at risk. Tax treatment depends on your individual circumstances and may change in the future
Why is it good for beginners?
Nutmeg offer one of the best stocks and shares ISA for beginners 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.
Nutmeg offers off-the-shelf portfolios across its ISA range to suit five different investment styles. Investors can choose between four different portfolios, including fully managed, Smart Alpha powered by J.P.Morgan Asset Management, socially responsible and fixed allocation.
Is Nutmeg’s ISA any good?
Yes, Nutmeg’s ISA lets you invest in pre-made portfolios with a minimum deposit as low as £500 with discounted account fees of 0.45%
Nutmeg ISA Fees:
Nutmeg charge 0.75% for their managed ISA portfolios which drops to 0.35% for balances over £100k. For their fixed allocation ISA portfolios, they charge 0.45% dropping to 0.25% for balances over £100k. For all portfolios, there is an additional charge by the investment fund managers of around 0.2% and the market spread on buying and selling portfolios is currently between 0.04% and 0.09%.
Nutmeg Review
Name: Nutmeg
Description: Nutmeg were among the first digital wealth managers set up in the UK, known as “robo-advisors”. Despite the term robo-advisors being used, it is an investment team that makes the investment decisions. The term robo-advisors refers more to taking the process of building a diverse portfolio automatically online.
Capital at risk. Tax treatment depends on your individual circumstances and may change in the future.
Is Nutmeg any good for investing?
Yes, Nutmeg is very easy and low-cost way to invest in a range of diverse pre-made portfolios created by experts and are part of J.P. Morgan.
- Investments: 5 investment styles are made up of 34 individual portfolios
- Account types: GIA, ISA, Pension, JISA, LISA
- Management fee: 0.75% to 0.45%
Fees: Nutmeg charge 0.75% for their managed portfolios which drops to 0.35% for balances over £100k. For their fixed allocation portfolios, they charge 0.45% dropping to 0.25% for balances over £100k. For all portfolios, there is an addition charged by the investment fund manager of around 0.2% and the market spread on buying and selling portfolios is currently between 0.04% and 0.09%. More information on fees and products can be found here.
Pros
- Great for beginners
- Risk-based funds
- Socially Responsible Portfolios
Cons
- High £500 minimum investment
- 0.75%* account fee higher than Wealthify
- Cannot invest in individual shares
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4.2Capital at risk. Tax treatment depends on your individual circumstances and may change in the future.
Moneyfarm: Best For Simple Risk-Based Investment ISAs
- Investments: Pre-made portfolios
- Minimum deposit: £500
- ISA account charge: 0.75%
- ISA dealing fee: £0
Moneyfarm’s ISA invests in ETFs to keep the costs low, so you aren’t paying for active managers. Instead, you are benefiting from tracking a series of diversified indices that are regularly rebalanced. This should mean you get to keep most of your returns rather than paying hefty fees to fund managers.
Moneyfarm ISA Fees:
Moneyfarm’s ISA investing account fees are scaled between 0.75% for accounts between £500 and £50,000, then above £100k are 0.45% to 0.35%. Average investment fund fees are 0.2% and the average market spread when buying and selling is 0.10%
Moneyfarm Review
Name: Moneyfarm Review
Description: Moneyfarm is a digital wealth manager that aims to make personal investing simple and accessible. It was launched initially in Italy in 2012 by Italian bankers Paolo Galvani and Giovanni Dapra and entered the UK in 2016 and has big-name financial backers such as Allianz Global Investors, Cabot Square Capital, United Ventures and Poste Italiane.
Is Moneyfarm any good?
Yes, Moneyfarm is more of a digital wealth manager rather than a robo-advisor as the portfolios are put together by investment managers, rather than automatically. The automation, as it where, is fine-tuning your portfolio to match your risk/reward choices. As opposed to other robo advisors you can also top-up your portfolio with individual shares and ETFs.
- Investments: 7 pre-made portfolios
- Account types: GIA, ISA, Pension, JISA
- Costs: 0.75% to 0.6%
Fees: Moneyfarm charges 0.75% to 0.6% up to £100k then 0.45% to 0.35% over £100k. Moneyfarm investing account fees are scaled between 0.75% for accounts between £500 and £50,000, then above £100k are 0.45% to 0.35%. Average investment fund fees are 0.2% and the average market spread when buying and selling is 0.10%.
Pros
- Easy to use
- Low fees
- Diverse portfolios
Cons
- High £500 minimum investment
- 0.75%* account fee is relatively high
- No individual US shares available
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4.4Dodl: Easy To Use Stocks & Shares ISA For Beginners
- Investments: Shares, ETFs, funds
- Minimum deposit: £100 or £25 per month
- Account types: GIA, ISA, Pension, LISA
- Account charge: 0.15%
- Dealing fee: £0
AJ Bell Dodl’s ISA is a great option of beginner investors as costs are super low making it ideal for small portfolios. The app is user friendly and as they are part of AJ Bell new investors are in safe hands.
AJ Bell Dodl Review
Name: AJ Bell Dodl
Description: Dodl is a low-cost investment app provided by AJ Bell. The app fees are lower than AJ Bells, and they cater to newer investors by offering commission-free investing in AJ Bell funds, themed investments and a small selection of main market shares.
Capital at risk.
Why we like it
AJ Bell Dodl is a great way for the next generation of investors to invest with a “low-cost, little effort” app which focuses on making investing easy. Which it does well, Dodl is very user-friendly, has great educational content and is one of the cheapest ways to start investing.
Pros
- Easy to use
- Low cost
- Great for beginners
Cons
- Limited range of investments
- App only
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4.5What Is A Stocks and Shares ISA?
A stocks and shares ISA is a smart way to invest your money and grow your wealth tax-free. Think of it like a regular investment account, but with a key perk – you keep all your profits, meaning more money in your pocket.
Who can open one? Stocks & shares ISAs are available to UK residents aged 18 and over. If you’re under 18, you can still get started with a Junior ISA. You can own multiple stocks & shares ISAs, however, you can only contribute to one per tax year.
How much can I invest? You can invest up to £20,000 each tax year in a stocks and shares ISA. This is your annual ISA allowance, and it covers all types of ISAs. So, if you have other ISAs, you can only invest a total of £20,000 across all of them in a single tax year.
Stocks And Shares ISAs – Weighing Up The Pros & Cons
Stocks and shares ISA are a great way to invest for your future, but there are limitations and risks. Let’s explore the key advantages and potential drawbacks.:
Pros
- Tax efficiency: With a Stocks & Shares ISA, all your investment gains and income are completely tax-free. Over time, this could save you hundreds, or even thousands of pounds in taxes
- Potential for high returns: A Stocks & Shares ISA gives you access to a diverse range of investments, like shares, funds, investment trusts, ETFs, and bonds. Historically, these assets deliver significantly higher returns than cash savings over the long term. For instance, UK shares have averaged around 5% annual real returns (adjusted for inflation), according to the Barclays Equity Gilt Study
- Flexibility: Stocks & Shares ISAs are designed with flexibility in mind. You can create a portfolio tailored to your financial goals and risk appetite. Plus, your money remains accessible whenever you need it
Cons
- Contribution limits: You can invest up to £20,000 per tax year in a Stocks & Shares ISA. Any excess must go into other accounts like a General Investment Account or SIPP. The allowance resets annually and can’t be carried forward
- Risk of loss: Your returns aren’t guaranteed. The performance of your ISA depends on its underlying investments, which can fluctuate. While long-term returns are often strong, the value of your investments can fall
- Impact of Withdrawals: With most ISAs, withdrawing funds and replacing them in the same tax year will count toward your annual allowance. However, ‘Flexible ISAs’ let you do this without affecting your limit.
Stocks & Shares ISA Returns Calculator
How long would it take you to become an ISA millionaire? Based on your expected returns in the stock market, compare this against what you would earn if your money was in a cash ISA earning 5%.
When using this ISA calculator please take into consideration that you only get tax relief on up to £20,000 a year.
Spoiler alert: It would take around 20 years to build a pot of £1m with expected returns of 7%. However, with the same monthly contributions of £1,666 and a starting balance of £20,000 it would take an additional 5 years to reach £1m in a cash ISA earning 5%.
Please note these returns do not incorporate account or underlying investment fees. Past performance is no guarantee of future results.
Best UK Stocks & Shares ISAs For Beginners
We ranked Nutmeg as the best Stocks and Shares ISA for beginners because they make all the investment decisions for you. All you have to do is decide how much risk you want to take. You to just choose your risk level, between 1-5.
If you are a beginner and just starting to invest in an ISA the longer your have before you will need the money the more risk you can take becuase you can ride the market dips over time.
Other robo-advisors like Wealthify, Dodl and Moneyfarm, also offer managed ISAs with tools and quizzes to guide you.
When you become a more experienced investor and are comfortable picking your own stocks and funds, DIY platforms like AJ Bell, Hargreaves Lansdown and Interactive Investors will give you more flexibility.
Best Stocks & Shares ISAs For Dividend Investing
Hargreaves Lansdown is the best stocks and shares ISA for dividend investing. They give you the most data, research and tools for buying and comparing high dividend-yielding shares. Hargreaves Lansdown is the largest investment platform in the UK.
This means you get 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 companies distribute to shareholders from their profits. When held in an ISA, dividend income is completely tax-free.
To collect dividends within an ISA, you can either invest in dividend-paying shares or choose dividend-focused funds.
- Further reading: What is dividend investing?
Investment ISAs – What You Need To Know
These mini guides explain some important aspects of running a stocks and shares ISA accounts, such as transfers, investments and allowances.
How To Open An ISA
Opening a savings or stocks and shares ISA (Individual Savings Account) is generally a smart move. Within these accounts, all capital gains, dividends, and interest are tax-free. Interested in opening an ISA but not sure where to start? This guide will walk you through the process of opening a stocks and shares ISA.
How to open an ISA account
Opening an ISA is a relatively straightforward process.
Here are the main steps involved.
Choose An ISA Type
The first step is to determine what type of ISA you want to open. Your options are:
- A stocks and shares ISA
- A cash ISA
- A lifetime ISA (if eligible)
- An innovative finance ISA
- A junior ISA (for your child)
Here, you should give some thought to your financial goals and investment strategy. For example, if your goal is to build wealth over the long term, a Stocks and Shares ISA may be more appropriate than a Cash ISA.
Choose An ISA Provider
There are many different ISA providers today and they all have their advantages and disadvantages. For example, some offer more investment options than others while some have lower fees than others.
When choosing a provider, it can help to read some reviews. You can find plenty of ISA provider reviews right here at Good Money Guide.
Apply For The ISA
The next step is to go to the provider’s website and apply to open an ISA account.
At this stage of the process, it’s likely that you will have to provide the ISA provider with some personal information including your:
- Full name (you may have to provide proof of identity)
- Date of birth
- Residential address
- National Insurance number
- Email address
- Bank details / debit card number
Often, ISA accounts are opened instantly. However, sometimes the provider needs to run additional verification checks, and these can take a few days.
Fund The ISA
Once your ISA account is open, the final step is to fund it. You can usually do this instantly with your debit card.
Who can I open an ISA with?
Today, you can open an ISA with a wide range of companies including:
- Banks such as HSBC, Lloyds, and Santander
- Investment platforms such as Hargreaves Lansdown, AJ Bell, and Interactive Investor
- Digital banks such as Monzo, Marcus, and smile
- FinTech companies such as Moneybox, Wealthify, and Nutmeg
You can find reviews of a lot of these ISA providers here at Good Money Guide. Every year, we review and compare ISA providers and give awards to the best providers.
When can I open a new ISA?
You can open a new ISA whenever you want to.
However, you can only open and contribute to one of each type of ISA per tax year.
Can I open more than one ISA?
Yes. There is no limit as to the number of ISAs you are allowed to have.
However, you can only pay into one of each type of ISA in each tax year.
And the total amount you put in across all ISAs must not exceed the annual ISA allowance of £20,000.
Can I close an ISA and open another in the same year?
Yes, you can. However, the total amount you contribute to all ISAs for the year must not exceed the annual ISA allowance of £20,000.
What to consider when opening a stocks and shares ISA
When choosing a stocks and shares ISA provider, there are a number of things to consider including:
- The range of investment options – Some ISA providers offer more investment options than others. For example, some offer access to a wide range of investments including domestic and international shares, investment trusts, funds, ETFs, and bonds. Others, however, only offer access to certain asset classes or products.
- Fee structures – Every ISA provider has a different fee structure. Fees and charges to consider include annual custody charges, entry and exit fees, trading commissions, and FX charges.
- Platform design – Some Stocks and Shares ISAs (such as those offered by Hargreaves Lansdown and Interactive Investor) are designed for do-it-yourself (DIY) investors. Others (like those offered by Nutmeg and Wealthify) are more aimed at beginner investors or those who don’t want the hassle of managing their own money.
- Research and investment tools – Some ISA providers offer a range of features designed to help you make investment decisions. Others, however, just offer basic trading and investing services.
- User-friendliness and reliability – Ideally, you want a platform that is well laid out, easy to use, and can be accessed via an app so that you can monitor your account and place trades on the go. You also want a platform that is reliable and always available.
- Customer service levels – Some investment providers are better than others when it comes to providing support. Service and support can be important, particularly if you are new to investing.
Managing Your ISA
In this guide, we look at some top tips for making more money with an investment ISA including the best stocks to hold, performance, contributions, fees, regular investing and what to buy.
How can I make more money in my stocks and shares ISA?
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 it 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.
How do I choose what shares to buy for an investment ISA?
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.
Most popular shares in stocks and shares ISAs
- Lloyds Bank tops list of the most popular buys in HL Stocks and Shares ISAs in January.
- Retail investors are riding the AI wave, investing in Nvidia, Microsoft and AMD.
- Defence company, BAE Systems has been in demand amid geopolitical tensions.
- Surge in price of uranium sparks enthusiasm for Yellow Cake.
- Glencore remains popular as investors eye up its role in the green transition.
- Investors focus on oil prices with BP making the top ten of most popular picks in ISAs.
- Bargain hunters snap up shares which have been hit by losses this month, with enthusiasm for JD Sports.
Top ten bought shares in stocks & shares ISAs
Below is a list of the most (net) bought shares for ISA accounts in January 2024, suggesting that HL clients think these are best stocks to own of ISA investing.
- Lloyds share price analysis
- NVIDIA share price analysis
- Glencore share price analysis
- JD Sports share price analysis
- Microsoft share price analysis
- BAE Systems share price analysis
- Phoenix Group Holdings share price analysis
- Yellow Cake share price analysis
- Advanced Micro Devices AMD share price analysis
- BP share price analysis
Source: Hargreaves Lansdown from Jan 2024
Should I make regular ISA investments?
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.
How do I reduce the risk of losing money in my stocks and shares ISA?
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.
How can you track the performance of an investment ISA?
By logging into your ISA account you can view the performance of each underlying investment and the overall performance of your portfolio.
Providers offer charts showing how your portfolio has performed over time. This will include a mix of deposits you have made, as well as how your investments in the ISA have performed.
Here is an example of how Wealthify displays performance. You can see the regular contributions of £100, as the chart gaps up, followed by how the market has performed between jumps.
What happens to the money in my stocks and shares ISA when I die?
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.
Self Select/DIY ISAs
A self-select stocks and shares ISA could be for you if you’re looking to choose your own ISA investments. With this type of account, you have full control over your ISA savings. Here’s a look at how they work, and how to select one.
What is a self-select stocks and shares ISA?
A self-select stocks and shares ISA is an ISA account that enables you to pick your investments yourself.
Sometimes called do-it-yourself (DIY) ISAs, they are aimed at more experienced investors who want to make their own investment decisions.
Self-select stocks and shares ISAs typically offer access to a range of investments including stocks, investment funds, investment trusts, exchange-traded funds (ETFs), and bonds.
They are offered by a range of companies including Hargreaves Lansdown, AJ Bell, Interactive Investor, Barclays, and Fidelity.
What are the advantages and disadvantages of self-select ISAs?
Advantages include:
- More control – With these accounts, you decide how your money is invested
- More investment options – Self-select ISAs tend to offer access to far more investments than managed ISA accounts offer
- More flexibility – With these ISAs, you have a lot of flexibility.
Disadvantages:
- Risk levels are higher – Self-select ISAs can be higher risk than other types of ISAs. You are responsible for your own investment decisions and there is no guarantee that you will make money
- More time is needed – Managing a self-select ISA takes time and effort. With these ISAs, you need to keep an eye on your investments
- Platforms can be more complex – Self-select ISA platforms tend to be more complex than managed ISA platforms.
Self-select ISAs vs managed ISAs: what’s the best option?
The best type of stocks and shares ISA for you will depend on a few factors, including:
- Your investment experience – Self-select platforms are more suited to those with a lot of investment experience who are comfortable managing their own money. By contrast, managed platforms are generally more suited to beginner investors who don’t want to choose their own investments
- The time you have to devote to managing your investments – Self-select platforms are more suited to those who have time to manage their money. If you don’t have the time to manage your investments, a managed ISA product may be more suitable for you.
Best self-select ISAs
The best self-select stocks and shares ISA for you 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 want to invest in (e.g. shares, funds, ETFs, etc.)
- Is easy to use and offers a good level of customer service
- Has competitive fees and charges
- Is regulated by the Financial Conduct Authority (FCA) and provides protection under the Financial Services Compensation Scheme (FSCS).
If you’re looking for recommendations, some providers to consider include:
Hargreaves Lansdown
With Hargreaves Lansdown’s stocks and shares ISA, you get access to a vast range of investments including domestic and international stocks, over 3,000 funds, bonds, and more.
You also get access to plenty of research and investment tools to help you make investment decisions.
On the downside, fees are higher than those of some other self-select ISA providers.
For funds, the annual account charge is:
- 45% on the first £250,000
- 25% on the value between £250,000 and £1m
- 1% on the value between £1m and £2m
- 0% on the value over £2m
For shares, the annual account charge is 0.45%, capped at £45 per year.
Investors also face charges to place share trades. These are:
- £11.95 per trade if you made 0 to 9 deals in the previous month
- £8.95 per trade if you made 10 to 19 deals in the previous month
- £5.95 per trade if you made 20+ deals in the previous month
AJ Bell
With AJ Bell’s stocks and shares ISA, you get a solid platform that is well laid out and very user friendly.
You also get access to a wide range of investments including stocks in more than 20 markets, over 2,000 funds, ETFs, and bonds.
On the downside, there are less investment options than on Hargreaves Lansdown.
Annual account charges for AJ Bell’s stocks & shares ISA are as follows:
- 25% per year on the first £250,000 of funds
- 10% on the value of funds between £250,000 and £500,000
- 00% on the value of funds over £500m
- 25% (max £3.50 per month) on shares (including investment trusts, ETFs, gilts, and bonds)
Trading fees are as follows:
- £9.95 for shares
- £4.95 for shares if you made 10+ share deals in the previous month
- £1.50 for funds
Interactive Investor
With Interactive Investor’s stocks & shares ISA you get a solid platform with a flat-fee structure. This means that annual account charges do not get bigger as your account grows in size.
You also get access to more than 40,000 UK and international investment options.
On the downside, Interactive Investor doesn’t offer as many investing tools as some other providers do.
In terms of fees and charges, Interactive Investor offers three different service plans. These are:
- Investor essentials – This is a low-cost plan for those investing up to £50,000. It costs £4.99 per month and trades are £3.99 each.
- Investor – The monthly fee for this plan is £9.99 and trades are £3.99 each. You get one free trade per month.
- Super Investor – The monthly fee for this plan is £19.99 and you get two free trades per month. Other trades cost £3.99 each.
Self-select ISA comparison
You can use our stocks and shares ISA comparison table to find out which account is best for you. When comparing self-select stocks and shares ISA platforms, there are a number of things to consider including:
- The range of investment options each platform offers – Some providers offer more investment options than others.
- The research and investment tools offered by each platform – Some ISA providers offer a range of features designed to help you make investment decisions. Others, however, just offer basic trading and investing services.
- The fee structure of each platform – Fees and charges to consider include annual custody charges, entry and exit fees, trading commissions, and FX charges. Some ISA providers offer fee calculators that allow you to compare fees. These can be useful when comparing platforms.
- The user-friendliness and reliability of each ISA platform – Ideally, you want a platform that is well laid out, easy to use, and can be accessed via an app. You also want a platform that is reliable and always available.
- The customer service levels of each ISA provider – Some investment providers are better than others when it comes to providing support.
When choosing an ISA, it can be a good idea to read user reviews of a few different providers. Our reviews can give you a better idea of the provider’s customer service levels and reliability.
ISA Investment Ideas
In this guide, I look at ISA investing ideas across five asset classes and highlight some of the best investments in each one so you can build a diverse ISA portfolio.
ISA Investing Ideas
Each year ISA investors get the opportunity to add to their tax-free portfolios but it’s not just a case of squirrelling away up to £20,000 in a tax-free wrapper, because there is also the small matter of how to make that money work efficiently for you, within the ISA.
Deciding how to allocate your ISA allowance, and into what asset classes, indices, sectors and individual stocks, is not an easy task. It’s one that’s not been made any easier by inflation, and thanks to higher interest rates, the return of cash (in cash ISAs), is a viable alternative to risk assets.
Shares
Stock and share ISAs have become increasingly popular with self-determined investors. That’s not so surprising when you consider that over the last five years, an investment into SPY, the S&P 500 tracker has returned in excess of +57.00%, whilst chip maker Nvidia has delivered a +700% return to shareholders in that time.
Risk and reward are intimately linked of course, and trying to balance the two is another part of the investing jigsaw. The good news for ISA investors, who are often saving for the longer term, is that time in the market is definitely on your side.
Research by Bank of America found that the longer you are invested in the stock market the less likely you are to suffer negative returns.
Looking at data back to 1929 the bank found that if you stay in the market for ten years then, on average, you have just a 6.0% chance of negative returns. Compared to a 26.0% chance if you keep your money invested in stocks for just one year.
What stocks should ISA investors be buying?
One way to answer that is to look at what ISA investors at the UK’s largest stockbroker, Hargreaves Lansdown, are doing.
The direct-to-consumer investing firm, which has 1.80 million clients, has just published its latest quarterly review of client activity.
This showed that clients were cautious, with many keeping their money in cash and near cash instruments. However, when they were putting money into the market, they were buying technology, growth and alternative energy stocks.
They were also buying into UK dividends, infrastructure and mining. Energy transition is a popular theme that spreads across several sectors and is one that could play out over the next few decades.
The FTSE 100 has dramatically underperformed many of its global counterparts in 2023.
However, that underperformance could present an opportunity for ISA investors, because it means there are plenty of decent dividend yields available within the index.
They range from the staid and secure National Grid, which has an annual yield of 5.75% out to fund manager M&G which has a yield of just over 10.0%.
Of course, a high dividend yield could be a sign that the market thinks that this level of return is unsustainable.
One way to try and eliminate that concern is to look for stocks with an established track record of dividend payments, and ideally dividend growth.
Paper and packaging group Smurfit Kappa has racked up 11 years of dividend growth and over the last decade has grown its dividend by almost +16.50%.
Whilst the London Stock Exchange can point to 13 years of continuous dividend growth and a 10-year dividend growth rate of 14.96%, according to data compiled by dividenddata.co.uk.
The beauty of dividend income investing is that you are being paid to own the asset and of course, there is always the opportunity to reinvest your dividends which should allow you to compound your portfolio growth.
Another way to screen for attractive stocks could be to look for buy-rated names that are trading well below their target prices.
Here is a list of selected UK stocks that fit that bill (Buy rated but trading well below target prices)
Company | Sector | Current Price | Market Cap | Consensus Analyst Rating | Consensus Price Target |
BATS British American Tobacco | Consumer Defensive | GBX 2,473.50 +1.1% | £55.41 billion | Moderate Buy (Score: 2.67) | GBX 3,775 (52.6% Upside) |
Lloyds Banking Group | Financial Services | GBX 43.40 +0.4% | £27.58 billion | Moderate Buy (Score: 2.78) | GBX 62.33 (43.6% Upside) |
PRU Prudential | Financial Services | GBX 889.60 +0.6% | £24.46 billion | Buy (Score: 3.20) | GBX 1,655.67 (86.1% Upside) |
BARC Barclays | Financial Services | GBX 153.06 0.0% | £23.27 billion | Moderate Buy (Score: 2.75) | GBX 237.25 (55.0% Upside) |
WPM Wheaton Precious Metals | Basic Materials | GBX 3,478 -2.8% | £15.75 billion | Buy (Score: 3.00) | GBX 4,700 (35.1% Upside) |
SGRO SEGRO | Real Estate | GBX 730 +0.1% | £8.98 billion | Moderate Buy (Score: 2.71) | GBX 959 (31.4% Upside) |
WPP WPP | Communication Services | GBX 710.41 -0.4% | £7.60 billion | Moderate Buy (Score: 2.86) | GBX 1,064.63 (49.9% Upside) |
JD JD Sports Fashion | Consumer Cyclical | GBX 130.85 -4.8% | £6.78 billion | Moderate Buy (Score: 2.67) | GBX 372.14 (184.4% Upside) |
ENT Entain | Consumer Cyclical | GBX 940.40 +0.6% | £6.01 billion | Buy (Score: 3.00) | GBX 1,718.50 (82.7% Upside) |
ICP Intermediate Capital Group | Financial Services | GBX 1,346.50 -0.2% | £3.91 billion | Moderate Buy (Score: 2.67) | GBX 2,022 (50.2% Upside) |
Source: Marketbeat.com
Bonds
Bonds are effectively government or corporate IOUs, they have been safe haven and an important source of income for investors for decades.
However, recent gyrations in bond markets have left investors with tough choices.
During covid, bond yields fell to zero or lower, however, since then bond prices have fallen and yields have risen, as interest rates rose to counter persistent inflation.
However, the sharp fall in bond prices does mean that investors can now find quality bonds below par, (or their redemption price), once again.
For, example the UK Treasury 3.25% bond due 31/01/33 is priced around £91.82 at the time of writing, and offers a yield of around 4.33%, with just under 10 years to maturity.
Alternatively, the UK Treasury 3.25% bond, maturing in 2044, trades at circa £97.20 with a yield of 4.77%, and just over 20 years to redemption.
Of course, its not just government bonds that offer attractive yields Corporate bonds can do too.
However, the issue for most ISA investors is that many corporate bonds are not denominated in retail tranches. Instead, they often come in £100,000 or $100,000 clips which puts them beyond the reach of many ISA holders.
Thankfully there are what are known as retail bonds, which are typically structured in units of £1000.00 and which were introduced specifically to appeal to retail investors.
These bonds have been issued by names such as BT Group, Legal and General, HSBC Glaxo Smithkline, Wessex Water, Lloyds Bank and others.
For example, bankers HSBC have a 5.375% bond due on August 22 2033 that’s currently yielding just under 5.70%. Whilst GE Capital UK has a 5.875% coupon bond maturing in January 2033, that yields a fraction over 6.0%. at the time of writing.
A selection of long and medium-dated UK gilt issues
Name | Coupon | Maturity Date | Time To Maturity | Price | Yield |
1 1/8% Treasury Gilt 2073 | 1.13% | 22-Oct-2073 | 50 years 18 days | £33.93 | 4.41% |
1 5/8% Treasury Gilt 2071 | 1.63% | 22-Oct-2071 | 48 years 17 days | £43.54 | 4.51% |
3 1/2% Treasury Gilt 2068 | 3.50% | 22-Jul-2068 | 44 years 290 days | £78.27 | 4.66% |
4 1/4% Treasury Gilt 2046 | 4.25% | 07-Dec-2046 | 23 years 57 days | £91.74 | 4.85% |
0 7/8% Treasury Gilt 2046 | 0.88% | 31-Jan-2046 | 22 years 112 days | £46.59 | 4.81% |
3 1/2% Treasury Gilt 2045 | 3.50% | 22-Jan-2045 | 21 years 103 days | £82.29 | 4.84% |
3 1/4% Treasury Gilt 2044 | 3.25% | 22-Jan-2044 | 20 years 102 days | £79.73 | 4.83% |
4 1/2% Treasury Gilt 2034 | 4.50% | 07-Sep-2034 | 10 years 328 days | £100.35 | 4.46% |
0 7/8% Green Gilt 2033 | 0.88% | 31-Jul-2033 | 9 years 290 days | £72.16 | 4.41% |
3 1/4% Treasury Gilt 2033 | 3.25% | 31-Jan-2033 | 9 years 109 days | £91.40 | 4.39% |
4 1/4% Treasury Stock 2032 | 4.25% | 07-Jun-2032 | 8 years 236 days | £99.73 | 4.29% |
Source: Dividenddata.co.uk
A selection of longer-dated UK Retail Bonds
Name | Coupon | Maturity Date | Time To Maturity | Price | Yield |
Lloyds Bank | 6.50% | 17-Sep-2040 | 16 years 340 days | £108.65 | 5.69% |
SEGRO | 5.75% | 20-Jun-2035 | 11 years 249 days | £100.00 | 5.75% |
GlaxoSmithKline Capital | 5.25% | 19-Dec-2033 | 10 years 66 days | £100.23 | 5.22% |
Wessex Water Services Finance | 5.75% | 14-Oct-2033 | 10 years 0 days | £95.50 | 6.37% |
HSBC Bank | 5.38% | 22-Aug-2033 | 9 years 312 days | £97.60 | 5.70% |
GE Capital UK Funding | 5.88% | 18-Jan-2033 | 9 years 96 days | £98.90 | 6.03% |
Vodafone Group | 5.90% | 26-Nov-2032 | 9 years 43 days | £101.58 | 5.67% |
Legal & General Finance | 5.88% | 11-Dec-2031 | 8 years 57 days | £102.95 | 5.42% |
RCB Bonds Charities Aid Foundation | 3.50% | 08-Dec-2031 | 8 years 54 days | £75.08 | 7.67% |
Tesco | 6% | 14-Dec-2029 | 6 years 60 days | £103.75 | 5.27% |
Source: Dividenddata.co.uk
ETFs
ETFs or Exchange Traded Funds have become one the most most popular asset classes among investors. Not every ETF is ISA eligible, however.
For example, US-listed ETFs, which don’t produce Key Information Documents, or KIIDs, are off limits to UK retail investors, luckily, the are still plenty of eligible ETFs to choose from.
Interactive Investor produces a monthly list of the most purchased ETFs among its ISA and SIPP investors. Which, in September, included sterling-based S&P 500 tracker funds, FTSE 100 tracker funds, and an all-word equity fund among others.
If we look back what ETFs Interactive Investors customers were buying in April 2023 there were three world, or all world equity funds in the mix, including a high dividend fund, a physical gold ETF and three S&P 500 trackers.
Interactive Investor’s most purchased ETFs September 2023
Position | ETF | One-year return (%) | Three-year return (%) |
1 | Vanguard S&P 500 UCITS ETF GBP (LSE:VUSA) | 8.3 | 41 |
2 | Vanguard S&P 500 ETF USD Acc GBP (LSE:VUAG) | 8.3 | 41 |
3 | iShares Core MSCI World ETF USD Acc GBP (LSE:SWDA) | 9.3 | 33.6 |
4 | iShares Core FTSE 100 ETF GBP Dist (LSE:ISF) | 14.7 | 43.8 |
5 | Vanguard FTSE All-World UCITS ETF GBP (LSE:VWRL) | 8.5 | 29.2 |
6 | WisdomTree NASDAQ 100 3x Dl Short ETP GBP (LSE:LQQS) | -66.8 | -81.6 |
7 | Lyxor Smart Overnight Return ETF C GBP (LSE:CSH2) | -5.2 | 12.7 |
8 | Invesco EQQQ NASDAQ-100 ETF GBP (LSE:EQQQ) | 19.7 | 38.3 |
9 | iShares Core S&P 500 ETF USD Acc GBP (LSE:CSP1) | 8 | 40.6 |
10 | Vanguard FTSE 100 UCITS ETF (LSE:VUKE) | 14.6 | 43.7 |
Source: Interactive Investors
I note though that among September’s top 10 ETFs is a leveraged inverse fund, on the Nasdaq 100 index. Such instruments are not suitable for anything other than short-term trading, and are not for long-term investing.
Funds
Managed funds have taken a bit of a back seat in recent years thanks to the growth in and rising popularity of ETFs. However, there is still quite a healthy fund sector out there.
Fund specialists Trustnet lists 628 managed funds in its UK databases, and just over 4500 funds when taking into account other geographies.
When assessing managed funds we need to think about the fund’s performance, the track record of the managers, the fund style and objectives, the liquidity of and costs within the fund etc.
One way to try and distil that information down into something more manageable is to utilise specialist fund research.
For example, the table below shows a selection of UK funds that are rated at four or five crowns by Trustnet. They include equity, mixed asset and fixed-income funds.
A selection of UK funds with four or five crown ratings from Trustnet.
Name | Asset class | FE fundinfo Risk Score | Yield | 1 y (%) | 3 y (%) | 5 y (%) |
Aberforth UK Small Companies | EQ | 111 | – | 9.7 | 45.2 | 10.9 |
Artemis SmartGARP UK Equity I Acc | EQ | 120 | 3.43 | 11.2 | 61.4 | 45.3 |
Artemis UK Smaller Companies I Acc | EQ | 98 | 2.1 | 4.1 | 35.3 | 9.1 |
AXA Framlington Managed Income Z Gross Acc | MA | 32 | 5.16 | 8.9 | 6.9 | 10.7 |
BNY Mellon Inflation Linked Corporate Bond Institutional W Acc | FI | 50 | 4.22 | 14.8 | 8.4 | 16.6 |
Consistent Opportunities Unit Trust Acc | EQ | 94 | 1.72 | -0.5 | 23.5 | 24.8 |
Credo Dynamic A Retail Acc GBP | MA | 58 | – | 4.4 | 20.2 | 30.4 |
Fidelity UK Smaller Companies W Acc | EQ | 109 | 2.29 | 13.7 | 53.1 | 40.9 |
FTF Franklin UK Gilt W Acc | FI | 75 | 2.64 | 2.8 | -27.4 | -15.3 |
Invesco UK Opportunities (UK) Z Acc | EQ | 108 | 2.32 | 20.8 | 71.5 | 47.9 |
Liontrust UK Equity X Acc GBP | EQ | 105 | 2.35 | 20 | 25.9 | 13.8 |
Liontrust UK Micro Cap I Acc | EQ | 71 | 0.67 | -1.3 | 17 | 36.9 |
M&G UK Inflation Linked Corporate Bond I Acc | FI | 28 | 0.74 | 7.3 | 5.6 | 10.9 |
Merian UK Equity Income I Acc GBP | EQ | 116 | 4.38 | 14.6 | 56.7 | 34.1 |
Montreux Healthcare A1 ILS | EQ | 47 | – | -0.3 | 26.8 | – |
Source: Trustnet
Investment Trusts
Unlike managed funds and ETFs investment trusts are closed-end funds. that is the number of shares or units in the trust is fixed rather than floating. And the share price of the investment trusts reflects the performance of the managers and the valuation of the assets that the investment trust owns and the supply and demand or fund flows in to and out the trust.
Trustnet lists 278 UK investment trusts in its database, and they are a varied cross-section of asset classes and management styles. Spanning equities, property, mixed assets, hedging, commodities/energy and money markets.
A popular way to look at investment trusts is to consider the discount of the NAV or net asset value of a trust, relative to its underlying share price of the trust. The thinking here is that a wide discount to net assets should narrow over time and that by buying assets at a discount you may get your hands on a bargain.
Of course, there may well be very valid reasons why an investment trust trades at a substantial discount to NAV.
Investment Trusts with a wide discount to NAV
Name | Asset class | NAV | Prem/Disc | 3-Yr % Performance | 2021 % performance |
CEIBA Investments Limited Ord | PR | 85.96 | -58.12 | -44.2 | -24.3 |
Marwyn Value Investors Ltd Ord LD | EQ | 167.53 | -52.25 | -11.8 | 19.8 |
Chrysalis Investment Limited Ord | EQ | 136.86 | -49.88 | -60.6 | 30.4 |
Macau Property Opportunities Limited Ord USD0.01 | PR | 114.05 | -48.71 | -32.6 | -31.7 |
Augmentum Fintech PLC Ord GBP 0.01 | EQ | 168.53 | -47.49 | -29.7 | 17.8 |
Baker Steel Resources Trust | CE | 66.3 | -46.91 | -47.2 | 1.4 |
Chelverton Growth Trust plc | EQ | 54.73 | -46.10 | 1.7 | 85.7 |
Balanced Commercial Property Trust Limited ORD 1P | PR | 117.12 | -44.76 | 13 | 37.2 |
Abrdn Property Income Trust Limited ORD 1P | PR | 83.8 | -40.87 | 11.5 | 42.1 |
Gore Street Energy Storage Plc Ord GBP0.01 | MA | 116 | -39.66 | -18.7 | 20.8 |
Caledonia Investments PLC Ord | MA | 5203 | -38.69 | 31.8 | 44.1 |
Hansa Investment Company Limited Ord 1P(DI) | EQ | 320.08 | -37.36 | 27.3 | 5.5 |
Menhaden Resource Efficiency PLC ORD 1P | CE | 152.38 | -37.00 | 9.7 | 13.1 |
Alpha Real Trust Limited | PR | 216.2 | -36.63 | -14.1 | 5.4 |
Source: Trustnet
When we pick ISA investments we are usually investing for the long term and choosing assets to perform well over five, ten, and fifteen-year time horizons is a very different skill to timing stocks and other assets for short-term trading, Investing over the longer term can provide us with the opportunity to diversify. However at the same time to focus on particular investment styles such as growth or income, and to have a good look at how much risk we want in our portfolios. Often that judgement is determined by our age and here are in our investment journey.
ISA Transfers
When you move your money from one ISA account to another, it’s called an ‘ISA transfer’. These can be useful if you want to switch between ISA providers or different types of ISA accounts.
How do you transfer an ISA?
When transferring money from one ISA to another, it’s crucial that you complete an ISA transfer form. If you just withdraw your money from your current ISA account and move it manually to another, your money will lose its tax-free status.
Transferring an ISA is otherwise a simple process. All you need to do is contact the ISA provider that you wish to transfer your money to and complete an ISA transfer form. The provider will then take care of the transfer process for you.
ISA transfer rules
When transferring an ISA, there are a few rules to be aware of. Here’s a look at some of the main rules:
- You can transfer your ISA from one provider to another at any time
- You can make as many ISA transfers as you want. However, you cannot contribute more than the annual ISA allowance (currently £20,000) to the different ISA accounts
- You are allowed to transfer between different types of ISAs. For example, you can transfer a cash ISA to a stocks and shares ISA
- If you wish to transfer money you’ve invested in an ISA in the current tax year, you must transfer all of it. For money you’ve invested in previous tax years, you can choose to transfer all or part of it
- If you transfer ISAs from previous tax years, the transfer won’t impact your current tax year ISA allowance.
- If you transfer cash or assets from a lifetime ISA to a different type of ISA before the age of 60, you will have to pay a withdrawal fee of 25%.
The benefits of transferring an ISA
- Access to more superior ISA products – You could use an ISA transfer to transfer a cash ISA to a provider offering a higher interest rate than your current provider is offering. Similarly, you could transfer a stocks and shares ISA to a provider offering more investment options than your current one is offering
- The ability to consolidate ISA accounts – This can be useful if you have multiple ISAs and you want to bring them together to simplify things.
- Access to different types of investments – If you’ve previously held money in a cash ISA but now wish to invest your capital in the stock market, you could transfer your money to a stocks and shares ISA.
The drawbacks of transferring an ISA
- Processing time – Sometimes ISA transfers can take over a month. If you have money invested within a stocks and shares ISA, this can mean you’re out of the market for a while
- Fees – Before starting an ISA transfer, you should check with your current provider to see if there are any exit fees.
Does transferring an ISA count as opening a new one?
No. Transferring an ISA does not count as opening a new one.
If you had contributed to an ISA and then transferred it to a new provider in the same tax year, you would still be able to pay into the new ISA.
Is transferring a cash ISA to stocks and shares ISA a good idea?
Transferring a cash to a stocks and shares ISA can be a good idea if you plan to invest your money. With a stocks and shares ISA, you can invest in a range of assets including stocks, investment funds, ETFs, and investment trusts. These kinds of assets are not available in a cash ISA.
How long does an ISA transfer take?
The processing time for an ISA transfer depends on a few factors including the type of ISA and the provider you wish to transfer to. But here is a rough guide to transfer times:
- Cash to cash ISA – Up to 15 working days
- Cash to stocks and shares ISA – Up to 30 days
- Stocks and shares to cash ISA – Up to 30 days
- Stocks and shares to another stocks and shares ISA – Up to three months depending on the complexity of the investments held.
It’s worth noting that some ISA providers provide a breakdown of approximate ISA transfer times. For example, AJ Bell says that for transfers to its platform, the typical time taken is:
- Cash only – 2 to 4 weeks
- Shares – 4 to 6 weeks
- Funds – 6 to 8 weeks
- International shares – 10 to 12 weeks
How to transfer an ISA in three simple steps
- Step 1 – Decide on the provider you wish to transfer your ISA to
- Step 2 – Contact that provider and get an ISA transfer form (you can often find and complete these forms on providers’ websites)
- Step 3 – Complete the ISA transfer form.
ISA Allowances
If you’re thinking of putting money into an ISA (Individual Savings Account) to save or invest tax-efficiently, it’s important to be aware of the different ISA allowances. These dictate how much money you’re allowed to contribute to your account every year.
What is the tax-free ISA allowance?
The tax-free ISA allowance is the maximum amount of money you can contribute to an ISA account every tax year. In the UK, the tax year runs from the 6th of April to the 5th of April the following year.
You can choose to split your ISA allowance across different types of ISAs (e.g. cash, stocks and shares, lifetime ISA, etc.) or invest it all in one type of ISA. However, you can only contribute to one of each type of ISA per tax year.
What are the current ISA allowances?
For the 2024/2025 tax year, the ISA allowances are:
- Cash ISA – £20,000
- Stocks and shares ISA – £20,000
- Innovative finance ISA – £20,000
- Lifetime ISA – £4,000 (contributions into a Lifetime ISA count towards your £20,000 Stocks and Shares ISA, Cash ISA, or Innovative Finance ISA annual allowance)
- Junior ISA – £9,000
The key takeaway here is that adults in the UK generally have an annual ISA allowance of £20,000. However, if one makes a contribution to a lifetime ISA, this counts towards that £20,000 allowance.
What is the ISA deadline?
The ISA deadline is the last day that you can contribute to an ISA for that tax year. It falls on 5th April every year.
Pros and cons of ISA allowances
ISA allowances today are quite generous. The ability to save or invest up to £20,000 per year tax-free can really be helpful when building wealth for the future.
One downside to ISA allowances, however, is that you can’t carry them over to the next tax year. If you don’t use your ISA allowance in a specific tax year, that allowance is gone forever.
Historical ISA allowances
ISA allowances haven’t always been as high as they are today. In the past, they were a lot lower.
For example, for the 2000/2001 tax year, the total ISA allowance was £7,000 while the Cash ISA allowance was just £3,000.
Only in the 2017/2018 tax year was the allowance for both Stocks and Shares ISAs and Cash ISAs increased to £20,000.
Cash ISA allowances
For 2024/2025, the annual allowance for cash ISAs is £20,000. This is the same as the annual allowance for Stocks and Shares ISAs.
If you make a contribution to a cash ISA, this will reduce the amount that you can put into a stocks and shares ISA.
For example, if you were to put £5,000 into a cash ISA, you would only be able to contribute £15,000 to a stocks and shares ISA that tax year.
Examples of how ISA allowances can be used
One attractive feature of ISA allowances is that they can be split across several different types of ISA.
For example, an individual could invest £10,000 of their annual £20,000 allowance in a stocks and shares ISA and £10,000 in a cash ISA.
Alternatively, they could invest £10,000 in a stocks and shares ISA, £4,000 in a lifetime ISA (assuming they were eligible), and £6,000 in a cash ISA.
ISA allowance tips
If you are keen to make the most of the various ISA allowances available, here are some tips:
- Consider contributing on behalf of your spouse – Every adult currently has a £20,000 annual ISA allowance. This means that a couple can potentially contribute up to £40,000 per year into ISAs
- If you are planning to invest a large amount of money, consider investing it over several tax years so that you can invest more tax-free within an ISA. For example, by investing £20,000 in an ISA in late March – before the ISA deadline – and £20,000 in an ISA in mid-April – after the ISA deadline – you could potentially invest £40,000 tax-free within a month
- If you have maxed out your own ISA allowance as well as your spouse’s ISA allowance, you may want to consider making contributions to Junior ISAs on behalf of your children.
Can you pay into more than one investment ISA in a single year?
Yes, you can. For example, if you are eligible for a lifetime ISA, you can pay into this as well as a stocks and shares ISA.
You can only contribute to one of each type of ISA per tax year, however. So, for example, you can only contribute to one stocks and shares ISA per year.
What happens to your ISA allowance if you make a withdrawal?
The implications of taking money out of an ISA depend on whether your ISA is flexible or not.
With a flexible ISA, you can take out money and replace it in the same tax year without the replacement contribution counting towards your annual allowance.
By contrast, with a non-flexible ISA, if you make a withdrawal and then put the money back into your account, the contribution will be classed as a subscription and will count towards your annual ISA allowance.
Currently, flexibility is only offered for cash ISAs, Innovative Finance ISAs, and cash held within stocks and shares ISAs.
What happens to ISA allowances if you die?
If you die, your spouse or civil partner can inherit a one-off additional ISA allowance. This is known as the Additional Permitted Subscription (APS), and it is equal to either the value of your ISA on the day you die or the value on the day the ISA account is closed – whichever is higher.
Flexible ISAs
A flexible stocks & shares ISA is a type of individual savings account that lets you take money out then put it back again without lowering your overall yearly allowance.
This applies as long as the money is moved and replaced in the same tax year, which in the UK always starts on 6th April and ends on 5 April the following year.
What are flexible stocks & shares ISAs?
Flexible ISAs were introduced in April 2016. They were designed to give ISA savers more freedom about how they use their allowance.
For example, for the current 2024-2025 tax year the ISA allowance is £20,000.
Say you put in £15,000 during the tax year. You then take out £5,000.
If your ISA is flexible the amount you can now put in during the same tax year is £10,000 (the remaining allowance of £5,000 plus the £5,000 you took out).
Any money you take out of a flexible ISA must go back into the same ISA.
However you can move money between the three types of flexible ISA; flexible cash, flexible stocks and shares and flexible innovative finance.
Your provider can tell you if your ISA is flexible.
Like all ISAs, money inside a flexible ISA grows free of any taxes.
- Related guide – best ISA offers for switching provider
How do flexible ISAs differ from non-flexible ISAs?
Flexible ISAs give you more choice in how you use your annual ISA allowance.
With a non-flexible ISA, if you take money out during the tax year you will lose that amount from your allowance.
For example, your allowance is £20,000 and you put £15,000 into an ISA during the 2022 to 2023 tax year.
You then take out £5,000.
With a non-flexible ISA the amount you can now put in during the same tax year is £5,000, just the remaining allowance.
With a standard stocks & shares ISA, some people may choose not to invest, fearing their money will be locked away.
On the other hand, investors who don’t have a flexible account may resist redeeming their money – even if they need it – so as not to impact their £20,000 allowance.
Albert Soleiman, Head of CMC Invest UK, an investment platform, says there aren’t any negative trade-offs when it comes to selecting a flexible ISA over a standard ISA.
He says: “Not all providers, however, offer flexible accounts. If you want the benefits of flexibility, therefore, you need to make sure this is an option with your chosen provider.
If you already have an ISA and it’s not flexible, you may want to consider transferring to a new provider in order to take advantage of flexibility.”
What you can invest in a flexible ISA?
Flexible ISAs are available as cash, stocks & shares and innovative finance ISAs.
Flexible stocks & shares ISAs can invest in any of the investments a normal stocks and shares ISA can invest in. This can include bonds, individual company shares, and investment funds.
Flexible innovative finance ISAs have a broader range of investments you can invest in, based around peer-to-peer lending and crowdfunding. These investments can be riskier.
Flexible cash ISAs only allow you to put your money into cash savings products.
What is the best way to use a flexible ISA as part of your investing plan?
Using a flexible stocks & shares ISA to invest in a variety of assets for the long-term makes sense for many investors.
This may be investing for a house or car or building a fund for later in life.
Albert Soleiman, head of CMC Invest UK, says during times like the present, when inflation and interest rates are high, having long-term goals can help you make the right decisions.
He says: “Focusing on your long term goals can help you make the best use of your flexible stocks & shares ISA without making a hasty decision based on market turbulence.
If, however, you have a sudden need to withdraw money, knowing you have the freedom to do so without harming your annual ISA allowance offers just that little bit more peace of mind.”
Pros and cons of a flexible ISA
Pros
- A flexible ISA can help provide you access to your cash when you need it most – for a life event such as building expenses for example
- You can access your cash in the short-term then put it back without derailing your longer term saving plans
- Like all ISAs, any gains you make in a flexible ISA are free of tax.
Cons
- Flexible ISAs are only available as stocks and shares, cash and innovative finance ISAs. Lifetime ISAs and junior ISAs are not available in flexible options
- Not all providers offer flexible ISAs so the choice is a bit more limited than for non-flexible ISAs.
Which providers offer flexible ISAs?
Provider | ISA type | Exceptions |
AJ Bell | Stocks & shares | None |
Aldermore | Cash | None |
Bank of Scotland | Cash | Variable ISAs only |
Barclays Smart Investor | Cash, Stocks & shares | None |
BestInvest | Stocks & shares | None |
Charles Stanley DIrect | Stocks & shares | None |
Clydesdale Bank/Yorkshire Bank | Cash | Flexi Cash ISA only |
CMC Invest UK | Stocks & shares | None |
Coventry Building Society | Cash | Easy-access ISA only |
Ford Money | Cash | ISA Variable Saver only |
Halifax | Cash | ISA Saver Variable only |
IG | Stocks & shares | None |
Lloyds | Cash | None |
Metro Bank | Cash | Instant Access Cash ISA only |
Nationwide | Cash | None |
Newcastle Building Society | Cash | None |
Paragon Bank | Cash | None |
Principality Building Society | Cash | Easy Cash ISAs only |
Redmayne Bentley | Stocks & shares | None |
Skipton Building Society | Cash | Easy Access only |
Tesco | Cash | Instant Access Cash ISA only |
Vanguard | Stocks & shares | None |
Virgin Money | Cash | Easy-access ISAs only |
Source: Moneysavingexpert, Investors Chronicle, ISA providers’ websites
Multiple ISAs
We’ve taken some examples of the common questions we get asked about ISAs and provided our response to clarify these questions once and for all.
- Related guide – see the best offers for switching ISA provider
A user asked:
I am using my stocks ISA with MoneyFarm. Can I use some other broker to invest in stocks using the remaining ISA limit?
No, You can’t pay in to two separate ISA accounts in the same year. But you can set up a different one when the new financial year starts.
Can I have more than one stocks and shares ISA?
Yes, you can have more than one stocks and shares ISA account open and with funds deposited, but you are only able to pay into one in each financial year.
You have maximum ISA allowance of £20,000 which can be split as you like between different ISA types as you see fit but you must only ever pay into one of each type of ISA in a financial year. E.g., you could:
- Open a new investment ISA now for the FY 24/25 and pay in £10,00
- Also open a new cash ISA for the FY 24/25 and pay in £10,000.
You can also split your balance between up to three ISAs in a single financial year, provided you don’t exceed the maximum £20,000 allowance. So, you could:
- Also open a innovative finance ISA (sometimes known as peer to peer ISAs or p2p ISAs) for the FY 24/25 and pay in £10,000
- Also open a new cash ISA for the FY 24/25 and pay in £3,000
- Open a new investment ISA now for the FY 24/25 and pay in £7,000.
You could choose to pay into a Lifetime ISA, but the maximum deposit available in a single financial year for these accounts is £4,000 and these accounts count as either a stocks and shares ISA or a cash ISA depending upon the type of account you choose.
- Need more information? Read our guide on how to open an ISA.
What can I do with old ISAs form previous financial years?
If you have an old ISA accounts still open from previous years, either stocks and shares, peer to peer or cash ISA accounts, but have not paid into since the start of the new tax year you can choose to:
- Leave them open and open an new one with a different provider (the interest you earn may be lower than when you first opened the account, especially in the case of cash ISAs)
- Open a new account and arrange for the old ISA balance to be transferred to the new account
- Begin paying into again (if your provider allows this)
Transfers made from old ISA accounts do not count towards you annual ISA allowance so are a good way to consolidate your ISA accounts if you want all of your investments in one place.
Best UK Stocks & Shares ISAs For Children
Beanstalk App is the best stocks and shares ISA for children for their Junior ISA product according to our review team. A junior ISA is a tax-efficient investment account that is available to under-18s in the UK. With this type of ISA, family and friends can save money on behalf of a child. Junior ISAs 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.
Industry experts told us...
"A Stocks & Shares ISA allows investors to save up to £20,000 free from tax on income and capital gain with the flexibility to withdraw money whenever it is needed. Investors also have the freedom to choose which investments to include in their ISA, whether shares, funds, investment trusts and bonds."How Do You Invest With A Stocks And Shares ISA?
You can either pick your own shares or have a professional do it for you.
A stocks and shares ISAs let you invest your money in a wide range of investments, including:
- UK-listed company shares
- Corporate and government bonds – compare bond brokers
- Exchange-traded funds – compare ETF brokers
- Investment trusts
- Funds (OEICs or ‘open-ended investment companies’) – compare fund platforms
- Overseas shares and corporate bonds on recognised stock exchanges
Don’t want to decide what to invest in? You can buy into a prebuilt portfolio from a robo-advisor.
You can also invest your money in ethical investments. Most managed ISA accounts have ethical portfolios and self-select ISA providers publish a list of ethical funds to make it easy to choose.
There are also limits – for example, you can’t use an investment ISA to trade derivatives.
Top Stocks & Shares ISAs For Over 50s
If you’re over 50 you should be taking less risk with your ISA investments. 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.
If you’re looking for a managed ISA you may want to consider the products offered by Nutmeg and Wealthify. Both offer a range of lower-risk investment plans that may be suitable for those over 50.
For self-managed ISAs, providers like Hargreaves Lansdown and AJ Bell offer a range of stocks and funds that may match your needs.
A self-managed ISA may be your best option If your goal is to generate dividend income within your ISA. With this type of ISA, you can build a portfolio of income-generating investments. Best of all, income within the ISA will be tax-free.
Best Stocks & Shares ISAs For Ethical & ESG Investors
Ethical investing combines financial gains but also considers environmental, social, and corporate governance (ESG) factors. It’s sometimes called ‘sustainable investing’, ‘socially responsible investing’, or ‘ESG investing’ and helps you align your investing with your values.
Two ethical ISA providers we recommend are:
- Nutmeg – Invest ethically by choosing its ‘Socially Responsible’ plan for your ISA. Their socially responsible portfolios let you investment in ESG-focussed companies and bond issuers
- Wealthify – It’s ‘Ethical’ plan means you can invest in five ethical plans where your investment is in organisations committed to having a positive impact on society and the environment
Or you can build your own ethical ISA through a DIY platform. Hargreaves Lansdown, AJ Bell, and Interactive Investor all offer a wide range of ethical funds and ETFs that can be purchased for an ISA.
FCA Regulation
All UK stocks and shares ISA providers must be regulated by the Financial Conduct Authority (FCA). They ensure ISA platforms are properly capitalised, treat customers fairly and have robust compliance systems.
At Good Money Guide we only feature FCA regulated stocks and shares ISAs that are where your funds are protected by the FSCS.
Stocks & Shares ISA Rules & Allowances
The rules for investing with your Stocks & Shares ISA allowance are as follows:
- Eligibility: UK residents aged 18 or over can open an ISA
- Annual limit: You can invest a maximum of £20,000 per tax year across all your ISA accounts. For example, if you invest £5,000 in a cash ISA during the year, only £15,000 can go in a stocks & shares ISA
- One pear year: You can have as many stocks & shares ISAs as you want but can only contribute to one per tax year
- Withdrawals: You can withdraw your money from a stocks & shares ISA at any time. However, replacing funds in the same tax year counts towards your annual allowance, except with ‘flexible’ ISAs.
How Many Stocks And Shares ISAs Can You Have?
You can open and contribute to one stock and share ISA per tax year (currently 6th April 2024 to 5th April 2025).
ISA providers always advertise switching and new customer ISA offers around March, so that’s a good time to open a new ISA. Timing matters, so opening an ISA as early as possible in the tax year also means your money can be invested longer.
However, overall you can have as many stocks and shares ISAs as you like if you open a new one each year. For instance, one year you could put your ISA allowance into a managed ISA account like Weathify, if you don’t have time to manage your investments. Another year you could open one with Interactive Investor if you felt like this was the year to pick your own shares.
Or, if you think the stock market is going to perform badly, you could put your ISA allowance into an interest paying account with a cash ISA with Raisin.
You can mix allowances, splitting your £20,000 allowance between different types of ISAs, such as a Stocks & Shares ISA and a Cash ISA.
So, for example, if you have already invested £10,000 in a cash ISA during the tax year, you’ll only be able to invest £10,000 in your stocks & shares ISA. The tax year runs from 6th April to 5th April. After the 5th April ISA deadline, you receive a new £20,000 allowance.
More than £20,000 to invest? You can either invest it in another type of account such as a general investment account or a SIPP, or wait until the next tax year to invest it in your ISA.
If you have a substantial amount of savings to invest, you may want to consider making a large upfront contribution to make use of your ISA allowance.
By contrast, if you have a lower level of savings but a high level of income, you may want to consider making larger regular contributions into your ISA.
Types Of Stocks And Shares ISA
The two main types of investment ISA:
- Self-select stocks & shares ISA (pick your own investments/DIY)
- Managed investment ISA (investment experts managed your portfolio)
Self-Select Stocks & Shares ISA
A self-selected investment ISA puts you in complete control of choosing your investments, monitoring their performance and managing your portfolio.
ISA providers like Hargreaves Lansdown, Interactive Investor and AJ Bell cater to DIY investors. Through them, you can invest in a wide range of individual shares, bonds and funds that you pick yourself. However, even though these DIY platforms cannot offer advice, they do provide some tools investors need to manage their own portfolios, like stock screeners, best buy lists and regular market commentary.
If you want advice on what to buy and sell through a DIY ISA platform, Bestinvest do offer paid-for advice services, where they will provide recommendations on what to buy and sell for your portfolio.
- Related guide: How to research funds for DIY investing.
The main advantage of using a DIY platform is that you’re likely to have more choice in terms of investment options. Typically, these kinds of platforms offer access to a wide range of shares, funds, ETFs, and bonds. They are often considerably cheaper than managed accounts.
For instance, even one of the most expensive DIY ISAs, Hargreaves Lansdown charges 0.45% a year, whereas, one of the cheapest managed ISAs, Wealthify charges 0.6%
Who are DIY ISAs suitable for?
- Investors that are interested in the financial markets and want to pick their own investments
- Experienced investors or those prepared to take on a higher level of risk
- Those who have time to manage their money.
Managed Investment ISAs
A managed investment ISA means a team of investment experts will make all of the decisions about where your money goes. Providers like Wealthify, Moneyfarm and Nutmeg have a range of ;ready-made; investment portfolios which they run on investors’ behalf. These are made up of a selection of bonds, shares and funds across different regions and risk levels. They are designed to provide relatively consistent returns, however, they are still ultimately linked to the overall economy and stock market performance.
With these managed ISA platforms you can slightly adjust the risk you would like to take by filling in the platform’s suitability questionnaire. This will determine if the product is suitable for you based on how much risk you are prepared to take.
Managed platforms are generally best if you’re a beginner investor. With a managed platform, you don’t have to worry about choosing your own investments as the provider will do that for you.
Managed ISA products are well suited to those who don’t have the time to manage their own investments. With managed products, you can get set up in minutes and you don’t need to spend time researching investment opportunities.
The main advantage of using a managed platform is that it’s generally easier to construct an investment portfolio. Often, you can set up a portfolio within minutes. On the downside, you’re likely to have less investment options to choose from.
Who are managed ISAs suitable for?
- Beginner investors and those who do not want to manage their own portfolios
- If you don’t have the time to manage your own investments
- if you want want slightly less risk.
Understanding Stocks And Shares ISA Fees
Stocks & Shares ISA often come with fees and charges. Here are the main ones to watch out for:
- Account fee: An annual fee for a provider to hold your ISA account
- Dealing fee: A commission charged every time you buy and sell something in your ISA
- Exit fee: The cost of transferring out your ISA
Account Fees
If you’re investing through an online platform or fund supermarket, the first fee to look out for is the ‘platform’ or ‘custody’ fee. This will either be a flat fee, which tends to be more cost-effective for very large sums of money, or a percentage of the value of your shares/funds.
The more expensive a platform, the more added value it should offer.
For instance, AJ Bell charges 0.25% for their ISA, but you have to pick your own investments. Whereas, Wealthify charge 0.6%, but they pick your investments for you.
Dealing Fees
- Fees for for buying and selling investments can range from £0 to over £15. If you hold funds, you’ll also pay an annual management charge to the fund manager
- If you’ve opened your account via a financial adviser there will be advice fees to pay
- Fees can change over time. Make sure you regularly review the fees you’re paying to ensure your ISA provider is cost-effective
Exit Fees
You can transfer your Stocks & Shares ISA to another provider, but an exit fee might be payable. There are two ways you can transfer your ISA:
- ‘In-specie’ transfer: All your investments move to the new provider
- Cash transfer: Your investments are sold and the proceeds moved to the new provider. This can be quicker but you risk missing out on share price gains whilst your money isn’t in the market.
Are Stocks & Shares ISAs Better Than Cash ISAs?
Stocks and shares ISAs can potentially make you more money than cash ISAs as they perform better, but they come with more risk.
Cash ISAs give you safety by eliminating investment risk, as your money is held in an interest-paying account. While current interest rates on Cash ISAs are relatively high (up to 6% with Hargreaves Lansdown Active Savings) they still lag behind inflation. This means the rising cost of living could outpace the interest you earn, gradually reducing the real value of your savings over time.
You can see in this chart from Schroders, that generally investing in shares outperforms investing in cash most of the time.
The highest interest-paying cash ISAs usually make you lock your money away for a fixed period meaning you can’t access it if you need it. With a stocks and shares ISA you can access your savings faster.
Cash ISAs are good if you value security over getting higher returns, as your money is protected from fluctuations in the market.
So you can make more money with a stocks and shares ISA if you’re willing to take on more risk. Stocks and shares ISA mean you’re exposed to more volatility in the short and medium term, but could earn larger returns in the long term.
- Related guide: Advantages and disadvantages of Investment ISAs vs cash ISAs
You should not invest money that you are likely to need in the short term in a stocks & shares ISA – you should see them as long-term investments. In the short term, ISA investments can fluctuate in value meaning that you may not get back what you invested if you withdraw your money soon after depositing it.
Withdrawing From Your Stocks And Shares ISA
A key advantage of stocks & shares ISAs is being able to withdraw your money at any time. It’s normally easy but you may have to sell your investments first which can take a few days.
When can you withdraw money from a stocks and shares ISA?
You can withdraw money from stocks and shares ISA anytime, as long as you have sold or liquidated your investments.
However, think before you take money out as 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.
If you want to make regular withdrawals from their stocks & shares ISA you 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 don’t offer flexible socks & shares ISAs. CMC Invest however does offer customers a flexible ISA product.
Can you transfer your ISA instead of withdrawing cash?
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.
If you’re wanting to transfer an ISA, here’s what you need to know:
- Transfers can be made as cash or stock
- Transfers don’t count towards your annual ISA allowance
- You can transfer an ISA as many times as you like, but you might pay an exit fee
- ISAs can’t be transferred to someone else
- Not all ISA providers allow partial transfers
Junior ISAs automatically get switched to adult ISAs when the account holder turns 18.
Regulation & Protection of Stocks & Shares ISAs
Three key things you should know about how you’re protected:
- Stocks & shares ISAs are regulated by the UK Government and your funds are protected if the platform gets into financial difficulty
- Your investment ISA is covered up to £85,000 if the platform or broker enters default
- If your ISA doesn’t perform well, you’re not covered for losses
Stocks & Shares ISA FAQ:
No – as with any investment, you could end up with less money than you originally invested.
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.
Any dividends you receive on shares held within an ISA are tax-free.
Richard Berry
This article contains affiliate links which may earn us some form of income if you go on to open an account. However, if you would rather visit the stocks and shares ISA provide via a non-affiliate link, you can view the product pages directly here: