Compare stocks and shares ISAs
Investment ISAs, such as a stocks and shares ISAs, let you invest in different markets and could earn you a tax free profit.
Wesleyan With Profits Stocks and Shares ISA
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| Permanent UK Resident | |
| Minimum Initial Deposit | £0 |
| Minimum Monthly Investment | £0 |
| Minimum Lump Sum Stocks & Shares ISA Investment | £0 |
Hargreaves Lansdown Stocks and Shares ISA
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| Permanent UK Resident | |
| Minimum Initial Deposit | £0 |
| Minimum Monthly Investment | £0 |
| Minimum Lump Sum Stocks & Shares ISA Investment | £0 |
IG Stocks & Shares ISA
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| Permanent UK Resident | |
| Minimum Initial Deposit | £0 |
| Minimum Monthly Investment | £0 |
| Minimum Lump Sum Stocks & Shares ISA Investment | £0 |
Moneybox Stocks & Shares ISA
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| Permanent UK Resident | |
| Minimum Initial Deposit | £1 |
| Minimum Monthly Investment | £0 |
| Minimum Lump Sum Stocks & Shares ISA Investment | £0 |
Lightyear Stocks & Shares ISA
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| Permanent UK Resident | |
| Minimum Initial Deposit | £0 |
| Minimum Monthly Investment | £0 |
| Minimum Lump Sum Stocks & Shares ISA Investment | £0 |
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Last updated: June 26, 2023
This article is designed to offer you impartial guidance as to your options and what they might mean, but the decision on which product to take out is yours.
What is a stocks and shares ISA?
A stocks and shares ISA, also known commonly as an investment ISA, is a type of tax-efficient investment account. It allows you to earn a return by investing your money in a variety of shares, funds, investment trusts and bonds.
Thanks to the annual ISA allowance any returns you earn are tax free. This means that you won't have to pay dividend, capital gains or income tax on any profits you make from the investments held in a stocks and shares ISA.
For each tax year, everyone in the UK over the age of 18 is granted an ISA allowance. For the 2023/24 tax year, the annual ISA allowance is £20,000 per person. You can only pay into one investment ISA per tax year. But you can open a new one each year.
What types of investments can you invest in with a stocks and shares ISA?
There are many different types of investments that you can make with varying levels of risk.
Stocks or shares are essentially slices of ownership in a given company. The value of a share is calculated by dividing the total market value of the company by the number of shares. The value of each share can vary depending on how the company performs and other external economic factors. When you buy shares, the aim is to earn profit by selling the shares when they rise in value.
Investment funds are 'collective' investments which pool your money with other investors. A fund manager uses that money to buy and sell a wide range of investments on your behalf, in order to achieve a fund’s objective. These investments can include shares in companies, real estate, or government bonds.
Open Ended Investment Companies (OEICs), which are professionally managed collective investment schemes that pool your money with other investors.
Unit trusts work by pooling your money with other investors into a single fund, which is managed by a fund manager. The fund manager then uses the unit trust fund to invest in asset classes through a variety of securities.
Investment trusts are publicly listed companies that invest in financial assets or the shares of other companies on behalf of their investors. When you invest you are buying shares in an investment trust, the value of which fluctuates based on the underlying value of the assets they own and the supply and demand for their shares.
Exchange traded funds (ETFs), are a type of security that track an index, sector, commodity, or other asset, which can be purchased or sold on a stock exchange just like a regular stock.
Which stocks and shares trading platform should I choose?
There are two types of trading platforms:
1. Do-it-yourself platforms
These are trading platforms which allow you to pick where you invest, and for how long. These are best for experienced investors who know what they're doing and are aware of the risk they take and are investing with a clear goal in mind. With a do-it-yourself platform you'll be responsible for:
doing your own research
picking your own stocks, funds, bonds, etc
managing your portfolio yourself.
2. Do-it-for-me platforms
With these platforms, everything is taken care of for you and are typically used by first-time or inexperienced investors. These platforms will first identify your investing goals based on:
how much you want to invest
how much your willing to risk
what your investing goals are
what kind of investments you prefer, e.g. ethical or climate-friendly investment.
The platform will then pick investments based on your preferences to reach the goal you've set.
Are stocks and shares ISAs covered by the Financial Services Compensation Scheme (FSCS)?
Yes, most ISAs, including stocks and shares ISAs are covered by the FSCS up to £85,000 per person, per institution. These means that in the unfortunate event that your ISA provider or fund manager were to go bust, you'd be covered up to that amount.
However, this does not mean that you are protected if the investments in your stocks and shares ISA were to lose value from fluctuations in the stock market.
Always be aware that stocks and shares ISAs put your capital at risk, and you may get back less than you originally invested.
Golden rules of stocks and shares ISAs
Invest your money for at least five years to ride though ups and downs in the market. If you think you'll need access to that money sooner, then a stocks and shares ISA may be not be a good option.
Invest money regularly to maximise your long term returns. Even investing small sums regularly can add up over time.
Don't panic if the market takes a dip. Ups and downs are expected in the stock market. If you're investing for the long term, a momentary dip is unlikely to hurt you.