Self-select ISAs explained

MoneySuperMarket doesn’t offer a comparison service for self-select ISAs but we do have a broad range of guides and information to help you with your ISA decisions. You can also compare stocks and shares ISAs within our investment hub.

Key takeaways

• A self-select ISA allows you to choose which investments go in your stocks and shares ISA

• Self-select ISAs offer a hands-on investment approach, and the freedom to buy and sell investments from your own portfolio when you choose

• It’s important to consider your financial goals, risk level, and time commitment when choosing this type of ISA

What is a self-select ISA?

A self-select ISA, (or DIY ISA), is a type of stocks and shares ISA that allows you to pick your own investments. An ISA is a tax-efficient way to invest. Each adult in the UK can invest a maximum of £20,000 in ISAs each year, (this is the current annual ISA contribution allowance), with the returns tax-free.

With a self-select ISA, you pick which shares to hold in your ISA, rather than having an investment company or provider or fund manager make the decisions for you.

A self-select ISA works in a similar way to a SIPP (self-invested personal pension), in that you have control over what you invest in.

From April 2027, only £12,000 of your £20,000 annual ISA contribution allowance can be saved in cash. The rest must be invested in stocks and shares. This does not apply to people aged 65 or over, who can continue to save their ISA allowance in cash if they wish.

Should I save in a cash ISA instead?

If you think there’s a chance you’ll need your money within the next five years, a cash ISA may be a better option for you than investing in stocks and shares. Stock markets can be volatile, and if you need to sell at a time when prices have fallen, you could get back less than you put in.

A cash ISA pays interest and is tax-free, plus it protects your savings from stock market fluctuations (though inflation can erode the spending power of your savings over time).

Equally, if you are confident you can leave your money invested for at least five years – and are comfortable taking some risk – then you may want to consider investing.

How do self-select ISAs work?

Here is how self-select ISAs work:

Who can open a self-select ISA?

To open a self-select ISA, you generally need to be aged 18 or over and a UK resident for tax purposes. Individual providers may have additional eligibility criteria, so check the requirements before applying.

What can I invest in with a self-select ISA?

• Individual shares

• Corporate bonds 

• Investment trusts

• Open-ended investment companies

• Gilts (government bonds)

• Unit trusts 

• Exchange-traded funds (ETFs)

• Exchange-traded commodities 

How do I choose which stocks to pick for my ISA?

Choosing stocks for your ISA depends on lots of things, including your financial goals, attitude to risk, and how long you plan to invest for.

The key is to research companies carefully before investing, delving into factors such as their financial performance, growth prospects and the risks they face.

You must take care to avoid putting all your money into one company or sector, as this leaves you more exposed if it performs badly. Spreading your money across different companies and industries can help reduce this risk.

If you’re new to investing, you could consider funds or exchange-traded funds (ETFs).

These let you invest in a range of different companies through a single investment, as opposed to betting on a single stock. This can help spread risk and diversify your portfolio.

But just remember that while diversification can mitigate risk, it can’t eliminate it altogether, and the value of your investments can still fall.

What type of self-select ISAs are available?

When you choose to use a self-select ISA, you must also decide whether you need a broker or ISA provider that offers advice – or one that doesn’t, known as an execution-only broker, which lets you make your own investment decisions.

Opening a self-select ISA is often free, but you may pay ongoing platform fees and fund management charges – as well as dealing fees which you buy or sell investments.

Execution-only brokers often have the lowest fees as they simply provide the internet trading platform you’ll need to trade shares and other investments; they don’t provide investment advice.

However, broker firms that offer advice, charge a management fee because they will help you decide which funds and company shares to pick – using their knowledge of the markets.

How do I choose the best self-select ISA provider?

The best self-select ISA provider for you will depend on a range of criteria including:

• Investment range – check the provider offers the types of investments you want to hold, such as shares, funds and ETFs

• Fees and charges – compare platform fees, dealing fees and any additional charges, as these can all eat into your returns over time

• Customer service – look at the support available if you have questions or need help managing your account

• App and website – choose a platform that’s easy to navigate so you can check your investments easily

Don’t choose a provider based on price alone. The cheapest option may not offer the investment choice, features or support you require.

What fees will I pay with a self-select ISA?

The cost of investing can vary between providers, so it’s important to compare fees before making any decision. You may find yourself faced with several types of fees, including:

• Platform fees – some providers charge a management fee for holding your investments; this may be a percentage of your investments

• Dealing fees – you may be charged fees when buying or selling shares and other investments

• Fund management charges – ongoing fees paid to the fund manager

• Other charges – some providers may charge extra fees for services such as transferring investments to another platform or holding certain types of investment

Take the time to compare the total cost of using a platform and check whether fees and charges could make a noticeable difference to your returns.

What are the advantages and disadvantages of self-select ISAs?

There are a number of pros and cons to weigh up when thinking about a self-select ISA. Here are some of the main things to think about:

What are the tax advantages of having a self-investment ISA?

Any profits you make from selling shares, ETFs, investment trusts held within your ISA are completely tax-free.

Outside an ISA, gains over the annual capital gains tax (CGT) allowance (£3,000 in 2026/27) would be taxable.

Dividends paid from shares or funds in your ISA are not taxed. Outside an ISA, you pay dividend tax if your total dividends exceed the allowance (£500 in 2026/27 reduced from £1,000 previously).

Is a self-select ISA right for me?

Whether a self-select ISA is right for you depends on your individual circumstances, investment goals, experience, time commitment, and risk tolerance. You may want to seek help from a financial adviser to discuss your long-term financial goals.

A self-select ISA puts you in control of what you invest in so it can have an appeal to more experienced or confident investors. This type of ISA can also offer good tax benefits – particularly for higher rate taxpayers.

But if you're a relatively inexperienced investor you may feel more comfortable with a standard stocks and shares ISA where your investment is overseen on your behalf by a professional fund manager.

You'll still benefit from the tax-free ISA wrapper and gains in the stock market, but won't have to actively engage with your finances as much.

What are the alternatives to a self-select ISA?

If you want to invest in the stock market, the main alternative to a self-select ISA is a managed stocks and shares ISA. A professional manager (or robo-advisor) picks and balances your investments, tailored to your risk profile.

With a self-select ISA, you choose and manage your own investments. This gives you more control but requires more time and knowledge.

By contrast, a managed ISA takes more of the work off your hands – though you’ll pay for this service.

If you don’t want to invest in the stock market, you might want to open:

• Fixed rate cash ISA: These are a type of cash savings accounts and aren’t linked to the stock market in any way. You get a fixed return but your money is tied up for a set period

• Easy access cash ISA: These operate similarly to a fixed-rate ISA, but you can withdraw money during the term. The other key difference is the interest rate is variable

If you are saving for a house or retirement, you should consider:

• Lifetime ISA: These are designed to help you save for a first home or retirement. You can save up to £4,000 a year and qualify for a 25% bonus from the government (max £1,000 a year).

If you have children, you can open a Junior ISA for each child.

Keen to find out more? Take a look at our comprehensive guide to ISAs.

Other useful guides

We have a range of detailed guides with information for savers and investors. Find out more: 

Savings vs Investments

Understand the ISA basics

Guide to cash ISAs

Guide to stocks and shares ISAs