Different account options – which one’s right for you?
When you start investing, you’ll need to choose the type of account you invest through. Different account types can affect how your money is taxed and how much you can invest each year.
We currently offer two main investment account types: a stocks and shares ISA and a general investment account (GIA). Both allow you to invest in the same investments, but they work slightly differently.
Key takeaways
A stocks and shares ISA lets you invest without paying UK tax on your returns
A GIA has no annual investment limit but investment returns may be taxed
Many people use their ISA allowance first, then invest through a GIA
Stocks and shares ISA
A stocks and shares ISA lets you invest without paying tax on the returns your investments generate. That means you won’t pay tax on:
Any profits if your investments grow in value (called ‘capital gains’)
Payments some companies make to their investors (called ‘dividends’)
Each tax year you can invest up to £20,000 across all ISAs you hold, combined. Please note that the amount you can save into a cash ISA is reducing for under 65s from 6th April 2027.
This makes ISAs a popular way to invest for longer-term goals.
Flexible ISAs
Our stocks and shares ISA is a flexible ISA. This means that if you withdraw money from your ISA, you can usually put it back within the same tax year without affecting your annual ISA allowance.
For example, if you invest £10,000 and later withdraw £2,000, you can replace that £2,000 during the same tax year without reducing the amount you’re allowed to contribute.
Once the tax year ends, any withdrawn amount cannot be replaced without using part of the next year’s ISA allowance.
While flexible ISAs allow withdrawals, many people use stocks and shares ISAs to stay invested for longer-term goals.
General investment account (GIA)
A GIA is a straightforward investment account without the tax benefits of an ISA. There’s no annual limit on how much you can invest in a GIA, which can make it useful if:
You’ve already used your ISA allowance for the year
You want to invest more than the annual ISA limit allows
However, investments held in a GIA may be subject to tax. For example, you may need to pay tax if you sell investments for a profit, or receive dividends from companies you invest in.
The amount you pay depends on your personal circumstances, and if tax is due you’re responsible for declaring and paying it through your annual self-assessment. You can find more information on the HMRC website or by checking your personal tax account. If you’re unsure, it may be worth speaking to a professional tax adviser.
At a glance
Stocks and shares ISA
No UK tax on investment returns
Annual investment limit (£20,000 across all ISAs)
Allowance resets in April each year
General investment account (GIA)
No annual investment limit
Investment returns may be taxed
Often used once annual ISA allowance has been filled
Which account might suit you?
Many investors choose to use an ISA first, because of the tax advantages.
A GIA can be useful once you’ve used your ISA allowance, or if you want to invest more than the annual limit allows.
Some people also use both accounts at the same time depending on their goals and how much they want to invest.
What to keep in mind
Both ISAs and GIAs allow you to invest in the same investments. The main difference is how your investments may be taxed.
Tax rules can change and depend on your personal circumstances, so it’s worth keeping this in mind when deciding which account to use.
This information is for education only. It’s not financial advice or a personal recommendation.
Moneysupermarket.com Investments Limited is an appointed representative of P1 Investments Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA FRN 752005).
