Stocks and Shares ISAs

Stocks and shares ISAs are a tax-efficient home for your savings.

The ISAs listed below allow you to access a range of investments, with many funds graded according to the level of risk involved. In some cases, the funds ‘track’ the performance of a particular stock market index, such as the FTSE 100, so the value of your investment rises and falls in line with the index.

Either way, the underlying investment decisions regarding specific company shares are taken by the manager, with no need for you to be involved.

One option that might be considered by those aged 18-39 is the Lifetime stocks and shares ISA, which includes a government bonus of 25% of any investment made each tax year. The maximum investment each year is £4,000.

If you would prefer to be more hands-on and pick your own stocks and shares to house within your tax-efficient ISA wrapper, see our Self-select ISAs page

It’s worth bearing in mind that any investment in the stock market, whether managed on your behalf or otherwise, should be seen as a long-term proposition. Many investment specialists recommend investing over a minimum five-year period. If you can’t tie up your money for five or more years, or if you can’t stomach the risk of getting back less than you invest, then a savings account is probably more appropriate for you.

Understand the risks. The value of your investment and the income derived from it can go down as well as up and you may get back less than you originally invested. The tax advantages of ISAs may change in the future and also depend on your individual circumstances.

MoneySuperMarket doesn’t offer a comparison service for this type of product but we have compiled a list below of providers who can help.

Product information supplied has been provided by each individual brand not MoneySuperMarket.

Stocks & Shares ISAs : Ordered A – Z

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First £20,000 managed free for MoneySuperMarket customers. Enter code 'MS20K' at the end of the signup process

Welcome Gift

£50 gift card when you start

Welcome Gift

£50 gift card when you start

Want your investments to work harder? You can earn a current estimated return of 7.0%* per year with Funding Circle.

Interest rates on traditional savings accounts are deep in the doldrums. But don’t despair – with peer to peer lenders such as Funding Circle, you could earn great return by lending to small businesses in the UK.

It’s a fast-growing market that’s regulated by the Financial Conduct Authority – although it’s outside the Financial Services Compensation Scheme.

So there are risks involved – there’s no guarantee you’ll get your money back.

But if you go in with your eyes open, this could be the savings solution you’ve been looking for…

*The current estimated rate is the average annual gross interest rate accepted on the last 100 loans through the marketplace minus our servicing fee and estimated bad debts in the future. This rate is before any applicable tax. See the full calculation at fundingcircle.com. Rate is updated daily. Rate correct as at 11/07/2016.

 

Expected annualised rate after fees and bad debt

Great for
  • You can choose each and every individual business you would like to invest in
  • If you would like more of a hassle-free solution, you can pre-select the businesses you want to lend to and the rate you're happy to earn and let the Autobid invest for you
But be aware that
  • 1% annual fee applies on the money you have lent
  • There is no provision fund within the Funding Circle platform and is operated similar to an investment - the higher the risk band, the higher rates apply - but remember these are the riskier business
  • Your savings are not protected by the FSCS compensation scheme

Are you an existing Cofunds customer? You can login to your Cofunds account here to access investments you previously made via MoneySuperMarket.com.

Stocks and Shares ISAs explained

ISA rules were changed in July 2014, and again in April 2016, meaning there is now greater flexibility on investments and transfers.

It’s named an ISA, but a stocks & shares ISA is very different to a cash ISA, which is simply a savings account you don’t pay tax on. With a stocks & shares ISA you're investing in financial products such as corporate and government bonds, shares and funds.

Annual allowance

In the 2017/2018 tax year, you can invest up to £20,000 into an ISA. This can be invested in cash or stocks and shares, or a combination of both.

Range of assets

A stocks and shares ISA offers the potential for higher returns than a cash deposit and you can invest in a broad range of assets including shares, bonds, commercial property and commodities. But stocks and shares ISAs are riskier than cash plans. If the stock market crashes or the property market implodes, you could lose all your money, including your original stake. 

Some ISAs are riskier than others: an investment in emerging markets is likely to be more volatile than government gilts. You should therefore pick a scheme that reflects your appetite for risk. 

And don’t forget that a stocks and shares ISA is a long-term investment of, ideally, at least five years. This period of time should hopefully enable you to ride out the ups and downs of the market.

Self-select ISAs

Most people opt for an ISA run by an experienced manager, but others prefer to take control of their investments with a self-select ISA. It’s worth bearing in mind, however, that self-select ISAs are really only suitable for experienced investors with a full awareness of and stomach for the risks involved. 

Tax shelter

The big advantage of a stocks and shares ISA is, of course, the shelter from capital gains tax (CGT). You would normally pay CGT on any profits above £11,300 a year when you sell, but assets in an ISA are free from CGT. 

Dividend tax

Since the start of the new tax year on April 6, 2017, all taxpayers now have an annual tax-free dividend allowance of £5,000. Only dividend income above this allowance is taxed at new, higher rates.

The introduction of this new allowance means that investment ISAs may look less attractive if you have dividend income below £5,000. But bear in mind that your dividend income may rise above this limit over time, and profits on investments held outside an ISA are potentially liable for CGT.

ISA charges

Watch out for charges on stocks and shares ISAs. Some funds levy an initial fee of up to 5%, plus an annual management charge of around 1%, which can eat into investment returns. You might also have to pay an adviser’s fees on top. But if you don’t need advice, you can probably buy your funds cheaper though a discount broker or a fund supermarket.

Compensation scheme

The Financial Services Compensation Scheme covers ISA investments up to £50,000 if your ISA manager should go bust. But remember, the FSCS does not compensate for poor performance. Cash ISAs are protected up to £85,000 by the FSCS, as of 30 January, 2017.

How it works

We want to show Stocks and Shares ISAs from as many providers on the market. We can't promise to have Stocks and Shares ISAs from every single provider, because some don't want to be included on comparison websites. We list these Stocks and Shares ISAs alphabetically from A to Z. You can find out more about how we work here.

Stocks & Shares ISAs Guides

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