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Stocks and shares ISAs

Open a stocks and shares ISA today

  • Make your money work harder with an investment ISA

  • Enjoy tax free returns

  • Compare from a range of trusted providers

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What is a stocks and shares ISA?

A stocks and shares ISA is a tax-free way of investing up to £20,000 each tax year in the stock market through funds, bonds or shares.

It’s different to a cash ISA, which is also tax free but pays interest on your savings.

You can only open one stocks and shares ISA each tax year in the UK.

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How does a stocks and shares ISA work?

Setting up and handling a stocks and shares ISA is straightforward. Just follow the steps below

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    Select your provider

    There’s plenty of choice when it comes to investment companies offering stocks and shares ISAs. Check out the fees and terms – such as the required minimum investment – before making your decision

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    Open an account

    You can open an account online to act as a tax-free ‘wrapper’ for your investments. Depending on the account, you may also be able to transfer in existing ISAs from elsewhere without eating into your allowance

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    Invest your money

    You can invest up to £20,000 each tax year. This counts towards your overall ISA allowance. You have a wide choice of where to invest, and can make your own decisions or look for help from an expert adviser

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    Monitor your account

    You’ll be able to track how your investments are performing over time and make any changes you see fit. You can also give instructions to sell your shares and withdraw the money when you need it.

What are the pros and cons of stocks and shares ISAs?

Need some help to decide? We’ll help you weigh up the advantages and disadvantages of investing in a stocks and shares ISA...

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    Advantages

    • Your stocks and shares ISA can grow tax-free  

    • It has the potential to grow faster than a cash ISA over time 

    • You’ll can manage your own portfolio or have it managed on your behalf

    • Invest in companies or areas you believe will grow or align with your social and ethical values 

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    Disadvantages

    • Investing is not without risk and your ISA could go down as well as up in value 

    • Management fees can be high and eat into your profits 

    • You’re capped at £20,000 to invest tax-free each tax year 

    • May not to be suitable for short term investors because of market volatility

Why choose a stocks and shares ISA with MoneySuperMarket?

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    It’s quick and easy

    View ISAs at a glance with details such as minimum investment and any fees

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    Review a wide range of providers

    See options from our panel of leading providers, so you can easily compare 

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    Open your stocks and shares ISA today

    When you’ve made your decision simply click through to open your account online 

What are the different types of investment ISAs?

There are different types of stocks and shares ISA to suit different needs.

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    Self-select ISAs

    Manage your portfolio by choosing specifically which stocks or funds to buy and sell. Can be good for experienced investors. Take into account fund charges, trading charges and exit fees.

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    Managed stocks and shares ISAs

    The ISA provider manages your investment at a risk level that you choose. There are various service levels from investment advisers to robo-advisers.

    You’ll usually pay more for this service.

What can I invest in with an investment ISA?

A stocks and shares ISA is a tax-free wrapper that can be put around a wide range of different investment products or assets, such as:

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    Individual stocks and shares

    Where you purchase a small slice of a single company and look to make a return as the company’s value rises

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    Unit trusts and investment trusts

    A form of collective investment. The pooled money is invested in a portfolio of assets. An investment trust has a fixed number of shares

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    Exchange-traded funds (ETFs)

    An investment fund traded on stock exchanges. ETFs tend to track particular markets or indices and can often be low cost investments

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    Government or corporate bonds

    You lend money to the government or a corporation when you invest in a bond with the promise that it will be repaid with interest when the bond matures

How to choose the best stocks and shares ISA for you

When selecting the right investment ISA for your needs there are a range of things to consider, including:

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    Your view of risk

    Different investment ISAs can offer different levels of risk – or the option for you to choose your own underlying assets. Make sure you’re comfortable with where your money is being invested and you fully understand the risks.

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    Managing your investment

    Decide how hands-on or off you want to be with your stocks and shares ISA. Using a professional adviser or investment platform will come with additional fees, but you might benefit from their investment expertise 

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    Fees and charges

    Check what you’ll be paying in upfront fees, plus any ongoing management charges. If you’re looking to transfer an existing stocks and shares ISA into your new account, consider the transfer fees. There might also be a time lag involved.

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    Customer service

    Find out how the provider will interact with you and how and when they’ll be available should you need to contact them. See what others think of the providers by checking out online reviews of their services

What are the stocks and shares ISA rules?

Tax-free stocks and shares ISAs are governed by a number of rules. These include:

  • Maximum annual investment – save up to £20,000 tax-free in ISAs each tax year. This money can be invested entirely in stocks and shares ISAs or cash ISAs, or split between the two

  • Deadline for investing – the end of the tax year is 5th April. You must use your annual ISA allowance by then or lose it

  • More flexible investing – you can now open as many stocks and shares ISAs, cash ISAs and innovative finance ISAs as you like during the tax year (subject to £20,000 annual subscription limit)

  • Frequency of investing – make a lump sum deposit, regular or occasional contributions throughout the tax year 

  • Reinvesting – if you cash in some or all of your ISA, you can reinvest this money into another ISA, but only to the extent that you have unused available ISA allowances

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Tim Heming

Our expert says

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Stocks and shares ISAs provide a great opportunity. Not only will you benefit from tax-free returns, but the stock market typically outperforms savings accounts, so you can see your money growing faster. There are risks though. As with all investments, the value of what you have can go down as well as up.

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- Tim Heming, Personal Finance Expert

How to view stocks and shares ISAs with MoneySuperMarket

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    Browse our providers

    Just click the button below to see a list of all our stocks and shares ISA accounts

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    See what's on offer

    View accounts from leading UK stocks and shares ISA providers and compare fees and minimum investment 

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    Click through to provider

    When you find the stocks and shares ISA you want, click straight to the provider to apply

You’ll need to be aged 18 or over and a UK resident for tax purposes.

Rule changes mean you can now open as many stocks and shares ISA as you like each tax year. You can also open multiple cash ISAs or innovative finance ISAs in the same tax year but you’ll have to split your annual £20,000 ISA allowance between the different types of account. You are allowed to retain existing ISAs from previous years.

There are two main ways to transfer stocks and investments between trading accounts, either via an ‘in specie’ transfer or as cash.

An ‘in specie’ transfer is known as a stock transfer - that means transferring your assets in their current form whether it’s stocks and shares or unit trusts and mutual funds.

Stock transfers allow you to keep hold of your investments alongside any changes in value. The downside is that it can take up to four weeks to transfer your holdings.

No, the ISA allowance is capped at £20,000 for the current tax year. If you don’t use it by April 5, it expires and is lost. You’ll have a new £20,000 ISA allowance for the next tax year. 

Yes, as with all investments, the value of what you hold can go down as well as up. Historically over the long term, the stock market has outperformed savings accounts. This is why it’s normally advised that you invest in a stocks and shares ISA over the long term.

Both types of ISA offer tax-free returns on £20,000 saved each year, but while a cash ISA is a savings account that pays interest, a stocks and shares ISA sees your money is invested in the stock market.

The length of time you invest is a matter of personal choice and comes down to individual needs and preference. Typically, investing for longer and diversifying your investments gives you more chance to make better returns and ride out any downturns in the stock market.

Investing in stocks and shares is relatively straightforward. There are a few ways you can do it depending on how hands-on you want to be with your investments. Our guide on How to invest in the stock market gives more information.

When you buy shares, you effectively own a small slice of the company you’re investing in.

This depends on many factors, such as how much research you want to do or knowing specific sectors you may want to invest in. Experienced investors may choose to pick stocks themselves. Alternatively, you could opt to have your ISA managed by a fund manager. You’re likely to be charged slightly more for this, but you have a dedicated expert trying to optimise your returns.

It’s not certain that your stocks and shares ISA will perform better than a savings account, but over the long term this has historically proved to be the case. All investments are different though, so it depends when and where you invest compared to the returns you might receive with a savings account.

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