Compare stocks and shares ISA providers

Introduction to stocks and shares ISAs

What is a stocks and shares ISA?

Stocks and shares ISAs are a tax-efficient way of investing in the stock market; this type of account shields returns on your investment from Capital Gains Tax and Income Tax (although tax benefits depend on your personal circumstances and may change in the future).

In the long-run, stocks and shares ISAs offer the potential for higher returns than earning interest with a cash ISA. But, it’s important to remember the risks associated with investing, as returns aren’t guaranteed and there’s a possibility your investment could lose value.

How does a stocks and shares ISA work?

There is a range of different products you can invest in using a stocks and shares ISA, including: 

• Individual stocks and shares: This is when your money is used to buy a portion of a company; if the company’s value increases, the amount your investment is worth will also rise. 

•  Unit trusts, investment trusts and/or Open-ended Investment Companies (OEICs): These are means of investing in a portfolio of bonds and shares which are overseen by a fund manager, or that track a benchmark, such as the FTSE 100 index. 

• Exchange-traded funds (ETFs): These types of funds contain a range of investments such as shares, commodities and bonds which are traded on the stock market. Most will track the performance of a particular market index. 

• Government and/or corporate bonds: This is when your money is loaned to either a company or the Government and will receive fixed interest in return. 

A stocks and shares ISA will apply a tax-wrapper to any income or growth earned from your investment. However, the same rules apply as to other types of ISAs: 

Stocks and shares ISA rules

• While it used to be the case you could only open and pay into one stocks and shares ISA within a single tax-year, new rules effective from April 2024 mean you can now subscribe to as many of these accounts as you like, providing you don’t exceed your annual ISA allowance

• The annual ISA allowance is the maximum amount you can invest across all types of ISAs each tax-year; it currently stands at £20,000. Depending on your savings goals, you could allocate the entire amount to a single stocks and shares ISA or spread it across a range of different ISAs

• If you have funds in an existing ISA you’re looking to invest, it’s possible to transfer them to a stocks and shares ISA. However, while every ISA provider must allow transfers out, not all accept transfers in – so be sure to check before moving your money

• Equally, you can move your existing stocks and shares ISA to a different platform. But, you should still use an ISA transfer to do so in order to retain your tax-free benefits. For more information, read our guide to transferring an ISA. 

Getting started: Opening and investing in a stocks and shares ISA

How do you open a stocks and shares ISA?

Stocks and shares ISAs can be bought by any UK citizen aged 18 or over, as well as crown servants, members of the armed forces and their spouse or civil partner.

It’s also possible to open a Junior stocks and shares ISA on behalf of a child, who will gain access to the account when they turn 18.

To apply for a stocks and shares ISA, there are some documents you may need to have at hand, such as:

• Proof of address and identity (e.g. passport, driving licence, utility bill etc.)
• National Insurance number
• Contact details (e.g. phone number and/or email address)

But, before getting started, you should also consider answers to the following questions:

How much do you want to invest?

While you’re only allowed to put away £20,000 in ISAs each tax-year, it’s possible to deposit more than this from previous tax years when transferring funds held in an existing ISA to a stocks and shares ISA.

As well as deciding how much you want to invest, you’ll also need to choose how to invest the money - whether as a lump sum or by drip feeding investments on either a regular or ad hoc basis. 

From where do you want to buy your stocks and shares ISA?

Another factor to consider is from where to buy your stocks and shares ISA. For instance, you can find stocks and shares ISAs either directly from a provider or by using an investment platform. This decision will also depend on whether you want to select and manage your own investments, or have a financial adviser, fund manager or company oversee a portfolio on your behalf. 

What are the fees involved? 

When it comes to opening a stocks and shares ISA, not only will you need the sum you’re looking to invest but you’ll also need to budget for the associated fees:

• Annual Management Charge: is a yearly fee that covers the cost of managing your investments. 
• Platform fees: either a flat fee or a percentage of the value of your funds/investments which applies when using an investment platform.
• Trading fees: apply each time you buy or sell an investment. Again, they can either be a flat fee or a percentage of the transaction. 
• Exit fees: may apply if you choose to transfer from one provider to another. 

Do I have to speak to an adviser first?

You’re under no obligation to speak to a financial adviser before opening a stocks and shares ISA, but it may be a good idea – particularly if you’re new to investing.

A financial adviser could help you explore different ways of investing – some you may not have otherwise heard of or considered – to find the best option for your goals and circumstances.

While regulated financial advice comes at a cost, it’s worth weighing up the fees against any potential losses.

Related guide: Why you need a financial plan and how a financial adviser can help

Managing your stocks and shares ISA

After deciding to open a stocks and shares ISA, you’ll next need to consider how to manage your account.

Experienced investors, or those wanting a more hands-on approach, may choose to handpick and monitor their own investments – also known as do-it-yourself (DIY) investing. There are even stocks and shares ISAs specifically designed for this purpose, called ‘self-select ISAs’.

However, if you’re new to investing, don’t have time to regularly review your account or are slightly more risk-opposed, you could have a professional fund or investment manager take responsibility for the assets in your stocks and shares ISA. Alternatively, some investment platforms offer ‘robo-advisers’ that automatically select investments on your behalf based on computer algorithms. 

While managing your stocks and shares ISA yourself is often the cheapest approach, it’s important to assess whether an investment manager could help you to minimise losses and achieve greater returns.

Do I need a fund manager?

Funds are a particular type of financial product in which money from a group of people is pooled together and spread across a range of investments. Most are overseen by a fund manager.

However, if you’re looking for someone to take care of your personal portfolio, you may want to consider an investment manager.

What is the difference between an investment manager and a financial adviser?

Whereas a financial adviser will help you to identify long-term monetary goals and devise broader strategies to meet these targets, an investment manager typically has a much narrower focus and is responsible for the day-to-day active running of your portfolio.

This includes conducting thorough research and analysis of the markets, carefully selecting where to invest your money and monitoring its performance, as well as ensuring that any investments align with your risk profile.

When might you need an investment manager?

An investment manager may be useful if…

• You’re new to investing and not sure where to put your money
• You don’t have time to conduct the necessary research before investing
• You want to make sure your investments align with your attitude towards risk
• You want to diversify your portfolio by investing in assets you may otherwise have overlooked.

When an investment manager might not be needed

On the other hand, you may not need an investment manager if…

• You’re an experienced investor
• You have both the time and desire to research your investments
• You’re comfortable with the possibility of losing money
• You’re investing in passive funds, such as ETFs, which automatically track the performance of a particular index.

That being said, while utilising an investment manager could minimise risks, it doesn’t prevent your money from making a loss.

Understanding risk and reward in stocks and shares ISAs

What’s your attitude towards risk?

Investing always presents a risk to your capital, however, some types of investments carry higher levels of risk than others. For instance, investing in smaller companies or emerging markets will often be more volatile than investing in a well-established business or region.

When opening a stocks and shares ISA, you should be fully aware of and comfortable with any risks involved with your investment. 

Types of risks in stocks and shares ISAs

Some of the specific risks associated with investing include:

Market volatility

There’s a real possibility your investment could decline in value depending on the trajectory of the market. The stock market itself is influenced by a wide range of factors but hangs largely on investor sentiment.

Strong economic or industry-specific growth could instil confidence in investors and see rise in demand, thereby causing the value of your investments to increase.

Conversely, an economic downturn or geopolitical uncertainty (such as a global conflict or change in leadership) could discourage investors and cause stock prices to fall.

Liquidity risk

Another risk is being unable to sell your assets quickly at a reasonable price if in need of immediate cashflow or in response to rapidly changing market conditions.

Some investments can be harder to cash-in than others; stocks and shares ISA provider, Trading 212, lists small-cap stocks, high-yield bonds and some corporate bonds posing a high liquidity risk.

Losing out to inflation:

In order to see your money grow in real terms, the returns on your investment must outstrip the rate of inflation. If costs of goods and services rise more quickly than your investments, your hard-earned cash risks losing purchasing power (i.e. the same amount of money buys you less over time).

Exchange-rate risk:

Also known as ‘currency risk’, this is where investors in foreign assets could incur losses as a result of fluctuations in exchange rates.

What are the drawbacks of stocks and shares ISAs?

Aside from your capital being at risk, stocks and shares ISAs also come with some other potential drawbacks:

• Stocks and shares ISAs can be expensive due to the various fees involved – especially in comparison with other types of ISAs.

• For the best chance of success, you typically need to leave your money invested for a significant amount of time; it’s generally recommended you stay invested for a minimum of five years.

• The maximum amount you can pay into a stocks and shares ISA per tax-year is £20,000 (providing you don’t contribute to any other ISAs); this may be a drawback if you’re looking to invest a larger lump sum.

What happens if your stocks and shares ISA provider goes bust?

Investments of up to £85,000 in a stocks and shares ISA are protected by the Financial Services Compensation Scheme (FSCS) should your provider go bust, so long as it is regulated by the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA). 

Importantly, this cover doesn’t extend to losses made on your investments.

Is it safe to have more than £85,000 in a stocks and shares ISA?

If you hold a more substantial amount of money in a stocks and shares ISA, bear in mind any sum over the £85,000 threshold won’t be protected by the FSCS should a provider fail. Because of this, you may want to consider spreading your cash across accounts from different financial institutions to make sure it’s covered.

Taxation and tax benefits of stocks and shares ISAs

What are the tax benefits of a stocks and shares ISA for high earners?

Stocks and shares ISAs are a tax wrapper, which means they shelter your investments from both Income and Capital Gains Tax (CGT). They may particularly appeal to high earners who pay either a higher- or additional-rate of tax and may therefore face a bigger tax bill when using another type of investment account.

Are dividends from stocks and shares ISAs taxed?

No, you don’t need to worry about paying tax on any dividends received from an investment within your stocks and shares ISA.

However, you will need to carefully consider what to do next with your dividends:

Can I re-invest dividends in a stocks and shares ISA without tax?

Any dividends received on an investment will automatically be paid into your stocks and shares ISA, and you’ll have the choice of either reinvesting or withdrawing them. While reinvesting your dividends at this point won’t impact your tax-free allowances, note reinvesting the money in a stocks and shares ISA after withdrawing it will still count towards your annual ISA allowance.

Advanced considerations and alternative investment options

What is the average return on a stocks and shares ISA? 

In the year to February 2025, the average stocks and shares ISA experienced a growth of 11.86%, while the average cash ISA returned 3.80% over the same period. 

This is a notable improvement from the year to February 2024, when a typical stocks and shares ISA grew by just 2.80%, and demonstrates how some volatility year-on-year is to be expected. But, keep in mind returns are never guaranteed. 

What is the best performing stocks and shares ISA?

In terms of the best performing fund sector, Financial & Financial Innovations saw a significant increase of 34.74% in the year to February 2025. In contrast, Latin America fell by 11.15% and was the worst performing fund sector over the same period.

However, past results aren’t indicative of future performance; the China/Great China sector declined by more than 30% between February 2023 and 2024 but returned growth of over 20% in the year to February 2025.

What are fractional shares in ISAs?

Rather than buying a whole share in a company or ETF, it’s possible to purchase a smaller portion – known as a ‘fractional share’. However, until last year, holding fractional shares in a stocks and shares ISA was prohibited.

Fortunately, a new policy introduced by the UK Government in November 2024 means it’s now possible for stocks and shares ISAs to contain certain fractional shares; the objective is to “allow investors at all income levels to save and invest in ways which best meet their needs”.

What is diversification in a stocks and shares ISA?

Diversification, meanwhile, is an investment strategy that seeks to maximise returns and minimise losses by spreading money across a variety of different assets, instead of holding all your eggs in one basket. There are four main types of assets you can invest in, known as ‘asset classes’:

• Equities, e.g. stocks and shares
• Fixed income, e.g. corporate or Government bonds
• Cash, e.g. money market funds (MMFs)
• Property, e.g. real estate investment trusts (REITs)

Should one asset perform poorly, the idea is that gains from your other assets could help to offset any losses.

Are commodities (e.g. gold or silver) included in stocks and shares ISAs?

While you can’t hold physical commodities, such as gold or silver, in a stocks and shares ISA, some platforms and providers may let you invest in ETFs that mirror the performance of these markets.

Related guide: How to invest in commodities

Rebalancing and maintenance of your stocks and shares ISA

Although it’s usually recommended to invest for a minimum of five years, there may come a point when the assets in your stocks and shares ISA no longer meet your requirements, or you could find your goals and risk profile shift over time.

That’s why you may want to consider occasionally ‘rebalancing’ your portfolio; this involves selling some assets and buying more of others to help keep your stocks and shares ISA on track to meet your goals.

Special situations

Are there considerations for non-UK residents or expats?

Only UK residents (i.e. those who have spent 183 days or more in the UK within a year) can subscribe to a stocks and shares ISA. This means you’ll no longer be able to pay into your account after moving abroad.

Nevertheless, expats still have the option of transferring their ISA to another provider and can resume making contributions if they return to the UK and become a resident.

Can I use a stocks and shares ISA for retirement?

A stocks and shares ISA could form part of your savings for retirement.

While pensions generally offer greater tax benefits and accept more substantial contributions, you usually only gain access to your pot after reaching the Normal Minimum Pension Age (NMPA) which currently stands at 55 (but is set to rise to 57 from 2028).

In contrast, there is no such age restriction when withdrawing returns from a stocks and shares ISA, and these accounts may therefore appeal to those wanting to build a nest egg with which to retire early. Find out more with our guide on whether to invest in an ISA or your pension.

Alternatively, if you’re under the age of 40, you could consider opting for a purpose-built stocks and shares Lifetime ISA…

What is the difference between a stocks and shares ISA and a Lifetime ISA (LISA) for retirement?

Introduced by the UK Government in 2017, the Lifetime ISA (LISA) is specifically designed to support prospective buyers in saving a deposit for a first home as well as those putting money aside for retirement. There are two types of LISA: cash LISAs and stocks and shares LISAs.

Although a stocks and shares LISA works in much the same way as any other stocks and shares ISA, there are some key differences to be aware of:

Can I transfer my pension into a stocks and shares ISA?

It’s not possible to transfer a pension directly to a stocks and shares ISA. Instead, you could withdraw the money from your pension after turning 55 (or 57 as of 2028) and reinvest it in an ISA - but bear in mind doing so comes with potential tax implications.

Firstly, as you can only take up to 25% of your pension tax-free, chances are you’ll need to pay Income Tax if you withdraw a larger sum or the full amount.

Also remember you can only deposit a maximum of £20,000 across all ISAs each tax-year; if you take more than this from your pension, at least some of your money will fall outside of a tax wrapper.

Ultimately, you should consider your reasons for wanting to transfer your pension to a stocks and shares ISA carefully; pensions themselves contain investments, and there is no guarantee you’ll receive better returns by moving to a stocks and shares ISA.

Can I transfer my ISA into a SIPP?

Likewise, although you can’t transfer your stocks and shares ISA directly to a Self-Invested Personal Pension (SIPP), you could sell your investments, withdraw the money and pay it into your pension.

The benefit of this is you may be entitled to tax-relief on your pension contributions (providing you don’t exceed your annual allowance which stands at the higher of your annual earnings or £60,000). However, potential drawbacks are you won’t be able to access your pension until you reach 55 (or 57 from 2028) and you’ll be charged Income Tax when withdrawing three-quarters of the pot.

What happens to my ISA if I die?

After you pass away, the investments in your stocks and shares ISA can be sold, and the proceeds paid to any beneficiaries named in your will; this will form part of your estate and may be subject to Inheritance Tax (IHT).

Only a spouse or civil partner can inherit the monetary value, or the investments themselves, without being liable for IHT. Providing you still live together, your spouse or civil partner is entitled to an extra tax-free savings allowance when you die equivalent to the amount held in your ISAs - known as an Additional Permitted Subscription (APS). This enables them to inherit the contents of your account while retaining its tax-free status and without it impacting their own ISA allowance.

Even if you leave your money or investments to another beneficiary, your spouse or civil partner remains eligible for a temporarily heightened allowance and can use it to deposit their own cash in ISAs.

Related guide: The rules on inheriting ISAs

Other useful links: Inheriting an ISA from your spouse or civil partner | Individual Savings Accounts: If you die

Additional information and practical considerations

What happens to income from a stocks and shares ISA?

Any returns on your investments can either be reinvested, held as cash in your stocks and shares ISA or paid away into another account.

Who are stocks and shares ISAs best suited to?

Stocks and shares ISAs are generally best suited to those who don’t mind putting their capital at risk and are willing to remain invested over a long period of time (usually five years or more).

• Don’t want to put your money at risk? If you’re saving towards a long-term goal, you could consider a fixed rate cash ISA as an alternative. Compared with stocks and shares ISAs, they are far less risky as they offer guaranteed returns.

• Need access to your cash? If it’s likely you’ll need to dip into the cash in your account at some point in the near future, you may be better off with an easy access cash ISA. These accounts are usually designed to allow unlimited withdrawals from your savings pot.

How to compare stocks and shares ISAs

It can be difficult to know where to start when comparing stocks and shares ISAs.  When it comes to traditional savings accounts or cash ISAs, the best account is usually the one which offers the highest rate, but returns can never be guaranteed when investing. Instead, you’ll need to rely on other factors to aid your decision-making process:

• Investment options: Not all stocks and shares ISA providers offer the same range of investments. Take time to review the stocks and funds available – particularly if you have a specific investment in mind.

• Platform features: If you’re new to investing, lack confidence or don’t have time to actively manage your portfolio, a platform that offers the support of a robo-adviser or fund manager may be preferred. Alternatively, a DIY platform may appeal to those looking for a more hands-on approach.

• Risk level: Depending on the type of platform and the investment opportunities it offers, some could be considered riskier than others. You should make sure the provider you choose caters to your risk profile before getting started.

• Fees and charges: There are no universal flat fees when it comes to stocks and shares ISAs and naturally some providers will be more expensive than others. Be sure to check what fees are involved and that you can comfortably afford them.

Our chart above also contains useful information, such as the minimum lump sum and monthly investment amounts, and how many funds are available with each provider, to help you with your stocks and shares ISA comparison.