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19th
Feb 2020
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Is a Stocks and Shares ISA Safe?

Is a Stocks and Shares ISA Safe?

Are you interested in opening a Stocks and Shares ISA, but worried how safe your money would be? Investments can never be a 100% safe bet, but with Stocks and Shares ISAs you are given some protections for your cash. 

There are different kinds of ISA in which you can put your savings in a tax-free wrapper. Stocks and Shares ISAs are accounts where your money is invested.

They’re a good way for new investors to get started in the stock market – while making sure they are using their tax-free ISA allowance for a tax year.

With stocks and shares ISA you can either own a “share” in a company, or you can own multiple shares (known as stocks) in different companies.

If you put your money in a Stocks and Shares ISA, then your money will be invested. If that investment goes well, you’ll enjoy tax-free interest returns on your investment.

Risk and Return

  • The short answer to the topic of this blog is that no Stocks and Shares ISA is 100% guarantee of returns - the stock market can go down as well as up.
  • You need to be aware when opening a Stocks and Shares ISA that you could lose money on your investment rather than gaining it. This is the risk which comes with investment.
  • The rule of thumb is that you should invest for at least five years, as this will allow for the normal fluctuations of the stock market - but you need to be ready to move your investment if your ISA regularly performs badly.

Am I protected if something goes wrong?

  • If things go very pear-shaped, your money is protected up to a certain extent.
  • Most ISAs are regulated by the Financial Conduct Authority (FCA). As an independent regulatory body, they are the regulate conduct for most of the UK’s financial firms and services.
  • So, if the fund manager of your ISA goes bust and is unable to repay your money, they should be covered by the Financial Services Compensation Scheme (FSCS). This is the UK’s statutory compensation scheme. In this case, you can be compensated up to a certain amount. You could claim up to £85,000 per person per financial institution.
  • This will protect most people, but if you have considerable funds in a Stocks and Shares ISA this might not cover you. The FSCS covers up to £85,000, so if you have invested more than this in one place you may want to re-think your spread of investment funds.
  • The one thing you are not protected from is a badly performing investment.

If you’re incredibly risk-averse and care far more about your money being locked away safely in an account than risking it in an investment – then a Stocks and Shares ISA might not be for you. Instead you might want to look at a Cash ISA.

Read moreon the best Investment ISAs, to find the best rate for you.

Selected ISAs

Stocks & Shares ISAs

from Legal & General

Allows ISA Transfers
Regular Savings
  • Fund Choice: Choose from 50+ L&G funds including low cost index tracker funds, multi asset, fixed income, property & equity funds. Alternatively let L&G managed your funds for you based on your risk profile.
  • Invest From: £20 per month or £100 single

Why we like it: Legal & General can help you save for a brighter future with their stocks and shares ISA. Choose from over 50 funds, including ready-made investment options that spread your money across different investments for you and sustainable funds that seek to make a positive difference without compromising financial returns. Please remember with investments, your capital is at risk, the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

Important: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

Stocks & Shares ISA

from Wealthify

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Choose your risk profile and have an investment Plan built and managed for you
  • Invest From: No minimum

Why we like it: Choose your level of risk from cautious to adventurous and have a plan expertly created and managed for you. Create multiple plans with different risk levels, Ethical plans also available. Invest as little or much as you like, add regular payments and top up whenever you like. Withdraw money or transfer out without notice or penalty fees. Wealthify app lets you check how your Plan is performing, manage your transactions and provide investment news and insights. Simple annual management charge of 0.6%

Investment Fund Supermarket ISAs

Stocks & Shares ISA

from Hargreaves Lansdown

Allows ISA Transfers
  • Protection Scheme: FSCS
  • Fund Choice: 2,500+ Funds
  • Invest From: £25 pm

Why we like it: Choose your own funds or alternatively a ready made portfolio. Market-beating savings and discounts of up to 5.5%. No charge to buy and sell funds. Low, tiered annual charges for holding funds, with a maximum of just 0.45% per annum. Free fund updates and analysis from experienced research team. Invest with a financially secure, FTSE 100 company.

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

Stocks & Shares ISA

from Fidelity

Allows ISA Transfers
  • Protection Scheme: FSCS
  • Fund Choice: Select from over 4,000 funds. Large selection of UK shares. Investment trusts, ETFs and investment portfolios put together by experts.
  • Invest From: £25 per month or lump sum from £1,000

Why we like it: Investment choice from over 100 fund providers, giving you access to 4,000+ funds. Great service – from investment guidance on website through to UK-based phones team. PathFinder, Select 50, Investment Finder - investing tools for beginners to advanced investors. 24/7 access via online Account Management system.

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

Share Dealing ISAs

Share Dealing ISA

from AJ Bell

  • Trade From (frequent trader rate): £4.95
  • Trade From (standard trader rate): £9.95

Why we like it: Voted ‘Best Execution Only Broker 2020’ in the ADVFN International financial Awards. Place 10 deals or more per month and pay only £4.95 per online deal in the next month. Deal from £1.50 and never pay more than £9.95 per online trade. AJ Bell is one of the UK’s largest online investment platforms with £48.3 billion in assets under administration for 262,000 customers.

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

High Income ISAs

High income ISA ideas:

ISAs Products

Cash ISAs

Fixed Rate & Instant Access ISAs:

Cash ISAs: 

Stocks & Shares ISAs

Types of Stocks and Shares ISA include: 

Stocks and Shares ISAs

Latest News

Our Top Picks for Technology Stocks and Shares ISAs

19th January 2021

The tech industry has been booming for the past fifteen years; and it seems to be a rollercoaster that only goes up. The tech bubble has yet to burst, with companies coming out with more and more technological developments and consumer demand is certainly not slowing down. So, for the tech-savvy investor who wants to put their pennies behind this strong growing industry, we’ve put together our top three picks for Technology Stocks and Shares ISAs. 

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