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Feb 2020

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 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

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Choose from over 2,500 funds, shares, investment trusts and more to build your portfolio. UK and overseas shares. Corporate and government bonds. Exchange Traded Funds (ETFs). Ready-made portfolios to suit your goals and attitude to risk from £1,000. Expert research to help make your decisions. Investment trusts and much more. Capital at risk.Tax & ISA rules apply
  • Invest From: £25 pm or from £100 lump sum

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

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Choose from over 4,000 investment options, including one of the widest fund ranges in the UK, plus shares, investment trusts and exchange-traded funds. There’s also expert guidance to help with your investment decisions, which includes a selection of tools and insights from Fidelity’s experts. Capital at risk. Tax and ISA rules apply.
  • Invest From: £25 through regular savings or £1,000 lump sum

Why we like it: Fidelity has lots of investment options, plus an extensive range of guidance tools to help you decide what to invest in. Their award-winning ISA is easy to start and offers great value, their a typical service fee of just 0.35%. Other ongoing charges apply. On top of that, everything is backed by Fidelity’s 50 years of investment experience.

Important: The value of investments can go down as well as up so you may get back less than you invest. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.

Tax treatment depends on individual circumstances and all tax rules may change in the future.

Share Dealing ISAs

Share Dealing ISA

from AJ Bell

Allows ISA Transfers
  • 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

5 Considerations for Your Next Investment ISA

15th March 2021

You've decided to invest your savings into a Stocks and Shares ISA. You'll be using your tax-free ISA allowance for this year before the deadline, while also investing your money for your future. But what do you need to consider before opening an account? We've put together a list of our top five considerations for you to think about before you click "apply". 

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