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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 ISA

from Legal & General

Allows ISA Transfers
Regular Savings
  • Fund Choice: Managed, Tracker, Self-Select
  • Invest From: £20 per month or £100 single

Why we like it: Legal & General has over 9 million customers in the UK, and over £1.1 trillion of assets under their management (as at 31st December 2019). Their Stocks & Shares ISA offers a wide range of investment options, whether you want ready-made funds, low cost index trackers, or the ability to pick your own. You can invest up to £20,000 this tax year, with a low minimum of £100 lump sum or £20 per month, and you can manage your account easily online. 

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%

Share Dealing ISAs

Investment ISA

from Barclays Smart Investor

  • Trade From (standard trader rate): £3 for funds (or £1 for each automated regular investment)

Why we like it: Invest in over 2,000 funds plus Exchange Traded Funds (ETFs), investment trusts, shares and more. UK-based customer support team available by phone and online. You have until 5th April to use your £20,000 ISA allowance. 

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

Investment Fund Supermarket ISAs

Vantage 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: Shelter up to £20,000 this tax year with the low cost, award-winning ISA. The UK's number 1 platform for private investors. 

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: 2,000+ Funds
  • Invest From: £50pm

Why we like it: Invest from as little as £50 a month or with a £1,000 lump sum. Investment choice from over 100 fund providers, giving you access to 2,000+ funds. One low-cost service fee of 0.35%*. 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: 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.

Important Information: * depending on how much you have invested

Share Dealing ISAs

Youinvest ISA

from AJ Bell

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

Why we like it: Voted ‘Best ISA Provider 2017’ in the City of London Wealth Management 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. 

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

New (tax) Year, New You: How to Make the Most of Your ISAs in 2020/2021

6th April 2020

Dawn breaks on the morning of April 6th 2020 – the sun is (potentially shining) and the new tax year has begun. With £20,000 of possibilities for your tax allowance for this new tax year – we’ve answered the most common questions that savers have at this stage. 

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