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Feb 2020

What is a Stocks and Shares ISA?

What is a Stocks and Shares ISA?

Money put into Stocks and Shares ISAs is invested – which is why they're also known as investment ISAs. They're a useful way for first-timers to get involved in the stock market, and also make the most of their tax-free annual ISA allowance. But what are they?

There are various kinds of ISAs which can hold your savings or investments in a tax-free "wrapper." They include Property ISAs, Lifetime ISAs, Fund Supermarket ISAs and Ethical ISAs. A Stocks and Shares ISA is another ISA option - but one which offers better rates of return than the low rates available on Cash ISA deposits. .

“Stocks” and “shares” are generally interchangeable terms, though they have slightly different meanings:

  • “shares” can refer to owning part of one particular company (“I own shares in Unilever”)
  • “stocks” can refer to shares in a number of different companies (“I own stocks in the renewable energy industry”)

Where do I get Stocks and Shares ISAs from?

The structure for Individual Savings Accounts (ISAs) was set up by the UK government as a way of encouraging savings and investments, by allowing British taxpayers to earn up to a specified amount from them each year, tax-free.

The ISAs themselves are offered by a wide number of banks and financial services companies. You can open Stocks and Shares ISAs with:

  • Online “fund supermarkets” (select and manage your funds yourself)
  • “Robo-advisers” (an online investment service uses algorithms to manage a portfolio)
  • Banks
  • Stockbrokers
  • Wealth managers

What KINDS of Stocks and Shares ISAs are there?

A Stocks and Shares ISA lets you invest in:

  • Shares in companies (you directly own a share of the company and its profits – or losses)
  • Funds (your money is pooled with other investors’ money in a fund which then invests it in a variety of places: you own “units” of the fund)
  • Investment trusts (you buy shares in a company which has a fixed number of shares; the company does the investing)
  • Bonds traded on the bond market: either government bonds also known as “gilts” (you own part of a government’s borrowing on the financial market), or corporate bonds (you own part of a company’s borrowing)

You can also hold cash in your Stocks & Shares ISA.

How can I make money with Stocks and Shares ISAs?

Savings and investments in ISAs are covered by the government’s Financial Services Compensation Scheme (FSCS). The government will compensate you for up to £50,000 if the company you invest with goes under.

But you’re not protected for an investment that just performs badly.

The stock market can go down as well as up.

Everyone will advise you that you should invest in Stocks and Shares ISAs for at least five years, to allow for the normal fluctuations of the stock market.

But you will also need to be prepared to move your investment elsewhere if your ISA is performing consistently under-performing.

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

Investment Fund Supermarket ISAs

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.

* depending on how much you have invested

Special offer:

Invest and get £25 cashback » 

Build your savings with an ISA and receive £25. Exclusions, T&Cs apply.

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.

Selected ISAs

Stocks & Shares ISA

from Legal & General

Allows ISA Transfers
Regular Savings
  • Fund Choice: Managed funds tailored for you or choose yourself from over 50 funds
  • 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.

Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal 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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