How to buy shares in a company

Want to know how to buy shares in the UK? Follow these 7 simple steps and you'll be a share owner.

Learn how to buy shares Step by step instructions
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Buying shares in a company is one of the ways that people are attempting to beat the notoriously low interest rates currently on offer. In fact, in a recent survey that we did, 43% of potential investors said that they were considering buying shares because of poor interest rates. Investing can potentially boost your savings as the value of your investments might rise as the company grows, and you may receive dividends. There are many ways to invest in the stock market – buying individual company shares is one way.

When a company lists on a stock exchange, it offers shares, which are little pieces of the company. When you buy shares, you get to vote on some of the company decisions and might be able to receive dividends. The share price of the company moves up and down based on factors that include decisions made by the company, how it performs financially and positive or negative press coverage. This helps to decide on how the company is valued.

How to buy shares

Buying shares in a company is actually pretty simple. Follow these 7 simple steps to get started. We’ve detailed each one in this guide.

  1. Choose an online share-dealing platform
  2. Sign up for an account
  3. Choose the shares you want to buy
  4. Place your order to buy shares
  5. Pay for the transaction
  6. Monitor the performance of your shares
  7. Sell your shares (if you want to)

Best trading platform for beginners: Hargreaves Lansdown

Hargreaves Lansdown Fund and Share Account
Finder score
★★★★★
User survey
★★★★★
Invest now
Capital at risk
We chose the Hargreaves Lansdown as our top pick because:
  • UK’s largest investment manager with huge range of investments
  • Invest in funds, global shares, bonds, ETFs and more
  • Detailed online resources and Bristol-based helpdesk available

Need to know: Not the cheapest option around, especially if you’re trading small amounts.

Read our review of Hargreaves Lansdown.

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

Step 1: Choose an online share-dealing platform

First things first: you’ll need to find a broker to buy and sell shares. These days, most people go for an online share-dealing platform, also known as an online broker or stock brokerage app, although you can still find brokers that work face-to-face or over the phone in the UK.

The right online share-dealing platform for you will depend on how confident you are when investing, whether you want to do it all yourself, and what fees are involved for the volume of trading you’re looking at.

Ask yourself these questions to help you choose:

  • Are you happy to buy and sell shares on your own? If you’re not, you may be better suited to a robo-advisor.
  • Have you used your ISA allowance? You have a set amount in each tax year that you can save in an individual savings account (ISA) without paying tax on your profits. The allowance for the 2021/2022 tax year is £20,000. If you’ve not used your allowance yet, you might want to choose a provider that lets you use it, such as Freetrade or Trading 212
  • Do you want to be given ideas or are you happy to find them yourself? Some providers have watch lists and investment ideas to help you choose.
  • How much research and information do you need? Some providers have a whole host of research that might look daunting but can actually be really helpful. Try to figure out what information you would benefit from when choosing a provider.
  • What is the pricing structure? You can get flat fee providers, ones that just charge commission for the trades, ones that have provider fees and others that only charge foreign exchange fees – figure out how often you’ll trade and how much this might cost you.

Your choice could also depend on what else you want to trade. Will you be buying funds (such as exchange-traded funds (ETFs)) alongside individual shares, for example? Do you use investment trusts? Check that the online broker you pick can meet your needs.

Step 2: Sign up for an account

Once you’ve chosen a platform you’ll need to register for an account. This step is usually free, but keep in mind that some providers may charge subscription fees or other ongoing fees for features such as market research. This bit is super simple.

The registration process takes place online and if you’re a new customer you’ll usually need to provide:

  • Personal details. Your name, email, date of birth, address, national insurance number and employment status.
  • ID. Such as your passport or driving license.
  • Payment details. Either a bank transfer, debit card or credit card that you’ll use to fund your share-dealing account.

Finder also has a guide that goes into more detail about how to open a share-dealing account.

Step 3: Choose the shares you want to buy

Now you’re onto the fun stuff: choosing companies to invest in. You can choose companies that you’re really familiar with, like the brand that makes your mobile phone, or the cereal that you eat. You could also try to find stocks that match your values — if you’re vegan, you could look into plant based food manufacturing companies. If you’re keen on renewable energy, you could find companies that provide this.

If you’re nervous about diving right in, you could monitor the share performance over time. This can be done with trading apps, which often have watch lists that keep an eye on movements for you. You could also invest in it with a virtual portfolio — this is where you use virtual money to see how you’d get on. Some providers with virtual portfolios are Trading 212 or eToro.

Give it a few months or so, then re-evaluate. Before you make the decision to dive in with actual real-life money, ask yourself some questions.

  • Has the share price changed since you first looked at it? If so, are you happy to buy it at the new price?
  • Are there any new risks? It’s worth checking the headlines or recent company announcements to make sure no new risks have emerged.
  • Is the stock very volatile? If the share price looks like it’s going a bit mad, it might be because a lot of investors are piling in (or jumping ship). This happened with Gamestop. If a lot of trading is happening, you might not get the price that you hit “buy” at.
  • Can you afford the shares? Remember, only invest what you can afford to, as the value of shares can go down as well as up. It’s not worth going into debt to buy investments.

In general, if you’re starting out, invest in companies you understand. The latest technology stock may look really good, but do you understand how it makes money?

Equally, make sure you’re buying for the right reasons – is it because you want exposure to a fast-growing company or just because someone has told you it seems like a good idea?

Our guide to the best stocks to buy now tracks what’s trending on social media and popular trading platforms.

Step 4: Place your order to buy shares

Once you’ve decided which shares to buy, purchasing them is usually the easy bit! If you’re in your online account, you’ll get offered a price and can just click a button to “deal now”. You’ll receive a contract note shortly afterwards.

Remember that this isn’t like buying milk from a supermarket – there’s not an endless supply of shares. The stock market you’re buying from is generally the “secondary market”, which means someone’s got to sell their shares for you to buy them. This is usually straightforward and very quick, but you could wait a little longer and the share price could change in this time.

There are a few different types of order that you can make — we’ve detailed some of the most common ones below with some examples of how they work.

Order typeWhat it doesFor example
AskHow much the seller wants for the stock“Jack, when you sell the cow, don’t take any less than £5 for it”
BidHow much the buyer wants to give you for the stock“Don’t spend any more than a few magical beans for that cow, you hear me?”
Market orderWhen you buy or sell a stock to be carried out as soon as possible at the best available price“Go out and sell the cow, quick! We’ll take £4 for it if it goes today!”
Limit orderWhen you buy or sell a stock but want it to be a specific amount“If we can’t get £5 for the cow, we won’t sell it. We’ll put up an advert for the cow and wait until someone offers £5.”
Stop loss/ stopAn order where you set the price you want to buy or sell at, and once the price is met, it triggers an order. “If we can’t get £5 for the cow, we won’t sell it. We’ll wait until people are willing to pay £5 and try again.”

Step 5: Pay for the transaction

You’ll need to have sufficient funds in your online share trading account to cover the cost of the transaction, including the brokerage fees that apply.

A bit about dealing charges

Typically, you’ll pay a one-off charge for buying and selling shares. If this is a fixed amount (say £10), it becomes more economical on larger share purchases.

Alternatively, some brokers charge a percentage of the assets that you hold on the platform. You’ll need to crunch the numbers to work out which one of these options is likely to suit you best.

You should also factor in 0.5% of the value of the trade for Stamp Duty Reserve Tax (SDRT). If you’re buying international shares then you might need to pay a foreign exchange fee which is worked out as a percentage of the transaction value.

For a bit of light reading, you can check out our guide to investment fees – which will explain all the industry terms you’re likely to come across.

Step 6: Monitor the performance of your shares

There are two ways you make money from investing: one is from an increase in the capital value of the shares, the other is when the shares pay dividends.

You’ll need to monitor the performance of your shares, and the frequency with which you monitor them will depend on your investment strategy. For example, if you have a long-term investment strategy, you may only check in and see how your shares are performing every month. If you have a medium-term strategy, it may be a good idea to check each night or each week. Whichever option you choose, you can review the performance of your investments by logging into your online trading account.

You may also want to set limits on your share trades. For example, you could set an automatic sell if the shares lose more than 10% or gain more than 50% of their value. This will limit how much money you can lose, or it may prompt you to sell out when the shares get ahead of themselves. We’ve explained these a little in Step 4.

Dividends are where companies choose to share some of their profits with shareholders. These are paid based on the number of shares you own and can be reinvested to buy more shares. For example, a company might pay £0.50 per share. If you owned 15 shares, then you’d get £7.50 in dividends. We’ve got a whole guide on dividends if you want to find out more about them.

Step 7: Sell your shares (if you want to)

When you decide to sell your shares, the process is very similar to the method of buying shares described in Step 4. When you’re logged into your online trading account you’ll be able to select an option to sell your shares at the current market price. You will receive the appropriate confirmation that your stock has been sold, and the revenue from the sale will arrive in your online account.

And that’s it, you now know how to buy shares in the UK! All that’s left to do is put these steps into action and you’ll own shares in a company in no time.

Share dealing platform comparison

Table: sorted by promoted deals first
Name Product Ratings Finder rating Customer rating Min. initial deposit Price per trade Frequent trader rate Platform fee Offer Link
IG Share Dealing
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
£250
UK: £8
US: £10
EU: 0.1% (min €10)
UK: £3
US: £0
EU: 0.1% (min €10)
£0

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Platform details
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eToro Free Stocks
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$10
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interactive investor Trading Account
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£0
£7.99 (with one free trade per month)
£0
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Capital.com
Capital.com
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£20
£0
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Degiro Share Dealing
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★★★★★
★★★★★
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★★★★★
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£0.01
UK: £1.75 + 0.014% (max £5)
US: €0
N/A
£0

Capital at risk

Platform details
Hargreaves Lansdown Fund and Share Account
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
£1
£11.95
£5.95
£0

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All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

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