How to buy shares in a company

Want to know how to buy shares in a company and you're in the UK? Follow these 6 simple steps and you'll be a share owner.

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IG

Buy and sell UK shares for as little as £5 per trade with IG

  • Low dealing costs
  • Huge choice of investments
  • Out of hours US share dealing
  • Dedicated support
  • Capital at risk, investments may fall
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. Capital is at risk.

Want to know how to buy shares?

Buying shares in a company is actually pretty simple. Even you can do it! Follow these simple steps to get started:

  1. Find the right broker
  2. Open a share trading account
  3. Add money to your investment account
  4. Find shares you want to buy
  5. Buy your shares
  6. Monitor the stock performance often

Find the right broker

First thing’s first, you’ll need to find a broker to buy and sell shares. Most people go for online brokers these days (though you can still find ones that work face-to-face or over the phone in the UK).

The right broker for you will depend on how confident you are when investing, whether you just want to DIY or would like a bit of hand-holding.

Ask yourself these questions to help you choose a broker:

  • Are you happy to buy and sell on your own?
  • Would you prefer someone at the end of a phone?
  • Do you want someone who gives you ideas or are you happy to find them yourself?
  • How much research and information do you need?

You should also look at the pricing structure. Some brokers offer tasty deals for regular traders which can make it cheaper to buy and sell. However, it may not be as efficient for those who want to buy and hold.

It will also depend on what else you want to trade. Will you be buying funds alongside individual shares, for example? Do you use investment trusts? Check that the broker you pick can meet your needs.

You can use our table below to help you find the right broker for you.

Open a share trading account

Most brokers will have a choice of accounts and almost all will offer an ISA account and a normal fund/share account.

An ISA account will usually be your first port of call. You have a £20,000 limit each year, and it will shelter any income or capital gains on your investment from tax.

If you plan to invest more than this in one tax year, then it’s worth opening a standalone dealing account as well.

Luckily for you, we’ve got a whole guide on how to open a share dealing account.

Add money to your investment account

You should be able to top up your account directly from your bank account. Only invest money that you are willing to risk. Owning single shares is risky.

No matter how much research you’ve done on a company, it can be difficult to see what’s around the corner. If that company gets into difficulty then you could lose some or all of your money.

A bit about dealing charges

Typically, you will 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.

Some brokers charge a percentage of the assets you hold on the platform. You will need to crunch the numbers to work out which one 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).

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

Find shares you want to buy

You should identify companies on the stock market with shares that you want to buy. You should then monitor this over time.

When re-evaluating the company before you invest, 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? It is worth checking the headlines or recent company announcements to make sure no new risks have emerged. 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 its money?

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

Buy your shares

This is usually the easy bit. If you’re online, you’ll get offered a price and you just click a button to “deal now”. You’ll receive a contract note shortly afterwards. The same is true if you buy over the phone.

Monitor the stock performance often

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 they pay dividends. You may want to set limits on the trade. For example, you could set an automatic sell if the shares lose more than 10% or gain more than 50%. This will limit how much you can lose and may prompt you to sell out when the shares get ahead of themselves.

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.

Use our table to compare some of the UK’s leading brokers

Updated March 31st, 2020
Name Product Price per trade Frequent trader rate Platform fees
Hargreaves Lansdown Fund & Share Account
£11.95
£5.95
Transfer out fee
Your capital is at risk.
IG
0% commission on US shares, and £3 on UK shares
From £5
£0 - £24 per quarter
Your capital is at risk.
eToro Free Stocks
0% commission, no markup, no ticket fee, no management fee
N/A
Withdrawal fee & GDP to USD deposit conversion
Your capital is at risk.
Saxo Markets Share Dealing Account
£8
0.05% (min £5)
0.12% per year & transfer-out fee
Your capital is at risk.

Compare up to 4 providers

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