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.
Stocks and shares ISA comparison
ISAs let you invest your savings without paying tax on your profits. Compare the best stocks and shares ISAs in our table, and learn about ISA tax benefits.
Stocks and shares individual savings accounts (ISAs) let you invest your savings without paying tax on your profits (up to an annual allowance). They’re worth considering if you have money to put aside each month to invest for the long term. Some stocks and share ISAs have fully managed portfolios that you can invest into, while others let you choose individual stocks and shares to invest in. Compare stocks and shares ISAs in the table below and read our guide to what they are and how they work.
Stocks and shares ISA comparison
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Compare in more detail
|Product Name||interactive investor stocks and shares ISA||Nutmeg stocks and shares ISA||Saxo Markets stocks and shares ISA||Hargreaves Lansdown stocks and shares ISA|
|Minimum deposit||£9.99 a month||£500||No minimum deposit requirement||£100|
|Maximum annual fee||£119.88||1.12%||0.12%||0.45%|
|Type of platform||Robo-advisor and share dealing platform||Robo-advisor||Robo-advisor and share dealing platform||Robo-advisor and share dealing platform|
|Price per trade||£7.99||N/A||£8.00||£11.95|
What is an ISA?
ISA stands for “individual savings account”. The difference between putting your money into an ISA and putting it into a savings account is that any interest or profits you receive via an ISA aren’t subject to tax; whereas with savings accounts there’s a limit on the amount of interest you can earn tax-free each year.
Mostly, ISAs are just “wrappers” for savings or investment accounts, like an invisibility cloak that lets you, totally legally, hide your profits from the tax man.
Everyone has an annual limit for how much you can put into an ISA: that’s your ISA allowance, and the government can change it as part of its tax review each year. The 2021/2022 ISA allowance is £20,000. For the savers under age 18, the annual junior ISA (JISA) allowance is £9,000.
Stocks and shares ISAs jargon explained
Allowance. This refers to the amount you can contribute each year to your ISAs. The 2021/2022 ISA allowance is £20,000. You must not exceed this allowance across all of your ISAs and can’t contribute to more than one of the same type in one tax year.
Robo-advisor. This is a type of provider that invests on your behalf. They tend to cost a little more but you can put your feet up while someone else manages your investments.
Lifetime ISA (LISA). This is a type of ISA that helps you save up to buy a home or for your retirement. You can save a maximum of £4,000 per year with these and you get a 25% top up from the government.
What is a stocks and shares ISA?
A stocks and shares ISA is a type of ISA which lets you invest your savings in the stock market. As with all ISAs, you can invest up to £20,000 per year tax-free.
If you want to, you can split your allowance between different types of ISAs, such as cash ISAs or lifetime ISAs (LISAs). You need to ensure that you stay within your allowance and you can’t contribute to more than one of the same type of ISA in each tax year.
There are several ways that you can invest with a stocks and shares ISA. For example, you might do some research and open an account with a share trading provider and decide that you want to invest in companies that you know or use, like Greggs, boohoo or Barclays. You can choose the shares yourself and manage the investments yourself.
Another option is to choose a managed account, known as a robo-advisor and let the company look after the money for you. You might choose which sector you want to be invested in, or how ethical your investments are (which we cover later on), but the managers will keep track of your investments and try to ensure that they perform in the way that you want them to using some information you give them.
Some providers have both robo-advisor options (known as managed portfolios) as well as the chance to invest in specific stocks and shares.
With a stocks and shares ISA, your money is at risk – but the potential reward is growth on your investments that is typically higher than your average savings account.
Should I open a stocks and shares ISA?
Before you ask this, ask yourself what your financial goals are and what your current situation looks like.
- If you’re able to put money aside and leave it for a long time, then a stocks and shares ISA is a good bet.
- If you have lots of debt, you should look into ways to clear debt first.
- If you might need quick access to the money, you should look into a current account or easy access savings account.
- If you want to build a pot of money and still earn interest, look into simple savings accounts.
- You should also be aware that these are riskier than a savings account or cash ISA.
Before you open a stocks and shares ISA thinking you’re the next Warren Buffet, you need to weigh up whether you’re willing to take risk that comes with investing.
In the 2008 crash for instance, many people’s stocks and shares ISAs lost a lot of value. We’ve gone into just how badly it hit people’s stocks and shares below.
A simple rule of thumb is this: if your investments would keep you up at night, don’t go ahead.
How much do stocks and shares make?
There are plenty of different ways to work out how much stocks and shares return over a period of time – you can look at performance of specific providers’ funds to see how they’ve performed over several years or at specific funds. The FTSE100 is a collection of the top 100 companies on the London Stock Exchange (LSE). Since it started in 1984, the FTSE 100 has risen by 654% in price. This is an annualised return of 5.77%. At the moment, the most you can generally get in returns for a typical savings account is somewhere between 1% and 1.5%.
The returns you’ll receive could differ from these figures and remember that past performance isn’t indicative of future results. Your returns will depend on how much you invest, what you choose to invest in, and how long you invest for.
Let’s say, for example, you invested £10,000 in the FTSE 100 over a time period of 10 years (this is sometimes called an “investment horizon”).
This graph shows the rough difference between investing your money in the FTSE 100 and putting it in your average savings account. You can toggle to the table to see the numbers in a bit more detail.
Investing in FTSE 100 vs average savings over 10 years
|Year||FTSE 100 return rate (%)||Yearly return (GBP)||Average savings interest rate (%)||Yearly savings return (GBP)|
You can see the FTSE 100 had some good years and some bad years in that time.
2018 stands out as a poor year. Brexit and uncertainty around the US-China trade war put investors off, harming returns.
Then there were some good years. Yay!
The index returned 18.7%, 19.1% and 17.3% in 2013, 2016 and 2019 respectively.
Overall, for the entire 10 year period, the FTSE 100 generated a total return of 103%.
So if you’d invested £10,000 at the start of 2010, you’d have about £20,398 by the end of 2019.
If you had a stocks and shares ISA and had invested in the FTSE 100 index between 2010 and 2019, you’d have made roughly 7.4% a year. Compare that with average interest rates for savings over that time (around 1.5-2%) and you can see why lots of people turn to investing.
You can check out the performance tables for ISA providers on their websites.
Stocks and shares ISA offers
Choice of investments
£50 welcome bonus
The risks of stocks and shares ISAs
It’s not always plain sailing with stocks and shares, sometimes the waters can be choppy, for example, the financial crash in 2008.
The FTSE 100 had a terrible year in 2008, returning -28.3%.
If you’d invested £10,000 in 2008, it would have been worth just £7,170 by the end of the year.
If you’d started investing in 2008 and held your investment until the end of 2017, your annualised return for that 10 year period would be 5.7% – due to the heavy losses of the financial crash.
This is why investment returns become more stable and reliable over a longer time horizon. There’s more time to even out the peaks and troughs.
We’re not trying to spook you, just illustrating the impact of losses and the risks that come with investing.
Cash ISA vs stocks and shares ISA?
|Cash ISA||Stocks and shares ISA|
|Horizon||Shorter term||Longer term|
|Risk||Lower risk||Higher risk|
|Returns potential||Lower returns||Higher returns|
|Interest rate||Fixed||Dependent on market returns|
What can you invest in with a stocks and shares ISA?
With a stocks and shares ISA you can invest in a whole load of things. Here are a few examples:
- Shares. Invest in individual companies. Having a share is like having one fraction of the company. If the company’s value goes up the share’s value goes up, if not it goes down.
- Corporate bonds. Lend your money to a company in return for interest.
- Government bonds. Same as above, but you’re lending to the government.
- Funds. These are the most common type of investment. Funds can include shares, bonds, cash, in different combinations.
- Exchange traded funds (ETFs) These are a type of fund that are traded on stock exchanges like regular stocks and shares.
How do I choose the best stocks and shares ISA?
There isn’t necessarily a “best” ISA to go with as it depends on what you’re looking for and how you’ll use it. Many of the trading apps that we’ve named as the 6 best trading apps have ISA options, so it’s worth checking them out.
Consider the following:
- Are you planning on picking individual stocks and shares or do you want a ready made portfolio? If you want the latter, you’re looking for a robo-advisor.
- How much do you want to invest? Some providers have a minimum deposit, so take that into consideration. For some, the fees will be lower for higher amounts so roughly work out your annual fees as part of your comparison.
- Are you interested in a range of tools? If you want to use advanced charting tools or advanced company financials, check out what providers have before deciding.
- Do you want educational tools? Some providers have tools available to help you learn how to invest – consider whether these will be useful for you.
Can I invest ethically in a stocks and shares ISA?
You can! There are a few different ways you can invest ethically.
- Ethical companies.The first way is to find ethical companies and buy shares in them. You can search for individual companies here at Finder to see their ESG scores.
- Ethical funds. The second way is to find ethical funds and invest in those. Using a fund screener on your chosen provider website you can search keywords like “ethical”, “ESG”, “sustainable” and “impact” to find some.
- Ready-made portfolios. The third way is to choose a robo-advisor and invest in an ethical ready-made portfolio. Lots of providers have ethical options to choose between.
What else do I need to know?
- To open an ISA you have to be 18 or older.
- You must be a UK tax resident.
- You can only contribute to one stocks and shares ISA per tax year.
- You can transfer-in to most new ISAs for free.
Pros and cons of stocks and shares ISAs
- Potential for higher returns than savings accounts
- No tax on interest or dividends
- The chance to help companies you love grow
- Investments can go up and down.
- Fees can take a chunk of your investment.
A stocks and shares ISA lets you invest without paying any tax on your profits. They’re offered by most investment providers, usually at no added cost. This means that you can stop tax from eating at your profits and you don’t have to worry about declaring capital gains for tax purposes.
Frequently asked questions
ESG: Is the investing landscape changing for good?Finder published a paper in April 2021 on the trends and challenges in environmental, social and corporate governance (ESG) investing, as well as the factors that will help to shape the future of retail investing in the UK. Our paper includes original research, contributions and predictions from experts including Julia Dreblow, founding director of SRI Services and the Fund EcoMarket tool, Clare Reilly of PensionBee, Josh Gregory, founder of Sugi, and Plum's Thanos Bismpigiannis.
More guides on Finder
What is a group personal pension?
Find out how a group personal pension works and how you can use a workplace pension scheme to build your wealth.
Mental health stocks: Popular mental health companies to invest in
Mental health stocks can be rewarding, but there are risks involved that could impact your profits. Find out how to invest in companies in the mental health industry.
Lithium stocks: Popular lithium companies to invest in
Lithium mining stocks can be rewarding, but there are risks involved that could impact your profits. Find out how to invest in lithium mining companies.
Invest in pharmaceutical stocks
Pharma stocks can be rewarding, but there are risks involved that could impact your profits. Find out the best way to invest in pharma stock.
Invest in defensive stocks
Defensive stocks can be rewarding, but there are risks involved that could impact your profits. Find out how to invest in defensive companies.
Compare self invested personal pensions (SIPPs)
Saving enough money to guarantee yourself a comfortable retirement can be complicated. If you’re thinking of investing, a SIPP can be a viable option.
Invest in graphene stocks
Graphene stocks can be rewarding, but there are risks involved that could impact your profits.
Invest in blue chip stocks
Blue chip stocks can be rewarding, but there are risks involved that could impact your profits.
The guide discuses the pros and cons of junior SIPPs, and why kick-starting your child’s pension early can reap substantial rewards.
Pensions for self-employed individuals
If you’re self-employed, paying into a private pension is a great way to save for retirement, thanks to the tax benefits.