The cheapest Stocks and Shares ISAs

Keen to invest in a low-cost ISA? Look no further. We’ve researched the best Stocks and Shares ISAs out there to find the cheapest. And here we go:

The cheapest Stocks and Shares ISAs (managed by experts)

The cheapest ISA platform (self-managed)

Types of Stocks and Shares ISAs

Above, we’ve recommended Stocks and Shares ISAs managed by experts, and Stocks and Shares ISAs managed by yourself. If you’re quite not sure what these mean, let’s run through them.

Expert-managed Stocks and Shares ISAs

These are Stocks and Shares ISAs that are well, simply managed by experts. All you need to do is add your money, and the experts will handle the investments, and aim to grow your money over time – and they’re typically very good at it, it's their job after all!

You’ll pick from a few simple options, normally categorised into risk levels – and these range from lower risk to higher risk.

With higher risk, your money is likely to grow much more over a long period of time, but there will be more ups-and-downs along the way. With lower risk, there’s less ups-and-downs, but your money is likely to grow less over time.

Each risk level is suited to each person, but typically, if you’re looking to invest over a long timeframe (5+ years), a higher risk level is typically better suited. And if you’re looking to withdraw the cash within the next few years, a lower risk level is seen as a better option.

These types of ISAs are often called robo-advisors. And you’ll use easy to use technology such as a website or app to get started and track your money over time, while the experts (the advisors) manage your investments. Here’s the best robo-advisors to learn more.

Self-managed Stocks and Shares ISAs

With a self-managed Stocks and Shares ISA, instead of the experts, you’ll be the one making your own investment decisions. So, you’ll be deciding which investments to buy, when to buy, and when to sell. (We’ll cover the different types of investment you can make below.)

It can get pretty complicated, and ideally you’ll need to know how to build a well diversified investment portfolio for long-term growth – that means a suitable wide range of investments aimed at growing your money over time (often regarded as the best investment strategy).

That’s why we typically recommend most people to use an expert-managed investment platform (website or app) for their ISA, such as Moneyfarm¹, who will simply handle everything for you, and for a low cost.

A sensible option could be to open a General Investment Account (GIA), which is a standard investment account with no tax-free benefits, but you can have as many as you like, and there’s no limits. With this, you could make your own investments alongside the experts looking after your ISA.

If you do want go down that route, and manage your own investments, either inside an ISA or not, Trading 212¹ is a great option – it’s almost completely fee-free, and has a great range of investment options. Plus you can get a free share worth up to £100. Use code NUTS.

Types of investments

The types of investments you can buy within your own self-managed Stocks and Shares ISA can range quite a bit, we’ll cover the main types below. And, these are the same types of investments the experts will buy within an expert-managed ISA too.

Stock and shares (equities)

Stocks and shares are where you own part of a company, you own a ‘share’ of the company. There’s often lots of shares for each company, and all of them combined equal the total valuation of the company (it’s market capitalisation).

The value of shares can change over time normally depending on the company’s performance, and the stock market in general.

Companies can also pay out their profits to shareholders and these are called dividends.

These shares are traded on stock exchanges (places to buy and sell investments), for instance the London Stock Exchange (LSE), in the UK, and the New York Stock Exchange (NYSE), in the USA.

Investment funds

Investment funds (such as mutual funds or exchange-traded funds (ETFs)), are a collection of lots of different investments, all pooled together into a single investment – which makes buying and selling a wide range of investments much easier. Investment funds are typically managed by experts, called fund managers.

There’s lots of different types of investment funds, for instance they could represent an industry, such as electric vehicles, or green energy. Or, they could represent a subsection of a stock exchange (called a stock index), such as the top 100 companies in the UK (called the FTSE 100). 

Bonds

A bond is where you essentially loan your cash to a large business (corporate bonds) or a government, in return for interest (similar to when you borrow money from a bank). Typically, these are regarded as lower risk than stocks and shares.

Property

Property is also sometimes included within investments, and this is often commercial property such as office buildings and shops. These provide a rental income.

What is a Stocks & Shares ISA?

Let’s go back to the start quickly, and run through what a Stocks and Shares ISA actually is.

A Stocks and Shares ISA, also called an investment ISA, is an account to help you boost your savings over the years, by being completely tax-free. So, your money grows over time without having to pay Capital Gains Tax, Income Tax or Dividend Tax (the main taxes on investments).

You can save up to £20,000 per tax year (April 6th to April 5th the following year), which is called your annual ISA allowance. This is your annual allowance for all of your ISAs – there’s also a Cash ISA for cash savings, and a Lifetime ISA, for saving for your first home.

If you’re keen to learn even more, check out our guide: what is a Stocks and Shares ISA?

Note: ISA stands for Instant Savings Account. A government scheme to help you save more, and save tax-free.

What’s the best Stocks and Shares ISA?

Overall, the best Stocks and Shares ISA is Moneyfarm¹. They’ve got an amazing track record of investing – in fact, they’re the best performing Stocks & Shares ISA from our own analysis, beating other popular investment apps, Nutmeg and Wealthify, plus the industry average (all the investment funds available). Here’s where to learn more about our review on the best performing Stocks and Shares ISA.

Alongside the great investment performance, they’ve got some of the lowest fees, and it’s super easy to use and get started – there’s even expert advisors on hand to help you (all for free). There’s a reason why Moneyfarm is rated 5 stars!

Here’s the best Stocks and Shares ISAs to learn more, and see the full range of options.

What’s the best Stocks and Shares ISA for beginners?

For the same reasons above, the best Stocks and Shares ISA for beginners is also Moneyfarm. It’s super easy to use and having the experts on hand to help you and answer any questions you might have is a great option.

However, you do have to start with at least £500. So, if you want to start with less than that, check out Wealthify¹ – they’re great too, and you can start with just £1.

How fees work with Stocks and Shares ISAs

Not quite sure how fees actually work with Stocks and Shares ISAs? No problem. Let’s run through how everything works.

Expert-managed Stocks and Shares ISA fees

With an expert-managed Stocks and Shares ISA, you'll have 3 different types of fees, and they’re all percentages of the amount you have invested.

First, you’ll pay an account management fee (sometimes called a platform fee), which goes to the investment platform itself. These can range from 0.25% to 1.5%+. The cheapest is InvestEngine¹ coming in at 0.25% per year. (Typically, with the best investment platforms, fees start at around 0.75%, and reduce as you save more.)

You’ll then pay fees on the investments themselves. This is a fee within the investment fund, and goes to the experts managing the fund (the fund manager). This can be anywhere from 0.1% to 2% depending on the investment fund, however expect to pay around 0.25% with most investment platforms.

And finally, a small fee when the experts buy and sell investments, which is called a trading fee, or a spread fee. And this is typically around 0.07%.

So, all in all, expect to pay around 1% in total with an expert-managed Stocks and Shares ISA.

Self-managed Stocks and Shares ISA fees

With self-managed investment platforms, the fees are a bit different. The more modern platforms have completely done away with account fees, they’re completely free to use and store your investments. They’ve also done away with fees to buy and sell investments too (e.g. shares).

In fact, with the best companies, the only fee you’ll pay is a currency conversion fee, and this is a fee to convert your local currency (Pounds) into the currency of the shares you want to buy. For instance, if you want to buy Microsoft shares in the US, you’ll need to convert your Pounds into US Dollars when you buy (it’s all handled automatically). This ranges from 0.15% with Trading 212¹ (free share worth up to £100, use code NUTS) all the way to 1.5%.

However, with more traditional stock brokers, you will pay an ISA account fee to hold your investments, and a fee to buy investments, called a share dealing fee. 

These can be reasonable, however, it’s not the cheapest way to invest overall. One of the cheapest traditional stock brokers is AJ Bell¹, with just a 0.25% account fee, and a share dealing fee starting at £1.50 (but can go up to £9.95 depending on what you’re buying). Here’s our AJ Bell review to learn more.

Which is the cheapest share dealing ISA?

Overall, the cheapest share dealing ISA is Trading 212¹ – it’s completely free except for a currency conversion fee, which is just 0.15%, and it has a great range of investment options to buy.

Other types of savings and investments accounts

A Stocks and Shares ISA is a great account for saving and investing, but it’s not your only option. Let’s run through your other options:

General Investment Account (GIA)

A General Investment Account is a no-frills investment account that doesn’t have any tax-free benefits. However, you can have as many as you like, across all the different investment platforms, and there’s no limit on how much you can invest (there’s a £20,000 ISA allowance with an investment ISA).

A great idea is to have your investment ISA with an expert-managed investment platform, and then if you want to make your own investments, do that within a GIA.

If you want to open a GIA check out the best UK share dealing accounts.

Personal pension

A personal pension is perfect for saving for retirement, in addition to the State Pension (the government pension) and a workplace pension if you have one (a pension your employer will set up for you if you’re employed).

When you save into a personal pension, you’ll get a massive 25% bonus on everything you pay in. How good is that? And, you could claim back even more if you’re a higher rate taxpayer (40%) or additional rate taxpayer (45%), which you can do on your Self Assessment tax return.

Plus, your money will grow inside your pension completely tax-free!

You can save as much as £60,000 per year into your pension, or up to your total income (e.g. salary), whichever is lower.

Your money will be locked away until at least age 55, and when you want to withdraw it, the first 25% will be tax-free, which you can take as a tax-free lump sum, and you might pay tax on the remaining 75% depending on your income at the time.

You can learn lots more about these, and find the best pensions with our guide to the best pension providers. Spoiler: PensionBee¹ is a great option. It’s super easy to use and low cost.

Is it safe to invest in a Stocks and Share ISA?

Yep. It’s perfectly safe to invest within a Stocks and Shares ISA. All ISA providers have to be authorised by the Financial Conduct Authority (FCA). They’re the people who make sure financial companies are looking after you and your money.

You can find out if an ISA provider is authorised by the FCA by checking the FCA register.

This also means that you are protected by up to £85,000 under the Financial Services Compensation Scheme (FSCS). This protects you should anything bad happen to your ISA provider, such as going out of business.

However, with investments, your money is actually held with large banks, and all in your name, and can only be returned to you.

This doesn’t mean you can’t lose money however. Your investments can go up and down in value. Although with a solid investment strategy your money should grow over the long term.

Let’s recap

That’s it for the cheapest Stocks and Shares ISA. We hope that made ISAs much easier to understand, and you’re keen to get saving! It can really improve your financial future.

We recommend using an expert-managed investment ISA – simply let the experts grow your investments over time, while you enjoy life. It couldn’t get better than that could it? Best of all, they’re really great value. In case you missed it, our recommendation is Moneyfarm¹, they’re super easy to use, have a great investment record and low fees. Plus, there’s experts on hand to help you.

If you want to make your own investments, the cheapest ISAs are Trading 212¹ (free share worth up to £100, use code NUTS) and InvestEngine¹. They’re both super low cost, and a great range of investments, although InvestEngine only offers ETFs (exchange-traded funds).

Good luck saving and investing! Your future self will really thank you.