Stocks & Shares ISAs Explained
A Stocks & Shares ISA lets you invest your money in the stock market and pay no tax on your profits. It’s one of the most powerful ways to grow your wealth over the long term, all within your annual ISA allowance.
If you're unsure how ISAs work in general, check out our beginner’s guide to ISAs first.
What Can You Invest In?
Through a Stocks & Shares ISA, you can invest in:
- Individual UK or global shares
- Investment funds and ETFs
- Corporate and government bonds
- Investment trusts
- Cash (some platforms allow temporary holdings)
What Are the Benefits?
- No Capital Gains Tax on any profits you make
- No Income Tax on dividends or interest
- Flexible investments – choose what suits your goals and risk level
How Much Can You Invest?
For the 2025/26 tax year, you can invest up to £20,000 across all your ISAs. If you invest the full amount into a Stocks & Shares ISA, you can’t pay into another Stocks & Shares ISA that year – but you can still use a Cash ISA or a Lifetime ISA as long as you stay within the overall £20,000 limit.
What Are the Risks?
Unlike Cash ISAs, your money isn’t protected from market movements. You might get back less than you put in, especially over the short term.
- Markets can go up and down
- Not protected by the FSCS if you choose poor or unregulated investments
- Fees vary between platforms – always compare!
Who Is a Stocks & Shares ISA Suitable For?
This ISA type is ideal if you:
- Want to invest for the medium to long term (5+ years)
- Are comfortable with some risk in exchange for potential growth
- Want to invest tax-efficiently without worrying about allowances
Still not sure if it’s right for you? Take our quick ISA quiz to find the best fit for your savings or investment goals.
How to Get Started
You’ll need to open an ISA account with an investment platform (like Vanguard, Hargreaves Lansdown, Trading 212, etc.). Then you can choose ready-made portfolios or build your own.
Explore Other ISA Options
Not sure a Stocks & Shares ISA is right for you? Learn about the alternatives:
- Cash ISA – Keep your savings safe with tax-free interest.
- Lifetime ISA – Save for your first home or retirement and get a 25% bonus.
- Innovative Finance ISA – Invest in peer-to-peer loans (higher risk).
- Junior ISA – Save for your child’s future tax-free.
Frequently Asked Questions
Can I lose money in a Stocks & Shares ISA?
Yes. The value of investments can go up and down. If markets fall, you could end up with less than you invested, especially in the short term.
Do I pay any tax when withdrawing money?
No. Withdrawals from a Stocks & Shares ISA are completely tax-free, regardless of how much your investments have grown.
Can I transfer my Stocks & Shares ISA to another provider?
Yes. You can transfer your ISA to another provider without losing its tax-free status. Always request the transfer through the new provider to keep the benefits intact.
Is a Stocks & Shares ISA covered by the FSCS?
Yes, but only in certain circumstances. The FSCS covers up to £85,000 per firm if your investment platform fails. It does not protect you from investment losses due to market performance.