ISAs | 3rd August 2018

Guide to a Stocks and Shares ISA

Whether you’re a newbie or seasoned pro, our Stocks and Shares ISA guide has the answers to important questions such as “what are the benefits of the ISA?” and “what do the different levels of risk mean?”. As the guide says, go big or go home; start investing and earning today to turn your dreams into reality.


What is it?

Unlike a Cash ISA, which is only a tax-free savings account, a Stocks and Shares ISA offers you the chance to invest money on the stock market and make tax-free savings, rather than just accumulating a small amount of interest on the money you already have. A Stocks and Shares ISA offers you the chance to invest money on the stock market and make tax-free savings. Investing this way could potentially offer high earnings as long as you’re comfortable with a little risk.


Investors can expect plenty of tax advantages if they invest smartly. The interest you make from gains within the Stocks and Shares ISA is free from Capital Gain Tax. Dividends earned within a Stocks and Shares ISA will be tax-free. Of course, higher rate taxpayers will need to inform HMRC if they get taxable dividend income.

Long-term investment

Due to the unpredictable nature of the stock market, it is a good idea to consider your Stocks and Shares ISA as a long-term investment.


If you’re risk-averse, you could consider making ongoing small-medium investments instead of larger lump sums on an irregular basis. This allows time for returns to develop and may help to avoid significant losses.

Remember, it takes time and patience to find out what types of investments work for you and what pays back. Even if you’re a pro, it could be useful for you to discuss ISAs with a financial advisor.

The stock market is always going to come with a risk. However, when there is the potential to make a more significant gain, it can be worth it. To invest smartly, we recommend that you opt for a Stocks and Shares ISA that is protected by the FSCS. The FSCS covers investments of up to £50,000 (per person, per institution). So, if the business or company you invest into goes bust, you won’t lose your money.

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