The Best Stocks and Shares ISA: UK 2024

Picking the best stocks and shares ISA is a complicated process. Get it wrong, and you could be significantly out of pocket. Get it right and you could have a great way to grow your wealth. In this guide, we look at the top options and things you should consider before making this decision.

We’ve already discussed the types of ISA available to UK investors, along with the changes in the tax rules for 2024.

A stocks and shares ISA allows you to invest whilst keeping your gains free from tax.

You’ll need to open an account with an investment broker. There are many brokers available, ranging from big names in finance through to smaller brokers you may not have heard of.

Choosing the best stocks and shares ISA will be personal to you. There are many variables to consider which can impact overall cost, in addition to features that the broker provides.

The best stocks and shares ISA will not be the same for everyone. When picking your broker, there are many factors to consider.

Any fees or charges you pay when investing will directly hurt the value of your investments. Different brokers offer different fee structures so it’s important to understand the totality of the charges you’ll be paying.

Platform Fees

Some providers will charge a fixed % of your total investment each year. Some will ‘cap’ this charge depending on the type of investments you make. These charges may vary depending on the amount you have invested with some brokers tapering this charge the more you invest.

Other providers may charge a fixed amount each month, which can often work out cheaper for larger portfolios.

Some providers will not charge a platform fee.

Trading Fees

Trading fees are the charges you incur for buying and selling shares. These vary wildly between providers from free to over £10. It’s worth noting that most of the providers with free trading will not perform your trade immediately, instead they’ll likely group this with trades for other customers. This is worth watching for if you are planning on trading vs long term investing.

Foreign Exchange Fees

When buying or selling stocks or shares in a foreign currency, you’ll need to pay an FX fee. This is the fee paid to the provider to convert your funds for the transaction – e.g. from GBP to USD. Often this can be quite expensive – it’s one of the ways that the provider makes their money.

Depending on what you buy, you may never incur this fee. If you buy ETFs listed on the London Stock Exchange, they’ll be listed in GBP and hence you won’t need to convert your money into another currency. As a result, this may be one you can skip.

Many providers will offer fractional shares. This means you do not have to buy a complete share to invest. This is hugely beneficial for both stocks and ETFs where you price for a share could be in excess of $1000!

Fractional shares mean you can invest straight away without waiting to save enough money for a whole share. Given how volatile the stock market can be, you could be chasing an investment whilst the price to buy a share will continue to grow out of reach. With a fractional share you are able to buy a fixed amount of any given investment. Want to split your portfolio so you buy £100 of Nvida and £100 of Barclays? You can do that and keep your portfolio balanced.

If you aren’t sure what you want to invest in, then interest on uninvested cash can be a nice perk. If you are receiving dividends from your existing investments or you want to slowly invest a lump sum over a few months then earning interest on this uninvested sum can be a nice incentive.

Equally, if you are paying close attention to your investments; perhaps saving regular amounts and investing in accumulating ETFs then you may never have any uninvested cash, so a good interest rate wouldn’t matter.

Some ISAs will also be flexible. This means should you need to withdraw your funds within the tax year, then you can can without impacting your yearly allowance.

For most ISAs, withdrawing and then redepositing would just count as an additional deposit.

If you pay in £10,000, withdraw £5,000 and redeposit it within the tax year then you will have used up £15,000 of your allowance. This can be pretty annoying if you have an unexpected need for your money.

Trading 212 appears to be the top flexible ISA provider right now – both their cash and stocks and shares ISAs are flexible.

Many investors will have specific requirements from the user interface. Some will offer a practice account for you to get a good view of the interface and features before you commit. You could always open a few accounts with nominal amounts to try them our before investing more.

Most providers offer much of the same functionality so it might not be a key concern for many. If you are investing for the long term and not trading then mostly you’ll just want an intuitive enough interface so you can invest and leave your wealth to grow.

Quality of customer service is usually proportional to the amount you pay. Some providers will offer phone support whilst others will be limited to instant chat or service tickets.

In all honesty, picking the best stocks and shares ISA shouldn’t come down to customer service. Most providers won’t be able to offer investing advice and hence you should only need to use their support services very very rarely, if at all.

In fact most people will likely only need customer support if there has been an issue transferring an ISA.

That said, some people will want the peace of mind that comes with customer support and likely the big brand reputation that comes with it and if that is worth it to you then go ahead.

To help easily compare providers, the following table provides insight into the key fees, features and limitations. We’ve included some of the most popular providers, all of whom are backed by the Financial Services Compensation Scheme which protects your uninvested cash up to £85,000. Note if you opt into Trading 212’s high interest rate you won’t have the FSCS backing.

Stocks & Shares ISA Provider Comparison

Best Stocks and Shares ISA Comparison

Note this table was accurate at the time of publication however you should read the terms and conditions from each provider before making your decision.

Picking the best stocks and shares ISA for you is a complicated process so it’s best to follow these tips to work our what is best for you:

• Decide what you want to invest in
  • Will you be picking ETFs or stocks and shares? Will you be investing in GBP or foreign currencies?
• Work out how regularly you will be trading
  • If you want to buy a single investment a month then you may benefit from regular saving fee reductions. If you are buying and selling a lot then the commission fees will add up.
• Run some cost calculations on your expected investing totals
  • Platform fees vary significantly and depend on the total you have invested and what you have invested in, with some providers capping fees for certain investment types which may save you money.
• Experiment with practice accounts
  • To ensure you get a feel for the interfaces experiment with practice accounts. This helps you get familiar with the interfaces before you commit real money.
• Start small
  • Invest a small sum to start with to ensure this is the right platform for you.

Whilst this decision may seem complicated and take your time, it’s well worth investing in the stock market in the long run.

Remember that a broker doesn’t have to be for life! The 2024 rules mean you can open multiple ISAs and transfer between them!

I actually didn’t pick a single broker for my stocks and shares ISA. The new 2024 tax rules allowed me to open multiple ISAs, as long as I don’t exceed the overall £20,000 ISA limit.

This would be the first year I’d be opening a stocks and shares ISA hence I wanted to both experiment a little to further understand the stock market and what I wanted from my investment platform, and also ensure I was investing on good value platforms.

Given Trading 212 and Invest Engine had no ongoing platform fees and offered commission free trading these were the ones on my initial shortlist.

I’d mainly be investing in a selection of Exchange Traded Funds (ETFs), with a small portion of my ISA allowance going on individual stocks. Mostly the stock would be to play around with and learn more about the stock market. The ETFs would be a much larger portion of my ISA and would be large global, regional or sector based funds offering significant diversity.

So why didn’t I pick a single broker for my best stocks and shares ISA? Well I wanted to try a manageable number of platforms to understand which features I preferred, and I was lured in by introduction offers.

Trading 212 were offering a 1% cashback deal during the course of the 24/25 tax year. For every £100 you invest into the ISA during the tax year you’d get £1 back in a general investment account (GIA) – just like the ISA but without the tax free wrapper.

Invest Engine were offering a deal for new customer where you’d get a fixed cashback amount, again into a GIA for any deposits of transfers in during April. In this case it was a tiered approach – £1000 would net you £20 in your GIA.

Both Trading 212 and Invest Engine also offered referral codes which you could find online to get free shares or bonuses in your ISA – not huge amounts for £10-20 simply for opening an account.

Having been using both platforms for a few months now, I’m really pleased with both of them. The interfaces are intuitive and easy to use and between the platforms I’ve been able to accomplish everything I set out to. I’d highly recommend these platforms for your stocks and shares ISA.