Accessibility links


What to expect if you’re investing in a stocks & shares ISA

Thinking about investing for the first time but not sure what returns you could get? Our guide will introduce you to the key points to consider.

Topic: Investing

“What do I get out of investing in the stock market?”

That’s likely the first question any new investor will ask – followed by “is my investment safe?” Investing can be an attractive option if you’ve got some disposable income, but often comes with many questions...

1. What’s the best way to invest
in the stock market?

Venturing into the stock market can seem like a big step if you’re the kind of person that prefers the safe haven of savings accounts. But if you feel like you’re ready to take the leap, a stocks & shares ISA can be a good way to start your journey.

Before you go any further, it’s important to first consider your options:

  • 1.

    The direct approach

    If you have the time, knowledge, and confidence, you could invest directly in individual companies by buying stocks and shares via a third-party broker.

    Keep in mind
    - this approach is best suited for stock market veterans.

  • 2.


    An Exchange Traded Fund (ETF) is a collection of assets that trade on the stock market as a single unit. For some people, this can be a more convenient way of investing in a wide range of companies.

  • 3.

    Online support

    If you’re looking for more expert support for your investments, you might want to consider an online service that creates and manages an investment portfolio for you based on your attitude to risk, your financial situation and your long-term goals.

Ask yourself

– do I have the time to research the market myself or do I need a helping hand?

2. What’s the average
stock market return?

You wouldn’t open a savings account without knowing the rate of interest being offered.

But with investing, the answer, unfortunately, isn’t as simple. You are likely to see more growth from investing – some sources quote 7% as the magic number

– but there are many variables at play:

  • 1.

    Time in the market

    The longer you are invested for, the greater chance you have of significantly growing your initial investment and riding out the ups and downs of the market.

  • 2.

    Your initial deposit

    The amount you invest in the first place – and continue to invest over time – will also impact the returns you achieve. Most investments will allow you to invest in one lump sum or make regular monthly contributions.

  • 3.

    Your risk tolerance

    Everyone has different levels of risk they’re prepared to accept in any activity and that includes investing. The more risk you’re prepared to accept, the higher the potential returns.

Tip: Don’t try to time the market

Remember: ‘time in the markets, not timing the market’.

There are no guarantees in the stock market, but a sound investment strategy that takes into account your financial goals and your risk tolerance can help you make more informed long-term plans.

3. How does a stocks and shares ISA work?

No one likes handing any of their hard-earned cash over to the tax man.

And that’s the beauty of a stocks & shares ISA. It’s essentially a wrapper that means any returns from your investments are tax-free. Your dividends will go to you and you alone, while any profit you might make when you sell your investments stays in your wallet.

With an ISA, each year you get a maximum tax-free investment allowance.
This year, that allowance is £20,000.

Use it or lose it

You have until midnight on the 5th April to use your allowance.

There are a few investment options within a stocks & shares ISA. These include investing in individual companies, buying bonds, or holding funds through a fund manager.

Tip: Invest earlier

The ISA deadline is 5 April 2019 but don’t wait till the last minute.

By investing early, you could achieve greater returns.

4. How many ISAs can I have?

Before looking at how many ISAs you can have, don’t forget that in any one year you can’t exceed your ISA allowance of £20,000. You can spread that allowance across the different types of ISAs (Cash, Stocks & Shares, Innovative Finance, and Lifetime) but you can only pay into one stocks and shares ISA in a given year.

At a glance

Unlimited ISAs, limited allowance. So, if you were to open a new stocks & shares ISA this year, you couldn’t also pay into an ISA you already hold.

However, if you did want to open a new ISA to access different funds or benefit from fee discounts, for example, you can transfer your existing portfolio to the new adviser.

Tip: Do your research before opening a new ISA

And be aware of any transfer fees payable to your existing provider.

5. What happens if I take my
money out of an ISA?

One of the great benefits of ISAs is flexibility. You’re free to take your money out of an ISA whenever you want. So, if you fancy that holiday of a lifetime, then you can withdraw the money you need.

It is worth remembering that investing is for the long term and we recommend that you invest for a minimum of three years or longer.

Think long-term

Think carefully before taking money out of your ISA. Is now the best time?

6. How do I open a Click & Invest
stocks and shares ISA?

    • Try out our investment calculator by entering a value and timeframe
    • Complete your risk questionnaire
    • Review your proposed investment portfolio
    • Decide how much you’d like to invest
No Comments
Read and post comments

    Post a reply

    Post a comment

    Contact Us

    0808 164 1234
    +44 203 866 1234

    Available 24 hours a day, 7 days a week