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Stocks and Shares NISAs

A Stocks & Shares NISA lets you invest money in shares without paying tax on any gains or dividends

You can invest your full NISA allowance of £15,000 into a Stocks & Shares ISA every year 

Stocks & Shares NISAs work best when you can keep money invested for at least 5 years as investment values can go up and down a lot

 

Need to know

  • Before you put money into a Stocks & Shares NISA, you need to make sure you understand the basics of investing and that it is right for you
  • If you have debts that you pay interest on, or you only have a small amount of savings, then maybe investing is not for you. You risk losing money if you have to cash in your investment quickly to cover a crisis
  • ONLY INVEST WHAT YOU CAN AFFORD TO LOSE. Investments can and do go down in value
  • If you can invest for a long time (5 years minimum) then you stand a good chance of your money growing more than it would in a bank. The longer you invest, the greater your chance of growth
  • When choosing your investment, firstly think about what is right for you, then which provider you want to use, and finally choose the actual investment
  • What is right for you is affected by many things – your age, your income, your savings & other assets, what funds you need now and in the future, and how much of a gambler you are. Only you can determine all these but an independent financial advisor may help you get the answers
  • Now for a NISA provider. If you are confident in picking your own investments, then take out a self select NISA through a fund supermarket (also known as discount brokers). Some NISA providers offer 'Ready-made' NISAs where funds are preselected for you.
  • If you're not confident about what you are doing, then seek advice from an independent financial advisor. Most NISA providers will also provide advice for a fee
  • If you had invested £15K years ago it would now be worth £35,218 based on the FTSE All Share Index. BUT past performance is not a guide to future performance
  • The new format of the NISA means you can choose to invest any combination of your £15,000 into cash and investments so you can balance your own portfolio
 

Choosing your investments

  • The investments you pick for your own NISA can be shares, funds, gilts, bonds, other investment types, or a combination. The most popular type of investment is a fund. There are thousands to choose from. Once you’ve signed up, your NISA provider will give you access to information on what you can invest in, but remember they won’t advise you
  • Funds are either managed, where a fund manager makes the decisions on what to invest in, or are tracker funds which hold a little bit of all the shares in a certain grouping, such as the FTSE100, or the FTSE All share index. The fund description will say if it's a tracker
  • Providers will typically give you information about what a fund invests in, what the charges are, and what the past performance has been. And you’ve heard this before - past performance is not a guide to future performance. The value of the investment can go down as well as up and you may get back less than you invested
  • Look carefully at the fund charges, as these are taken out of your investment and reduce the benefit to you. They are charged as a percentage of your investment
    • The initial fee - this is often 5%, but some fund supermarkets have negotiated reductions on these

    • The fund manager annual charge – normally around 1.5% on non-tracker funds (sometimes called the annual management charge or AMC)
    • The fund manager other expenses – normally around 0.2%
    • Some funds give the total expense ratio or TER - this is the annual charge and other expenses combined into one figure to you
  • Expect to come across A LOT of jargon. Your NISA provider will answer any questions - they are there to help - but don't expect them to recommend investments
 

Stocks and Shares NISA providers

A selection of current Stocks and Shares NISA providers available now. Others are available.

Find an independent adviser

 

The inside track

  • Like Cash NISAs you can choose to invest monthly or in a lump sum

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