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Stocks & Shares ISAs

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Amy and Eesha | Edited by Johanna

Updated August 2018

Stock chart with a magnifying glass

This is a guide to getting the cheapest stocks & shares ISA. Every adult has a £20,000 allowance for 2018/19 - find out how to take full advantage.

This guide will help you decide whether you should use a stocks & shares ISA, tell you the cheapest way to get one depending on how much help you need or want, and give tips for those new to investing.


Please suggest any changes or questions in the Investing in a stocks & shares ISA discussion. Thanks to platform directory the lang cat for fact-checking the guide.

Stocks & shares ISAs: Need-to-knows

What is a stocks & shares ISA?

Everyone in the UK over 18 has an annual £20,000 ISA allowance (for 2018/19). You can choose to use all of this for a stocks & shares ISA if you want, or you can split it between stocks & shares and any of the other types of ISA: cash ISAs, Lifetime ISAs and innovative finance ISAs.

It may still be called an ISA, but a stocks & shares ISA is very different to a cash ISA, which is simply a savings account you never pay tax on. With a stocks & shares ISA you're investing.

If this is your first experience of investing, it'll be worth reading our beginners' guide to investing to get a broader idea of what's involved.

Quick question

What can I invest in?

What exactly are funds?

Do I pay tax on a stocks & shares ISA?

It's very important you understand what the tax breaks are and whether they really matter to you before you decide to use your ISA allowance for investing.

You don't pay capital gains tax (CGT) on gains made within an ISA - great if you exceed the £11,700 annual CGT allowance.

Dividends are tax-free under the new dividends allowance.

You don't pay any income tax on interest from corporate bonds in an ISA.

Quick question:

How might CGT affect me?

Five+ years

You should invest for at least five years

Whether you should invest all depends on your personal circumstances and the amount of risk you're willing to take. But as a rule of thumb, you should invest for at least five years. This allows enough time to ride out any bumps in the market that might see you make a loss on your money.

As such, if you're looking to use your money within the next couple of years, you should probably stick to cash savings such as a cash ISA. See the Top Savings and Top Cash ISA guide for more.

Itís very important to understand that thereís no such thing as the best stocks and shares investment. Over the long run, historically stocks and shares have outperformed money in savings accounts. But that's no guarantee they'll do so in the future. Remember, investments can go down as well as up.

Always remember the five golden rules of investing:

Cash or stocks & shares

Consider whether a cash ISA or stocks & shares ISA is best for you

Whether a cash ISA or stocks & shares ISA is best for you depends on whether you gain from the tax breaks above and if you're willing to risk your money investing. In a nutshell:

  • If you're a basic-rate taxpayer you'd need to do a comparison between the amount of tax you'd get charged on savings outside a cash ISA and the amount of tax on any investments held outside a stocks & shares ISA. If you're unsure you could always stick to the previous ISA situation where you could only split the money between cash and investments 50/50.
  • Big investors, especially those putting money in corporate bonds, should ALWAYS max their stocks & shares ISAs (leaving no allowance for a cash ISA).
  • Only investing? ALWAYS max your stocks & shares ISA as it's often cheaper to invest within a stocks & shares ISA.

Don't confuse choosing funds with where you can buy your ISA

You can buy stocks & shares ISAs from different providers, but for the cheapest offers you want to do it through a website, often called a platform.

Investing in a stocks & shares ISA is a two-stage process. First you need to pick which provider to buy your ISA from, then you need to decide what investments to put in it.

It's like buying bread in a supermarket. You first need to pick where you want to buy the bread from (decide which platform to use), then choose what bread you want to buy from there (your funds).

You'll be charged both for using the platform and buying the funds. To stretch the analogy somewhat, imagine each supermarket charges a different price for its shopping bags.

Some supermarket bags are cheaper than others, but the ones that have the most expensive bags may be the ones that sell the bread the cheapest. So it's a combination of the two factors that needs to be taken into consideration.

Note that while the platform fee is charged by the platform you choose, the company running the funds will be charging you for the funds.

platform is like a supermarket while a fund or product is like bread

You can transfer your stocks & shares ISA into cash ISAs

This may be useful for people coming up to retirement or anyone else who don't want to take a risk with their money.

If you're going to do this you'll need to contact your new cash ISA provider and tell it you want to transfer money from your stocks & shares ISA. Never just withdraw the money - because if you do, you'll lose all the tax-free benefits.

Once you've filled out any forms, the transfer may take a few weeks. If you're opening a cash ISA with a different provider to where your stocks & shares ISA was, then you'll likely pay a closing fee. If you're switching with the same provider, there won't be a fee.

Drip-feeding money in over time reduces risk

It's tempting to try to time the market, but it's almost impossible and even the most experienced investors get it wrong. By pulling out of the market as soon as a share dips or trying to second-guess when a share will reach its peak, you could lose out on sharp recoveries or see the price go down again.

Instead, you should invest on a regular basis - in investment lingo this is called 'drip-feeding' - to smooth out any ups and downs. This will give you an added benefit of something called 'pound cost averaging'.

This is how it works...

Use your allowance by 5 April 2019 or lose it

You must save or invest in your stocks & shares ISA by 5 April, the end of the tax year, for it to count for that year. Crucially, any unused allowance doesn't roll over - so if you don't use it, you lose it forever.

Any savings or investments which stay within the tax-free ISA wrapper will continue to earn interest and reap the tax benefits until you withdraw the money.

So it's possible to have substantial amounts invested within ISAs: well over £100,000 since ISAs began in 1999.

There are different charges involved with a stocks & shares ISA

Both the platform and the funds you invest in will cost you money. The main ones to look out for are:

  • Platform charge.

    It's as if you have to buy a carrier bag from the supermarket: some charge you 50p for it and others charge you 10p. This can either be a flat fee (best for high investors) or a percentage of the value of your funds (the larger your funds, the more it'll cost you).

  • Fund manager charge (also known as annual management charge).
    Then you'll also be charged for everything you put in that bag - the funds you invest in. This is the charge by the actual manager of the fund held within your stocks and stocks & shares ISA. This is always a percentage and can typically vary from 0.1% - 1% per fund, depending on which fund youíre investing in.
  • Selling/buying funds.
    This is the cost every time you buy or sell a fund on the platform. These can be anything from £0 to £25. So if you're an active trader, looking for a low trading charge should be a high priority.
  • Transfer out fee.
    The cost involved in moving your stocks & shares ISA from one platform (provider) to another. This is usually charged per fund, so the more funds you have within your stocks & shares ISA, the more itíll cost you. However, some platforms don't charge a fee for transferring out.

Your current stocks & shares ISA provider could be overcharging you

Once you've got your head around the various charges, it'll be easier to work out whether your current stocks & shares ISA provider is overcharging you.

A platform might have been cheap at first, but new charging structures mean it may no longer be. Be sure to check any exit fees with your current provider, but if you won't take too much of a hit by leaving, then in the long run it'll likely be cheaper to switch provider to one with lower fees.

Best buys

Below we have divided the best buys into do it yourself, do it with me and do it for me platforms - depending on the level of service, help assessing your attitude to risk, and fund/portfolio choice, you want.

Do-it-yourself platforms

This option really is best suited for those who know what they're doing. You need to be clear on why you're investing, what you want to achieve and, importantly, how long it will take to achieve it. There will be no help given in understanding your attitude to risk. You'll have to research your chosen investments, build your own portfolio and then keep track of it.

This doesn't mean you won't be given any help at all with these sorts of platforms - while you won't be directed to a choice of investments, there will still be information available to help you make a decision.

It may be the case that you already have a stocks & shares ISA you've been investing in and want to transfer to one of the platforms below to take advantage of the lower charges. If this is the case, make sure you take into consideration any exit fees from your existing platform before you transfer.

If you do want to switch to one of the platforms below you'll have to do an ISA transfer. Be aware however that the new platform may not offer all the same investment options your previous platform did. So if there is a particular fund you like investing in, you'll have to weigh up whether it's better to stay with your existing platform that still offers it, or move to a new platform to take advantage of lower charges.

Quick question

How did you do your analysis?

Cavendish Online

Cheapest for frequent traders

Cavendish Online

Cavendish Online doesn't charge you for buying and selling funds and has low percentage based platform fees, so if you have a smallish amount of money (roughly under £25k) to invest, or want to do a lot of fund trading, this would likely work out cheaper than iWeb below.

Cavendish offers a discounted route to one of the most popular fund platforms - Fidelity - which offers the same funds for a higher fee. So if you don't mind the no-frills approach Cavendish offers and want access to the funds Fidelity has, you'd be better off transferring to Cavendish to save on the platform fee.

Key stats

  • Annual platform charge: 0.25% for under £200k, 0.20% for above £200k
  • Min ISA deposit: £0
  • Transfer out fee: £0
  • Fund dealing: £0 (£10 for ETFs)
  • No. of funds: 3,000
  • Account closure fee: £0

Cheaper option for larger portfolios


No frills investment website iWeb, which is operated by Halifax Share Dealing, is one of the cheapest do-it-yourself platforms out there. There's a one-off account opening charge of £25, then it's £5 per trade after.

As there's no ongoing platform fee, if you have a large portfolio (roughly over £25k) or you'll be trading infrequently then iWeb is likely a better option than Cavendish above.

It's not the most flashy website and doesn't offer a mobile app, so if this is something you're interested in, you could look at Interactive Investor below.

Key stats

  • Platform charge: £25 (one-off)
  • Min ISA deposit: N/A
  • Transfer out fee: £25 per fund
  • Fund dealing: £5 per trade
  • No. of funds: 2,175
  • Account closure fee: £0
Interactive Investor

Not that cheap but more comprehensive offering

Interactive Investor

If you want a more well-known platform to choose from with a more comprehensive offering and easier to use website than the options above, then Interactive Investor might be a good option for you.

It has a fixed platform fee of £22.50 per quarter, which on the face of it seems expensive, but this is given to you in credit which you can use for trading and if you have a large pot of money to transfer, can work out a lot cheaper than a percentage-based charging model. You can accrue a maximum of £90 worth of credit at any one time.

Trades cost £10 each, though this is reduced to £6 for three months from account opening, and for any month when you've traded at least 10 times per month on average over the previous three months.

This sounds complicated, an example should help. You pay your £22.50 fee which gets added to your account as trading credit. If one month you did two trades, this would take £20 off your credit so you would have £2.50 left. Make one more trade next month and it would use the remaining £2.50 and charge you an extra £7.50.

It offers a mobile app and a wide range of funds to choose from, so if you want a diverse portfolio, and want to trade and check on your funds on the go, this is a good pick.

Key stats

  • Platform charge: £22.50 per quarter - added as credit for fund dealing
  • Min ISA deposit: £100
  • Transfer out fee: Free within 1yr of opening, then £10 per fund (min £30 and max £250)
  • Fund dealing: £10 or £6 for frequent trading
  • No. of funds: 3,850+
  • Account closure fee: £50

Do-it-with-me platforms

This is the middle of the road option. Here, the investment decisions are yours to make, but there is help available. So a big list of funds may be narrowed down for you, but it is essentially still your decision which one you pick.

There may also be portfolios with different risk levels to choose from, but you donít get told which one to go for like you would with the do-it-for me option below - instead it is up to you to make the decision. So if you don't know your attitude to risk, you may be better off looking at the do-it-for-me platforms which guide you through it.

A lot of the platforms in this section could also fall under the do-it-yourself category above, but they also offer you a helping hand if needed.

Quick question

How did you do your analysis?

Cavendish Online

Small choice of ready-made portfolios

Cavendish Online

Cavendish Online has low platform fees and also doesn't charge you for buying and selling funds. For the do-it-with-me option, Cavendish offers a range of 12 portfolios, with three risk grades (low, medium and high) and four underlying options (income, growth, ethical and tracker).

Cavendish offers a discounted route to one of the most popular fund platforms - Fidelity - which offers the same thing for a higher fee. So if you don't mind the no frills approach Cavendish offers and want access to the funds Fidelity has, you'd be better off transferring to Cavendish to save on the platform fee.

Key stats

  • Annual platform charge: 0.25% for under £200k, 0.20% for above £200k
  • Fund manager charge example: 0.15% (mid-risk tracker portfolio)
  • Fund dealing: £0 (£10 for ETFs)
  • Min ISA deposit: £0
  • Transfer out fee: £0
  • No. of funds: 3,000
  • Account closure fee: £0

Choose between a hand-picked list of funds

AJ Bell*

AJ Bell has the same platform fees as Cavendish above of up to 0.25%, however it does charge £1.50 for buying and selling funds.

You've got two options for the do-it-with-me offering. Either you pick from any of 77 'favourite funds' which have been chosen by AJ Bell as good options, or you can choose from five passive funds with different risk levels. If you choose the second option, the platform fee is waived until January 2019, and overall charges are capped at 0.5% per fund per year.

If you were to transfer out to another provider in the future, there's a £25 transfer-out fee per fund - so if you have a lot of funds to transfer, this could leave a big dent in your wallet.

Key stats

  • Annual platform charge: 0.25% for under £250k, 0.1% for £250k-£1m, 0.05% for £1m-£2m, nothing above £2m
  • Fund manager charge example: 0.5% (passive balanced fund)
  • Fund dealing: £1.50 (£9.95 a trade, reducing to £4.95 if there were 10 or more trades in the previous month for ETFs)
  • Min ISA deposit: £500, or £25/mth if regularly saving
  • Transfer out fee: £25 per fund
  • No. of funds: 4,700
  • Account closure fee: £0

Cheapest platform overall but you can only invest in Vanguard funds


Vanguard is a cheap way to invest in funds, charging the lowest percentage based platform fee around of 0.15%. However, you can only invest in its own range of funds.

It has 71 to choose from, including its popular 'LifeStrategy' funds which let you choose between five options based on the level of risk you want to take and whether you have short or long-term goals. However, if you want the diversity of some of the best buys above, then Vanguard isn't the right option for you.

Another good thing about Vanguard is it doesn't charge exit fees. So if you do decide to leave, you won't be landed with a big bill.

Key stats

  • Annual platform charge: 0.15% (max £375)
  • Fund manager charge example: 0.22% (LifeStrategy 60%)
  • Fund dealing: £0
  • Min ISA deposit: £100/mth or £500 lump sum
  • Transfer out fee: £0
  • No. of funds: 71
  • Account closure fee: £0

Do-it-for-me platforms

These platforms are best for those who want all the hard work done for them and don't want the responsibility of making any investment decisions.

Here, you will be asked some fact-finding questions with risk-profiling by the platform to help decide on an investment portfolio. It will be based on your attitude to risk, any investment goals and what you can afford to invest.

Perhaps confusingly, these platforms can sometimes work out the cheapest option, even though youíre being given the most amount of help. This is purely based on the fact that the underlying investments in your portfolio will likely be exchange traded funds (ETFs), which typically are low-cost in nature.

Quick question

How did you do your analysis?

No platform fee for a year


If you're a new Wealthify* customer and open an ISA account via our link you'll pay no platform fee for 12 months. After the first year the fees will revert to 0.7% for £1-£15k, 0.6% for £15k-£50k, 0.5% for £50k-£100k, and 0.4% for £100k+, making it more expensive than both Nutmeg and Evestor below.

However, if you want to move to another platform with cheaper fees after the fee free deal has ended, you will most likely need to sell your investments and reinvest on the new platform. So be aware, in this instance, if your investment has gone down, you could lose money.

In line with it being a do-it-for- me platform, you let it know what type of investor you want to be - from cautious to adventurous, or somewhere in between - and it builds a plan based on this for you.

Key stats

  • Annual platform charge: £1-£15k at 0.7%, £15k-£50k at 0.6%, £50k-£100k at 0.5%, £100k+ at 0.4%
  • Fund manager charges (average): 0.18%
  • Min ISA deposit: £1.
  • Transfer out fee: £0.

No platform fee for 9 months


If you're a new Nutmeg customer and you open an ISA account via our link* you'll pay no platform fees for the first nine months. After nine months the fees will revert to 0.45% up to £100k and 0.25% after that for it's fixed allocation portfolio - then making it more expensive than Evestor below.

However, if you want to move to another platform with cheaper fees after the fee free deal has ended, you will most likely need to sell your investments and reinvest on the new platform. So be aware, in this instance, if your investment has gone down, you could lose money.

In line with it being a do-it-for-me platform, you choose your goal, timeframe and an amount youíd like to invest. You select a risk level and you'll be shown the potential returns you might get based on that.

It does have a higher minimum investment than Evestor and Wealthify to get the waived fees - either £5,000 upfront or £500 then a £100 monthly contribution.

Nutmeg also offers a fully managed option - which means your investments are monitored and changed by its investment team - but this comes at a cost and if you're happy to just pick your portfolio and let it do its thing, choosing its fixed allocation portfolio is a good option.

Key stats

  • Annual platform charge: Fixed portfolio: Up to £100k at 0.45%, £100k+ at 0.25%. Fully managed portfolio: Up to £100k at 0.75%, £100k+ at 0.35%.
  • Fund manager charges (average): 0.21%
  • Effect of market spread (average): 0.09%
  • Min ISA deposit: £5,000 or £500 then a £100 monthly contribution for the waived fees
  • Transfer out fee: £0

Cheapest long-term platform


You may not have heard of evestor, but it has one of the lowest platform fees of the do it for me offerings. On top of this it also has one of the lowest investment charges at a max of 0.13% - this means if you're investing over a longer term, or if you've a large portfolio, it may work out cheaper than those above, even with our no fee offers.

You can spend longer doing a detailed questionnaire about your circumstances and financial goals which will give you advice on what to invest in or you can choose one of three risk levels and it will allocate your money to a portfolio which matches your risk appetite.

Online advice is available but you can also access a chartered financial adviser by phone or Skype for free.

Key stats

  • Annual platform charge: 0.35% (0.25% Evestor fee + 0.10% product fee)
  • Annual transaction costs: 0.04%
  • Annual fund manager charges: 0.13% max
  • Min ISA deposit: £1
  • Transfer out fee: £0

Get free research to help choose a fund

Free research

If you're new to investing and have decided to take the do it yourself or do it with me route, then as well as the information which may be available on the platforms website you have chosen, lots of the big providers have free detailed fund and stock market information on their websites you can also use.

If you've jumped straight here, don't just dive in - it's worth going back to the start of this guide where we explain exactly how stocks & shares ISAs work and what a fund is.

Here are our top picks to get up-to-date, in-depth and easy-to-read information on funds, so that you can swot up before deciding where to invest your cash.

Hargreaves Lansdown*

Although Hargreaves Lansdown is one of the pricier platforms, it doesn't mean it's a no-go for investing. It provides a good and reputable service and has a very helpful and easy-to-navigate website jam-packed full of information about funds which you can make the most of whether you decide to use it or not.

The research team at Hargreaves Lansdown regularly runs a "Fund in focus"* feature to highlight one of the funds in the Wealth 150+ (Hargreaves Lansdown's selection of the best funds). Each focus gives detailed information about the fund's history and how it's performing, as well as the lowdown on any charges you'd have to pay on the fund.

Interactive Investor

Interactive Investor has a wide range of information, including beginner's guides on a range of investments and a glossary of terms you might come across while you're researching investments.

Interactive Investor's research team have also produced tables showing the top and bottom 10 funds and the 10 most traded funds on its website in each monthly period.

If you sign up for a free account you'll also be able to access the more in-depth technical insight section. Here, once you're logged in, you'll be able to select specific funds and review performance and see any patterns which have emerged over time.


Bestinvest's research team looks at more than 85,000 funds and compiles research on a monthly basis. The website has a huge range of guides available to download for free, covering everything from how to spot the worst performing funds, to the top rated funds and general information on how stocks & shares ISAs and other products work.

You'll also find stock market news and a tool which allows you to search for particular fund managers by their performance and track record.

Charles Stanley Direct*

If you don't need as much hand-holding, Charles Stanley Direct's website has a good round-up of what's going on in the markets.

The market data section of the website breaks down lists of FTSE companies and allows you to check performance for any time period from one day to three years. You can also check which companies have risen and fallen, or view any changes by whole industry sector. All the information is updated every 15 minutes so you get a very accurate feel for what's going on in the market.

If you're not sure how to invest and what to invest in, seek independent financial advice. Read the Financial Advice guide for more information.

Cashback sites may pay you for signing up

5 April 2018 As an extra boon, members of specialist cashback websites can be paid when they sign up to some financial products. Do check that its exactly the same deal though, as terms can be different. And remember the cashback is never 100% guaranteed until itís in your account.

Full help to take advantage of this and pros & cons in our Top Cashback Sites guide.

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