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- Opening a Stocks and shares ISA provides tax-efficient investment opportunities
- Start with a lump sum of £250 or set up monthly contributions from £25 - but don’t forget the annual Stocks and shares ISA allowance of £20,000
- Define clear financial goals to stay focused on growing your savings
- When choosing investments for your ISA, consider your risk tolerance, involvement level, and investment timeline to select the right option
Opening an individual savings account (ISA) reveals a world of investment opportunities while avoiding the complications of tax – but for some people, it can be tricky to know where to start with picking your investments.
How much can I invest in an ISA?
The maximum amount you can put into your Stocks and shares ISA per tax year is £20,000 for adults.
How to start investing in your ISA
Fund your account
Once you’ve set up a Stocks and shares ISA with AJ Bell, you’ll need to fund your account with a lump sum of £250 or more, or you can set up a Direct Debit of as little as £25 per month.
Choose your investments
After you’ve paid the money in, you need to think about how to invest it. It can be helpful to have a clear investment goal in mind.
If you’re investing for the first time, our investing for beginners guide can help you get started.
What charges will I pay in an ISA?
One thing to be conscious of is fees. With a Stocks and shares ISA, you’ll pay what’s known as an account charge – a percentage of your portfolio value that’s paid on a monthly basis.
Dealing in funds and shares can have a wide range of charges, and it’s important to make sure you get what you pay for. If fees are high, and the returns of the fund aren’t very strong, those fees will eat into your gains. Equally, you may decide that it’s worth paying a higher fee if you think the fund manager will generate higher returns. However, there are many low-fee options available for investors.
Read more about the different types of investment fees.
No charges for regular investing
Our regular investing service lets you put as little as £25 into an investment of your choice every month without paying any dealing charges.
One-off investment: Starting from £1.50 dealing charge
Using our regular investing service: £0 dealing charge
Account and other charges, for example fund fees, still apply.
Why invest regularly?
Start investing from just £25 a month
Invest automatically at the same time every month
Focus on long-term goals instead of 'timing' the market
Cancel or change your regular investment any time
No charges for regular investing
Our regular investing service lets you put as little as £25 into an investment of your choice every month without paying any dealing charges.
One-off investment: Starting from £1.50 dealing charge
Using our regular investing service: £0 dealing charge
Account and other charges, for example fund fees, still apply.
Why invest regularly?
Start investing from just £25 a month
Invest automatically at the same time every month
Focus on long-term goals instead of 'timing' the market
Cancel or change your regular investment any time
What should I be investing in?
ISAs allow you to invest in a large range of investment options, including shares, funds, investment trusts and bonds. Deciding which of these is right for your needs can take a little shopping around and research.
Some important things to consider are:
- How involved you’d like to be with your investments
- How much risk you’d like to take
- How long you plan to stay invested
Higher risk investments may result in a higher return but also may be more prone to market ups and downs. Think about how comfortable you are watching the value of your investments go up and down, and how long you plan to keep your money in the market. If it’s a long period, you have more time to ride out any turbulence.
Read more about investment risk
Bonds
Bonds are usually a lower risk choice, but can earn money at a slower pace. Based on your investment goals, you can decide if a bond provides enough growth for your money.
Shares
Typically, picking individual stocks can be a bit more time consuming to select and monitor, and higher risk because you’re relying on the performance of one company, instead of a spread of different companies. This will also require monitoring how the company is performing and ultimately when you think your investment has run its course.
Funds
Funds have varying levels of risk but these invest in a group of companies, so you aren't putting all your eggs in one basket. It also means that someone else is deciding what companies to invest in for you, so you can focus your time elsewhere.
There are a wide range of fund options, from funds investing in certain industries or parts of the world, and even ones that play into specific themes like artificial intelligence or companies that pay generous dividends. Funds are often popular among first-time investors because they typically provide instant diversification. They will invest in a portfolio of different assets such as company shares or bonds.
Essentially, you are spreading your risk with a fund – if something goes wrong with one of the companies or bonds in its portfolio, you have all the other holdings to act as a cushion and hopefully minimise the damage.
If you’d like to keep up to date on what’s happening in the markets or learn more about investing, you can read our investment articles and browse our Learn hub.
Get your money working for you
More about ISAs
From tips to boost your ISA savings, to understanding which ISA account is best for you, read more about these tax-free accounts.
Open an ISA
Invest up to £20,000 tax free each year with our most popular ISA account. Get started by investing as little as £25 per month.
Transfer an account
Thinking of moving an ISA over to us? It’s easy. We'll just need a few details of your current provider, then we’ll do the rest.
Important information: These articles are for information purposes only and are not a personal recommendation or advice. Remember that the value of investments can change, and you could lose money as well as make it. ISA and tax rules apply and could change in the future.