The start of a new tax year means that we can now add an additional amount of £20,000 into our individual savings account (ISA) and not have to pay any tax on the profits. Although the allowance remains the same this year, there is now a new advantage for investors. You can now invest in more than one ISA of the same type per tax year. This is a great benefit to those who want to use self-select Stocks and Shares ISAs to invest in a diverse range of assets.
Before this new change, investors had to choose their broker carefully based on the type of financial instrument they wanted to invest in. Some brokers only allowed investors to buy into ready-made funds that were only available through them. This might have been okay for beginners and long-term passive investors. However, for those who wanted to invest in an individual stock like Microsoft, for example, would be forced to open a share dealing account with a separate broker.
The new changes mean investors now have the best of both worlds. With this in mind, let’s discover the best self-select Stocks and Shares ISAs for buying individual shares.
Can I buy individual shares in an ISA?
Yes, you can buy individual shares within a Stocks and Shares ISA (also called a self-select ISA). This lets your investments grow tax-free. However, only certain ISA providers offer self-select options, so be sure to check before opening an account.
5 best self-select Stocks and Shares ISAs
Ready to pick the perfect self-select ISA for buying individual shares? First, let’s dive into the factors we considered when comparing the top self-select options:
They say elephants don’t gallop and some of my biggest gains have come from investing in small cap stocks. In fact, the majority of UK mid and large cap multibaggers over the last ten years started as small caps on the Alternative Investment Market (AIM). I have held positions in some of these stocks in the past and still own some today, examples would be Games Workshop, Jet2, and Yougov. Therefore, this was one of the main criterias for brokers that offer individual shares inside an ISA.
Other factors were, access to international stocks, platform fees and charges, educational material, technical analysis tools, and up-to-date news stories.
1. IG
IG’s Stocks and Shares ISA caters to active investors seeking a wider range of choices beyond just stocks. Their platform allows for buying and selling individual shares while offering access to other assets like options and CFDs, all within a tax-efficient ISA.
Fees and charges
Account Opening Fee: Free.
Trading Fee: £3 for UK share dealing with three or more trades in the previous month; otherwise, £8.
Platform Fee: No platform fee for share dealing accounts.
Investment options
Offers access to individual shares listed on UK and international stock exchanges, allowing investors to trade a wide range of companies across various sectors and regions. Provides access to other financial instruments such as Spread betting, contracts for difference (CFDs), forex, indices, commodities, and cryptocurrencies for investors looking to diversify beyond equities. Allows for trading across multiple asset classes within a single platform. Also offers direct market access.
Platform features and user experience
Provides a sophisticated trading platform with customisable layouts and advanced charting tools. Offers real-time market data, news updates, and economic calendar integration to keep investors informed of market developments. Provides access to educational resources, webinars, and trading insights to enhance investors’ knowledge and skills.
Customer service and support
IG offers customer support via phone, email, and live chat during business hours. Provides a dedicated help centre with FAQs, guides, and video tutorials to assist investors in navigating the platform and resolving common issues. Offers personalised support for account-related queries and trading assistance to ensure a smooth trading experience.
Who is IG ISA good for?
IG appeals to active investors seeking a wide range of assets (stocks, forex, etc.) and advanced tools. They also cater to frequent traders with competitive fees and beginners with a user-friendly platform and educational resources.
2. AJ Bell
AJ Bell’s Stocks and Shares ISA is a low-cost option for investors who want to buy and manage individual stocks within a tax-efficient ISA wrapper. It boasts competitive fees and a user-friendly platform for building a customized investment portfolio.
Fees and charges
Account Opening Fee: Free.
Trading Fee: £5.00 per trade for UK and International shares. Frequent traders £3.50
Platform Fee: 0.25% per annum on the value of the investments, capped at £3.50 per month for shares, ETFs, and investment trusts.
Investment options
Provides access to a comprehensive range of individual shares listed on UK and international stock exchanges, including AIM-listed shares. Offers investment trusts, ETFs, funds, and bonds to cater to investors with diverse investment preferences. Allows for regular investing to build a portfolio over time through automated contributions.
Platform features and user experience
Offers a user-friendly platform with an intuitive interface and easy navigation. Provides research tools, including fund research/screening investment news, and educational articles, to assist investors in making informed decisions. Offers portfolio analysis tools and performance tracking to monitor investment performance and asset allocation.
Customer service and support
AJ Bell Youinvest offers customer support via phone and email during business hours, with a dedicated team available to assist investors with queries and issues. Provides a comprehensive help center with FAQs, guides, and video tutorials to help investors navigate the platform and manage their investments effectively. Offers educational resources, investment insights, and market updates to support investors in their investment journey.
Who is AJ Bell ISA good for?
AJ Bell’s ISA targets price-savvy investors who want to build their own portfolio of individual stocks. Its low fees and user-friendly platform make it ideal for self-directed investors.
3. Hargreaves Lansdown
Hargreaves Lansdown’s ISA is a popular option for investors seeking a well-established platform with a range of investment choices. They offer a user-friendly interface for buying and selling stocks and funds within a tax-efficient ISA.
Fees and charges
Account Opening Fee: Free.
Trading Fee: from £5.95 per trade..
Platform Fee: 0.45% per annum on the value of the investments, capped at £45 per year.
Investment options
Offers access to an extensive selection of individual shares listed on UK and international stock exchanges, including AIM-listed shares. Provides investment trusts, ETFs, funds, and bonds to diversify your portfolio across different asset classes. Offers research tools and analysis to help investors identify investment opportunities and make informed decisions.
Platform features and user experience
Provides a feature-rich platform with customisable layouts and personalised watchlists. Offers research tools, including expert analysis, company research reports, and investment ideas, to support investors in their decision-making process. Offers a mobile app for trading and portfolio management, providing convenience and flexibility for investors on the move.
Customer service and support
Hargreaves Lansdown provides 24/7 customer support via phone, email, and live chat to assist investors at any time. Offers a dedicated help centre with FAQs, guides, and video tutorials covering various topics, from account management to investment strategies. Provides access to expert advice, investment research, and market insights to help investors make informed decisions.
Who is Hargreaves Lansdown ISA good for?
Hargreaves Lansdown’s ISA suits investors who value a trusted platform and a variety of investment options. It caters to both beginners with a user-friendly interface and experienced investors seeking a broad range of stocks and funds within their ISA.
4. Interactive Investor
Interactive Investor’s ISA offers a tiered fee structure for cost-conscious investors. Choose your plan based on trading activity, from casual to frequent, and buy individual shares and funds tax-efficiently within an ISA.
Fees and charges
Account opening/platform Fee: £4.99 per month for the essential Investor (invest up to £50,000) or £11.99 per month for Investor (for investments over £50,000).
Trading Fee: £3.99 per trade for UK and US shares.
Investment options
Provides access to a diverse range of individual shares listed on UK and international stock exchanges. Offers investment trusts, exchange-traded funds (ETFs), bonds, and funds to further diversify your portfolio. Allows investors to customise their investment strategy based on their preferences and risk tolerance.
Platform features and user experience
Provides a user-friendly platform with customizable dashboards and intuitive navigation. Offers comprehensive research tools, including stock screeners, performance charts, and analyst ratings, to assist investors in making informed decisions. Allows for portfolio tracking and performance analysis to monitor investment progress over time.
Customer service and support
Interactive Investor provides customer support via phone, email, and live chat during business hours. Offers a dedicated help centre with FAQs, guides, and troubleshooting resources to address common queries and issues. Offers investor events, webinars, and educational resources to support investors in their investment decisions.
Who is Interactive Investor ISA good for?
While not the most budget-friendly option, it appeals to value-conscious investors who prioritize a user-friendly platform and a tiered fee structure that adapts to your trading activity (casual or frequent) within a tax-efficient ISA.
5. Trading 212
Trading 212’s ISA is a commission-free option for buying and selling a wide range of stocks and ETFs within a tax-efficient ISA. Their user-friendly platform caters to both beginners and active traders.
Fees and charges
Account Opening Fee: Free.
Trading Fee: Commission-free trading for UK shares and ETFs.
Platform Fee: No platform fee or inactivity fees.
Investment options
Offers commission-free trading for UK shares and ETFs, providing investors with a cost-effective way to build a diversified portfolio. Provides access to a broad selection of individual shares listed on UK and international stock exchanges. Limited to shares and ETFs, which may suit investors focused solely on equities.
Platform features and user experience
Offers a sleek and modern platform with a user-friendly interface designed for ease of use. Provides real-time market data, customisable watchlists, and advanced charting tools to support technical analysis. Offers a mobile app for on-the-go trading and portfolio management, ensuring accessibility across devices.
Customer service and support
Trading 212 offers customer support via email and live chat, with a responsive team available to assist investors during trading hours. Provides a comprehensive help centre with articles, tutorials, and video guides to help investors navigate the platform and address common queries. Offers a community forum where investors can interact and share insights with each other.
Who is Trading 212 ISA good for?
Trading 212’s ISA shines for cost-conscious investors and beginners. It offers commission-free trading on a user-friendly platform, ideal for building a stock and ETF portfolio within a tax-efficient ISA.
Conclusion
As you consider the best self-select Stocks and Shares ISAs for individual shares, it’s important to prioritize your investment needs. All these platforms offer access to individual shares, however, think about what’s important to you. Is it trading fees, fractional shares or education material? Or do you rely heavily on technical analysis?
I personally like IG, for its simple features, quick execution and being able to switch between my ISA and spread betting account. It also provides Direct market access, which lets me deal directly into the order book.
If you are new to trading, start by investing small amounts and build your stakes as you become more experienced. Most traders lose money because they invest too much too soon. You can also try a demo account, however this doesn’t have the same psychological effect as using real money. Remember, take it slow, do your own research and good luck!
This guest post was provided by James Smith who has over 10 years experience trading the financial markets. If you would like to know another way of trading tax free outside of an ISA, check out his ultimate guide to spread betting.
For more insights and strategies, follow his trading diary at theleantrader.com.
