Best Performing Stocks and Shares ISA UK – Top ISAs in the UK

If you’re looking to invest in stocks and shares in a tax-efficient way, you might consider an ISA. In doing so, the first £20,000 that you invest will be shielded from capital gains and dividends tax. With that said, there are dozens of stocks and shares ISAs in the market, so you need to choose the right provider for your financial goals.

In this guide, we review the Best Performing Stocks and Shares ISAs UK in the market right now. 

#1 Stocks and Shares Broker – eToro

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Best Performing Stocks and Shares ISA UK – Top ISAs in the UK

Below you will find a quick overview of the best-performing stocks and shares ISAs in the UK right now.

  1. eToro – Buy Stocks and Shares With 0% Commission and 0% Stamp Duty
  2. Halifax – Best Performing Stocks and Shares ISA UK for Newbies
  3. Hargreaves Lansdown – Best Performing Stocks and Shares ISA UK for DIY Investments
  4. Vanguard – Best Performing Stocks and Shares ISA UK for Index Funds
  5. Barclays – Best Performing Stocks and Shares ISA UK for Diversification

You will find a review of each broker further down in this guide.

Best Performing Stocks and Shares ISA UK – Full Reviews

To save you from having to perform countless hours of research, our team has identified the best-performing stocks and shares ISAs UK in the market today. We considered core metrics surrounding fees, supported shares, user-friendliness, minimum account balances, and payment methods.

Below you will find our full reviews of each provider.

1. eToro – Buy Stocks and Shares With 0% Commission and 0% Stamp Duty

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We should start by saying that eToro doesn’t offer stocks and shares ISAs. But, the reason it tops our list of providers is that eToro offers the lowest stock investment fees in the UK. In fact, when you compare eToro’s fee structure to a tax-efficient ISA, you will quickly find that the former is much more cost-effective in the long run. First and foremost, when you buy stocks on the eToro website, you will not pay a single penny in share dealing fees. 

This is in stark contrast to traditional stocks and shares ISA accounts, which will always attract a commission. This commission is typically payable every time you buy and sell a stock. Furthermore, eToro does waivers the 0.5% stamp duty tax that you would ordinarily need to pay when you invest in shares that are listed on the London Stock exchange. When you invest via stocks and shares ISA, the respective broker will also charge you an annual maintenance fee.

etoro app review

At eToro, no such fee exists. As such, you can keep your stocks and shares investments in your eToro portfolio for as long as you wish – without incurring any ongoing charges. As we explain later in this guide with real-world examples, by purchasing stocks from eToro as opposed to an ISA-compatible broker, your long-term fees will be reduced by some distance. In terms of supported markets, eToro gives you access to 17 UK and international exchanges.

This covers markets in Germany, the US, France, Hong Kong, Greece, Saudi Arabia, and more. These international marketplaces also come with the eToro 0% commission rate. What we also like about eToro – which is seldom seen with traditional stocks and shares ISAs, is that you can invest in fractional equities. Put simply, this means that you can buy a fraction of one share – with the minimum investment start at just $50 (about £35).

etoro app review

This is super-useful if you are planning to invest in US-listed stocks like Amazon or Google – which trade for thousands of dollars per share. In addition to stocks, the eToro website offers hundreds of other financial instruments. This is inclusive of ETFs, index funds, investment trusts, REITs, commodities, forex, and even cryptocurrencies like Bitcoin. You can also invest passively at eToro, as the broker supports Copy Trading. This allows you to select a seasoned investor and then copy all of their future trades like-for-like.

If you like the sound of this low-cost broker, you will be pleased to know that eToro is regulated by the Financial Conduct Authority (FCA). The platform is also regulated in other jurisdictions – including the US and Australia. Your capital is also protected by the Financial Services Compensation Scheme (FSCS) up to the first £85,000. Getting started at eToro should take you no more than five minutes – as verification is automated. You can fund your account with a UK debit/credit card or bank transfer – as well as Paypal and Skrill.

Pros

  • Invest in stocks at 0% commission
  • Pay no stamp duty on UK-listed stocks
  • Supports debit/credit cards, e-wallets, and local bank transfers
  • Registered with FINRA/SEC and regulated by the FCA, CySEC, and ASIC
  • Used by over 20 million people
  • Perfect for beginners
  • Social and copy trading tools

Cons

  • Perhaps too basic for technical traders
  • No support for MT4 or MT5

67% of retail investor accounts lose money when trading CFDs with this provider.

2. Halifax – Best Performing Stocks and Shares ISA UK for Newbies

If you are a complete newbie that is looking to invest in equities for the very first time, Halifax perhaps offers the best-performing stocks and shares ISA for this purpose. You will find the Halifax website simple and burden-free, so buying and selling shares via your ISA should not require any prior experience. Like all stocks and shares ISAs, you will, however, be responsible for making your own investments.

Nevertheless, the Halifax stocks and shares ISA gives you access to a good range of UK and international markets. This includes individual stocks, as well as ETFs and investment funds. The key drawback with these stocks and shares ISA is that Halifax charges handsomely in the fees department.

For example, you will be charged a flat-dealing fee of £9.50 every time you buy and sell a stock. Although this might not sound like a lot at first glance, this will amount to a high percentage commission if you are investing small amounts. That is to say, buying just £95 worth of stocks would amount to a dealing commission of 10%. Additionally, you will also be charged an annual maintenance fee of £36.

Pros

  • Offers UK and international stocks
  • ETFs and investment funds also covered
  • No surcharge on international stock purchases
  • Very user-friendly

Cons

  • Charges a flat share dealing fee of £9.50
  • Annual maintenance fee of £36
  • Does not support fractional shares

at eToro, UKs’ #1 Broker

67% of retail investor accounts lose money when trading CFDs with this provider.

3. Hargreaves Lansdown – Best Performing Stocks and Shares ISA UK for DIY Investments

If you have a bit of experience in the stocks and shares arena and wish to make investments on a DIY basis – Hargreaves Lansdown offers one of the best performing ISAs for this purpose. This is because Hargreaves Lansdown offers thousand of UK-listed shares across both the London Stock Exchange and Alternative Investment Market (AIM).

For those unaware, the AIM is the UK’s secondary exchange that lists smaller companies – so Hargeaves Lansdown is great should you wish to gain exposure to up-and-coming stocks. Additionally, Hargreaves Lansdown also offers a huge range of investment funds and trusts, so you won’t be short of options with these stocks and shares ISA. When opening a DIY account at Hargreaves Lansdown, you can get started with a minimum investment of just £100.

You can also elect to deposit from just £25 per month via direct debit. Either way, this stocks and shares ISA provider will charge you an annual fee of 0.45% – which is in addition to the standard Hargreaves Lansdown commission structure. This is where things can really get expensive, as Hardgreaves Lansdown charges a standard share dealing fee of £11.95. This is payable when you buy shares, as well as when you cash out.

Pros

  • Huge selection of stocks and funds
  • Great reputation in the UK brokerage scene
  • Get started with just £100
  • Also supports direct debits from £25 per month

Cons

  • Annual stocks and shares ISA fee of 0.45%
  • Charges £11.95 per trade

at eToro, UKs’ #1 Broker

67% of retail investor accounts lose money when trading CFDs with this provider.

4. Vanguard – Best Performing Stocks and Shares ISA UK for Index Funds

If you are looking to invest in a stocks and shares ISA – but have little to no experience in how to select individual companies, it might be worth considering Vanguard. For those unaware, Vanguard is one of the UK’s leading index fund providers. Whether you are looking to invest in stocks, bonds, or a combination of the two – Vanguard offers heaps of portfolios.

This allows you to invest in the financial markets in a passive nature, as your investments are managed by the Vanguard team. This top-rated provider has recently entered the UK stocks and shares ISA scene, so you can invest in your chosen index fund in a tax-efficient way. You will, however, be required to meet some investment fees.

For example, Vanguard charges an annual maintenance fee of 0.15%. This is, however, much lower than many other stocks and shares ISA providers in this space. You will also need to ensure that you are able to meet the minimum investment amount stipulated by Vanguard – which starts at £500. If opting for a direct debit, this minimum is reduced to £100 per month.

Pros

  • Leading index fund provider
  • Invest in the financial markets without needing any prior knowledge
  • More than 75 funds to choose from
  • An annual fee of 0.15% is reasonable

Cons

  • Minimum lump sum investment of £500
  • Direct debits require a minimum of £100 per month
  • Not suitable if you want to invest in individual companies

at eToro, UKs’ #1 Broker

67% of retail investor accounts lose money when trading CFDs with this provider.

5. Barclays – Best Performing Stocks and Shares ISA UK for Diversification

If you’re looking for the best-performing stocks and shares ISA UK in terms of diversification, Barclays is well worth checking out. The UK high street bank gives you access to more than 35 stock exchanges from around the world, so you have the chance to add both UK and international shares to your portfolio.

Plus, the Barclays stocks and shares ISA also gives you access to ETFs and index funds. When it comes to fees, this will vary depending on the investments you make. For example, there is a flatshare dealing fee of £6 per trade when you buy and sell stocks. This fee is reduced to £3 when you invest in funds.

You will also be charged an ongoing maintenance fee when investing via the Barclays stocks and shares ISA. This will be the higher of 0.1% and 0.2% per year for stocks and funds respectively or £4 per month. Your annual fee will, however, be capped at £125 per month. Barclays will also cover the transfer fees from your existing ISA – up to a maximum of £500.

Pros

  • Gain access to over 35 stock exchanges from around the world
  • Transfer fees from existing ISA covered (up to £500)
  • Great selection of funds and stocks

Cons

  • Confusing pricing structure
  • Monthly fees are expensive if investing small amounts
  • £25 fee to invest via the telephone

at eToro, UKs’ #1 Broker

67% of retail investor accounts lose money when trading CFDs with this provider.

What are Stocks and Shares ISAs UK?

In a nutshell, stocks and shares ISAs allow you to invest in the financial markets in a tax-efficient way. The main concept here is that you will not be required to pay capital gains or dividends tax up to the first £20,000 invested per year. This means that by maximizing your annual allowance – which is reviewed each year by the government, you can invest in stocks, funds, bonds, and plenty of other asset classes and shield some, or all, of your tax liabilities.

It is crucial to note that stocks and shares ISAs in the UK are not stand-along financial products. By this, we mean that you will need to go through a UK broker that offers ISAs. This means that the most important decision that needs to be made is your choice of online broker. After all, it is your chosen broker that will determine:

  • What assets do you have access to – e.g. UK and international stocks, index funds, ETFs, bonds
  • How much you will be charged in dealing fees
  • How much you will need to pay in annual maintenance fees
  • How easy the platform is to use

Furthermore, and perhaps most pertinently, most stocks and shares ISAs in the UK require you to invest on a DIY basis. Put simply, this means that you will be required to choose which investments to add to your stocks and shares ISA and when to enter and exit the respective market. This does, of course, mean that you need to be comfortable making your own investment decisions.

Are Stocks and Shares ISAs Worth it?

Most people in the UK will invest through a stocks and shares ISA because they think that this is the most tax-efficient way of accessing the financial markets. While to a certain degree this is true – this only covers half the story. After all, not only do you need to consider your potential tax liabilities – but a range of other fees that you are likely to come across when making investments.

  • For instance, as you will need to go through an online broker to invest via a stocks and shares ISA, you need to remember that dealing fees will come into play.
  • This is a fee that is charged every time you make an investment – and again when you eventually cash out.
  • Then, you also need to factor in the annual maintenance fee that all stocks and shares ISA providers charge.
  • You also need to factor in stamp duty (0.5%) – which is charged on all investments that are listed on the London Stock Exchange.

And most importantly, UK residents get annual capital gains and dividend tax allowance anyway – irrespective of whether or not you go through a stocks and shares ISA. In the 2021/22 tax year, this stands at £12,300 for capital gains and £2,000 for dividends.

Bringing these core factors into the equation, our research team found that stocks and shares ISAs in the UK are not really worth it – especially when you go through an online broker that offers super-low fees on standard investment accounts.

To illustrate this point with a real-world example – the sections below will show you how much cheaper it is to go through a standard eToro account – as opposed to a stocks and shares ISA.

Stocks and Shares ISA vs eToro Standard Account

Hargreaves Lansdown is perhaps the most used UK-based broker offering stocks and shares ISAs – so we will use this provider for our eToro comparison.

Dealing Fees

Make no mistake about – irrespective of which stocks and shares ISA you use in the UK – dealing fees will always come into play. For example, when you buy shares at Hargreaves Lansdown via your ISA – you will be charged a whopping £11.95. This means that by investing just £100 into your chosen stock, you will pay a variable fee of 11.95% (£11.95 of £100).

This £11.95 commission at Hargreaves Lansdown is also charged when you eventually cash out your investment. In comparison, low-cost brokers like eToro allow you to buy and sell shares on a 0% commission basis. In the same example as above, your £100 stock investment would therefore cost you nothing in commission, subsequently saving you £11.95.

Annual Fees

Just like dealing fees, all of the stocks and shares ISAs that we came across will also attract an annual charge. This is typically expressed as a percentage fee, which is multiplied by the amount of money you have invested on the platform.

  • For example, at Hargreaves Lansdown, the brokerage firm charges an annual fee of 0.45% on its stocks and shares ISAs.
  • This means that by maximizing your annual ISA allowance of £20,000, you would pay Hargreaves Lansdown £90 per year.

In comparison, by using eToro to invest in stocks and shares, you will pay nothing in annual maintenance fees.

Stamp Duty

Did you know that when you buy shares listed on the London Stock Exchange, you are required to pay a stamp duty of 0.5%? This is calculated against the size of your purchase.

  • For instance, if you invested the full annual ISA allowance of £20,000 into UK-listed stocks, you would end paying £100 in stamp duty tax.
  • This is in addition to the aforementioned dealing fees and annual maintenance charges.

Once again, this fee does not come into play when you buy shares at eToro. This is because eToro waivers stamp duty tax – so you are saving yourself a further 0.5% in fees.

International Shares

Many are unaware that stocks and shares ISAs are also eligible for international investments. This means that you can add stocks like Amazon, Apple, Google, Facebook, and Tesla to your ISA – and still benefit from tax-efficiency.

  • However, virtually every UK broker offering stocks and shares ISAs will charge you a premium to access the international markets.
  • At Hargreaves Lansdown, for example, you will pay a surcharge of 1% per trade.

At eToro, the broker’s 0% commission offering also includes 16 intentional stock exchanges – so once again, you will save even more in fees when choosing this platform.

Annual Tax-Free Allowance

This section is arguably the most important when considering whether or not stocks and shares ISAs are really worth it. This is because all UK residents have access to an annual tax-free allowance that covers both capital gains and dividends. More specifically, this allowance remains in play even when you don’t invest through a stocks and shares ISA.

As per 2021/22 limits, you will get the following tax-free allowances when investing in the financial markets:

  • £12,300 capital gains tax allowance
  • £2,000 dividend tax allowance

Now, on the one hand, the above figures amount to a smaller tax-free allowance than you would get with a stocks and shares ISA. But, you would need to invest a considerable sum of money to utilize your full allowance. After all, the £12,300 capital gains allowance is based on the amount of profit that your investments yield, and not the total amount invested.

This means that in order to make more than £12,300 in capital gains in a single year, you would likely need to have at least £100,000 invested in a medium-to-high risk asset. For example, if you made 10% gains in the 2021/22 tax year, to bypass capital gains of £12,300, you would need to have a total investment of over £123,000.

Ultimately, unless you are looking to invest a six-figure sum, there is no argument that a low-cost broker like eToro offers a better service for your wallet in comparison to a traditional stocks and shares ISA.

How to Find the Best Performing Stocks and Shares ISA UK

If you have your heart set on investing through a stocks and shares ISA, you should know that you have dozens of options at your disposal. Therefore, in order to choose the best performing stocks and shares ISA UK for your financial goals, you need to do a little bit of research.

To help point you in the right direction, below we discuss the most important metrics to consider in your search for a top-rated provider.

Regulation

The most important thing to consider when searching for the best-performing stocks and shares ISAs in the UK is the safety of your investments. The easiest way to determine this is to check that the broker is:

  • Regulated by the FCA
  • Covered by the FSCS

The FCA regulates the UK financial services industry, this will ensure that broker offers a safe and secure investment environment. Plus, if the unthinkable happened and your chose broker went out of business, the FSCS would cover your investment funds up to the first £85,000.

Markets

Stocks and shares ISAs in the UK support a wide variety of investments above and beyond just UK-listed stocks. In fact, in addition to international stocks, this covers everything from bonds and index funds to ETFs and trusts. However, the types of investments that you have available to you will be determined by your chosen stocks and shares ISA provider.

For example, many of the providers that we came across only support shares listed on the London Stock Exchange and AIM. This means that diversifying into international markets will not be possible. At eToro, however, you will have access to 17 UK and intentional stock exchanges, alongside commodities, index funds, ETFs, forex, cryptocurrencies, and more.

Fees

We don’t need to go into too much detail in this section, as we covered the main stocks and shares ISA fees that need to be considered earlier in this guide.

Nevertheless, to recap, these are the fees that you need to look out for before opening an account with an ISA provider:

  • Annual ISA Fee: This is the annual fee that you need to pay to keep your stocks and shares ISA open. This is usually a percentage amount that is calculated against the total amount you have invested on the platform.
  • Dealing: This fee is charged every time you buy and sell an investment. This is often a flat fee in the UK brokerage scene, but can also be expressed as a percentage.
  • Funding: Many brokers in the UK offering stocks and shares ISAs will charge you a commission on deposits and withdrawals. This is can also vary depending on the respective payment method.

Fees and commissions charged by the best-performing stocks and shares ISAs can also depend on the size of your investments. For example, at Hargreaves Lansdown, your international share dealing fee is reduced from 1% down to 0.75% when you invest at least £5,000. As such, it’s worth spending a bit of time assessing the fee structure of your chosen provider before proceeding with an account.

Minimum Investment

Another factor to consider in your search for the best-performing stocks and shares ISAs in the UK is the minimum investment requirement. Once again, this is something that will be determined by your chosen provider.

For example, Vanguard requires a minimum lump sum investment of £500 to gain access to its ISAs. Alternatively, you can sign up for a monthly direct debit of £100 per month. At Hargreaves Lansdown, the minimum requirement is lower at £100 or £25 per month.

Payment Methods

It’s also a good idea to see which payment methods your chosen stocks and shares ISA supported. We would argue that the best providers in this space will support debit and credit card payments, not least because your deposit will be credited to your account instantly.

With that said, we found that most stocks and shares ISAs only allow you to add funds via a UK bank transfer. Although this is also a safe way to deposit funds, your payment might not arrive for a few working days.

How to Invest in Stocks and Shares Today – Full Walkthrough

To conclude this guide, we are now going to show you how to invest in stocks and shares with eToro. Although this FCA-regulated broker does not offer ISAs, it does allow you to invest in shares at 0% commission and without paying any stamp duty. This makes eToro a much more financially option than using a traditional stocks and shares ISA.

Step 1: Open an Investment Account

Opening an account at eToro takes minutes. Simply visit the provider’s homepage, click on the ‘Join Now’ button, and enter your personal information and contact details when prompted.

how to join etoro

You will also be asked to upload a copy of your passport or driver’s license for verification purposes – which will be validated in under a minute. However, if you are not planning on investing more than $2,250 (about £1,600) right now – you can add the required document at a later date.

67% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Deposit Funds

eToro requires a minimum first-time deposit of $200 – which is about £145. After that, all future deposits come with a smaller minimum of $50. 

You can choose from the following supported deposit types:

  • Debit Card
  • Credit Card
  • Paypal
  • Skrill
  • Neteller
  • UK Bank Transfer

By choosing a payment method other than a UK bank transfer, your deposit will be processed instantly.

Step 3: Choose Investment

eToro offers everything from stocks and shares to index funds and cryptocurrencies. You can hit the ‘Trade Markets’ button to see which financial investments take your fancy. 

In our example, we are using the search box to invest in Royal Mail stocks.

Step 4: Complete 0% Commission Investment

Now all you need to do is tell eToro how much money you wish to invest in your chosen asset. eToro operates in US dollars, so your stake needs to be stated in USD. 

In our example, we are looking to invest $50 into Royal Mail stocks. To complete your investment, simply hit the ‘Open Trade’ button.

Best Performing Stocks and Shares ISA UK – Conclusion

When searching for the best-performing stocks and shares ISA in the UK – you are actually comparing brokers. That is to say, the types of assets available and the fees you pay to access ISAs will be determined by your chosen platform.

With that said, our research team found that you will be better off choosing a low-cost broker like eToro instead of a traditional stocks and shares ISA. This is because eToro offers 0% commission stocks and stamp duty on your purchases will be waivered.

When you factor in your £12,300 and £2,000 capital gains and dividends tax-free annual allowance, eToro offers the most cost-effective way to invest in stocks and other assets in the UK.  

1
$50Exclusive promotion
Our score10
  • Invest in a wide range of cryptocurrencies
  • Ability to copy more experienced investors and their decisions
  • eToro crypto wallet included which makes it beginner-friendly
0% Commissionstart TradingOur score 10

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About Kane Pepi PRO INVESTOR

Kane Pepi writes for several high profile publications such as InsideBitcoins, the Motely Fool, and Learnbonds. Based in Malta, Kane is extremely skilled at complex subjects related to financial matters - including a Bachelor’s Degree in Finance, a Master’s Degree in Financial Crime, and actively engaged in Doctorate Degree research, for the money laundering threats of the blockchain economy.