Investing & Pensions
Stocks & Shares ISAs
A stocks and shares ISA lets you invest without paying UK tax on any growth or income. Unlike a cash ISA, its value can fall as well as rise. Here is how it works.
Key information
- Growth and income inside the ISA are free of UK income tax and capital gains tax
- The ISA allowance is £20,000 per tax year (2026/27) across all your ISAs
- Your capital is at risk — the value can go down as well as up
- You can transfer ISAs between providers without losing the tax benefit
On this page
What a stocks and shares ISA is
A stocks and shares ISA is a tax-efficient "wrapper" you hold investments inside — such as funds, shares, investment trusts or bonds. Any growth in value and any income (like dividends or interest) is free of UK income tax and capital gains tax, and you do not need to declare it on a tax return.
It differs from a cash ISA in one crucial way: a cash ISA is savings, so the balance does not fall, while a stocks and shares ISA is an investment, so its value can drop below what you paid in. There is no guarantee you will get back the amount you invested.
The ISA allowance
You can pay in up to the annual ISA allowance, which is £20,000 for the 2026/27 tax year. This limit is shared across all the ISAs you pay into in a tax year — cash, stocks and shares, and others combined — not £20,000 into each. The tax year runs from 6 April to 5 April.
The Government has announced changes to how much of the allowance can go into cash ISAs from April 2027. The overall £20,000 ISA allowance is expected to stay the same, but check the current rules before making large contributions, as figures and rules can change.
Costs and transferring
Providers (often called platforms) usually charge a platform or account fee, and the funds you hold have their own charges. These costs reduce your returns over time, so they are worth comparing carefully.
You can move a stocks and shares ISA to a new provider to cut costs or change what you hold, keeping its tax-free status. Always use the provider’s official ISA transfer process rather than withdrawing the money yourself, which could cause it to lose its ISA status.
Your rights & protection
- Investments held with an authorised UK firm may be protected up to £85,000 per person, per firm, by the FSCS if the firm fails — but this does not cover losses caused by investments simply falling in value.
- The firm running your ISA must be authorised by the FCA; you can confirm this on the FCA Register.
- You can complain to the provider and escalate free of charge to the Financial Ombudsman Service if a problem is not resolved.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- GOV.UK, Individual Savings Accounts (ISAs): How ISAs work (opens in a new tab). Accessed 22 Aug 2026.
- MoneyHelper, Stocks and shares ISAs (opens in a new tab). Accessed 22 Aug 2026.