Stocks and Shares ISAs Explained: Four Platforms Worth Knowing

From 6 April 2027, anyone under 65 will be able to pay just £12,000 a year into a cash ISA — down from £20,000, and the first cut in the limit's history. The overall £20,000 ISA allowance survives untouched. The government has simply decided where it would like the other £8,000 to go: the stock market.

Whether or not you agree with the nudge, now is a sensible moment to understand stocks and shares ISAs properly — what the wrapper does, how the 2027 rules reshape it, and what separates a cheap platform from an expensive one.

What is a stocks and shares ISA?

A stocks and shares ISA isn't an investment. It's a wrapper — a tax boundary around your money that HMRC doesn't cross. Inside it there is no capital gains tax, no dividend tax and no tax on interest. Gains made inside an ISA never appear on a tax return, because there's nothing to declare.

You can pay in up to £20,000 per tax year (2026/27), split however you like across cash ISAs, stocks and shares ISAs and the other ISA types. The allowance resets every 6 April; anything unused is gone for good. What you hold inside the wrapper is up to you and your platform: shares, ETFs, investment trusts, bonds and, with some providers, mutual funds.

One piece of jargon worth learning before you open anything: a flexible ISA lets you withdraw money and pay it back within the same tax year without burning more of your allowance. Plenty of providers still don't offer it; all four platforms below do.

More than 20 million people in the UK hold an ISA — but much of that money sits in cash-only accounts, or on platforms whose fees quietly eat the tax benefit. Which brings us to why the rules are changing.

The April 2027 ISA changes, explained

The Autumn 2025 Budget announced the biggest reshaping of ISAs since they launched, and the government filled in the technical detail in June 2026. Here's what's coming.

The cash ISA allowance drops to £12,000. From 6 April 2027, under-65s can put a maximum of £12,000 a year into cash ISAs. The overall allowance stays at £20,000 — frozen until at least 2030/31 — so using it in full means directing at least £8,000 into a stocks and shares ISA or another investment ISA. It's the first-ever cut to the cash limit, which had stood at £20,000 since April 2017. Savers aged 65 and over are exempt, from the start of the tax year in which they turn 65.

Money you've already saved is untouched. The cap applies to new contributions only. Anything sitting in a cash ISA before April 2027 stays sheltered and keeps earning tax-free interest.

The door becomes one-way. From April 2027, under-65s will no longer be able to transfer money from a stocks and shares ISA into a cash ISA. Transfers in the other direction — cash into investments — remain open.

Parking cash inside an investment ISA stops working. Under anti-avoidance rules announced on 23 June 2026, interest paid on cash held inside a stocks and shares ISA will attract a flat 22% charge from April 2027 — and this one applies to over-65s too. Portfolios made up entirely of money market funds won't qualify either, though some cash or money-market exposure within a broader portfolio is fine. The draft legislation still faces a technical consultation, so details could shift; the direction won't.

The squeeze extends beyond the ISA rules. Dividend tax rose two percentage points in April 2026, to 10.75% basic and 35.75% higher rate, above a £500 allowance. Tax on savings interest rises two points from April 2027. And the capital gains exemption now sits at £3,000 — down from £12,300 as recently as 2022/23 — with gains on shares above it taxed at 18% or 24%.

Put it together and the message is blunt: outside a wrapper, more of your returns get taxed every year. Inside a stocks and shares ISA, none of them do.

How to choose a stocks and shares ISA

There are three routes into the market: DIY platforms, where you pick the investments and typically pay 0–0.2% a year all-in plus currency conversion; managed services, where a firm runs a portfolio for you at around 0.5–1% a year plus fund costs; and advised routes with a human adviser, where 1.6–1.9% a year is common. Those fees only make sense within their own category, and this guide focuses on DIY, flagging managed options where they exist.

For a DIY stocks and shares ISA, five things matter most. The platform fee should be zero, or low and capped, because a percentage fee compounds against you forever. Dealing commission should be zero — £6–12 a trade punishes anyone investing monthly. The FX fee is the hidden cost on US shares. Flexible ISA status is worth having. And the provider should be FCA-regulated with FSCS protection: investments are covered up to £85,000 per firm, bank deposits up to £120,000 since December 2025.

Interest on uninvested cash is a pleasant bonus — though after the 2027 rules, treat it as a feature, not a strategy. Fees are the only part of investing you fully control: returns are uncertain, costs are guaranteed.

Four stocks and shares ISA providers worth a look

The UK market has dozens of credible platforms — Vanguard, AJ Bell, Fidelity, interactive investor, Freetrade and InvestEngine among them — so treat what follows as an introduction to four strong options, not a complete list. All four score well against the checklist above, and all are FCA-regulated, FSCS-protected and flexible.

Fees and rates correct as of July 2026, variable and subject to change — always check the provider's live pricing page before opening an account.

XTB — the low-cost all-rounder

XTB gets closest to a genuinely free stocks and shares ISA. There's no platform fee below €250,000 (above that, 0.02% a year applies only to the excess — a £300,000 portfolio would pay roughly a tenner), no dealing commission unless you trade more than €100,000 a month, and idle cash currently earns 4.00% AER variable, the best standard rate of the four. Fractional investing starts from £10, transfers in can be made in-specie, and the app covers several thousand stocks and ETFs.

The trade-offs: there are no mutual funds or investment trusts, no managed option, and the 0.5% FX fee sits mid-table. But if your plan is a monthly direct debit into broad ETFs, there is very little here to pay.

IG — everything under one serious roof

Founded in 1974 and FTSE 250-listed, IG scrapped its custody fee in January 2026 and offers commission-free dealing on 12,000+ shares and ETFs across the UK, US, Europe and Australia, including 24-hour dealing on 600 US stocks. It's the only platform here with a fee-free Junior ISA and a SIPP route (the pension carries a £210 annual third-party admin fee), plus a managed option in its Smart Portfolio ISA — BlackRock-built portfolios at 0.5%, capped at £250, plus fund costs. Uninvested cash earns 3.75% AER on up to £100,000 if you hold a position or trade that month.

The trade-offs: the 0.70% FX fee is the joint-highest of the four, commission-free pricing requires the default instant currency conversion setting, and there are no fractional shares, mutual funds or bonds. This is the pick for consolidating a family's accounts in one place rather than for absolute rock-bottom costs.

eToro — three ISAs in one app

eToro's ISA range is powered by Moneyfarm, the FCA-regulated wealth manager — a feature, not a catch. It's the only platform here offering a cash ISA, a DIY stocks and shares ISA and a fully managed ISA under one login, with actual humans on phone, chat or video call. The DIY version covers 1,000+ stocks, ETFs, bonds and mutual funds at £3.95 a trade with a 0.35% custody fee capped at £45 a year; the managed route starts at 0.75% plus fund costs — around 1% a year all-in on smaller pots, which is fair for managed.

The trade-offs: uninvested cash earns nothing in the DIY ISA, there are no fractional shares, transfers in arrive as cash rather than in-specie, and frequent traders will pay less elsewhere. The ISA also runs separately from eToro's trading platform — no copy trading, CFDs or crypto inside the wrapper (crypto isn't allowed in any ISA). Best suited to beginners who want every option, plus a human to call.

Trading 212 — the FX price leader

Trading212 is the cheapest of the four for US shares: £0 platform fee, £0 commission and a 0.15% FX fee that undercuts everyone else in this list. Fractional investing starts from £1, transfers in can be made in-specie, the range spans 12,000+ stocks and ETFs, and uninvested cash can earn 3.80% AER if you opt in — paid via money market funds and partner banks rather than a simple bank deposit, which is worth understanding before you rely on it.

The trade-offs: it's DIY-only — no SIPP, no Junior ISA, no managed option, no funds, no phone support — and the company is privately held, so it discloses less than its listed rivals. On a £1,000 US trade the FX saving over the others is a few pounds: real, but small next to the recurring percentage fees below.

What about Robinhood UK?

Robinhood launched its UK stocks and shares ISA in February 2026, and for one specific investor it's hard to beat: no platform fee, no commission and a 0.10% FX fee during US market hours — the lowest mainstream conversion cost in the UK. The catch is the range: roughly 5,000 US-listed stocks and ADRs, tradable whole or fractionally, but no UK shares, no funds and no bonds. It's the cheapest door in town, and it opens onto exactly one country. A sensible option for dedicated US stock-pickers; not a home for a diversified portfolio on its own.

Why fees matter more than they look

Percentage fees never arrive as an invoice, which is exactly why they do so much damage. IG's own "Fat Cat Index" research found that active investors on the UK's twelve priciest platforms overpay by £515 a year on average.

Stretch that over an investing lifetime and the numbers get uncomfortable. Take a saver with £20,000 to start, adding £500 a month for 20 years at 6% a year before charges. At roughly 0.2% all-in, that grows to around £278,000. At 0.4%, typical of a mainstream fund platform, about £271,000. On an advised route at 1.8% a year, roughly £228,000.

Same market, same deposits, same returns — a difference of about £50,000, and the only variable was the logo on the app. The gap never shows up as a fee on any statement. It's compounding you simply never got.

Transparency: we have affiliate partnerships with providers featured in this article. If you sign up through our links we may earn a commission, at no extra cost to you. It doesn't change our view — which is why we've told you the downsides of each.

Capital at risk. Investments can fall as well as rise and you may get back less than you put in. Tax treatment depends on individual circumstances and may change. This is not financial advice — do your own research.