Help/advice on Stocks and Shares ISAs for a beginner

miles_west

Hi folks

I’m considering opening a stocks and shares ISA but I still get confused by it all. 

I’m not someone who likes too much risk and would be interested in a platform where I could just put money into and not have to think much about it, without incurring too much costs.

I already put a little money into a regular ISA but thought I might start putting some in a stocks and shares ISA as people say it's better for the long term. 

I’m a complete noob to this area of banking so don’t know where to start. 

I’d really appreciate members advice/information on what’s the best route to go, how to go about things and the best platform to use.

Thanks!

Albermarle

Key point is that investing is only suitable for money that you do not need in the next few years. 
That is because although normally the long term trend is up, in the shorter term they can go up and down.

The choice of platform is a lot less important than the choice of investments you hold.

The good news is that nowadays there are many simple low cost investments, with different risk levels.

Have a read of this link,.

Stocks & shares ISAs: find the best platform - MSE

Emmia

I use moneybox, an app based provider for my S&S ISA. It's fairly intuitive to use, lots of information and different risk levels.

I didn't want complexity, just an easy to use platform which I pay money into and largely forget about.

Mark_d

I would suggest that funds are the best place to start, as it requires less knowledge about specific markets and you don't have to worry about diversification.  InvestEngine looks good to me https://investengine.com/

Albermarle

Mark_d said:

I would suggest that funds are the best place to start, as it requires less knowledge about specific markets and you don't have to worry about diversification.  InvestEngine looks good to me https://investengine.com/

Maybe a more established name would be better for a novice, even if the fees were a bit more.

What's happening at Invest Engine? — MoneySavingExpert Forum

Vitor

Think long-term (5+ years) for a Stocks & Shares ISA, you don’t want to be forced to sell during a market downturn.

To help reduce risk, regular monthly payments ("pound cost averaging") tend to smooth out volatility and avoid poor timing. It’s generally lower risk than dropping £1,000+ in all at once at the start of the tax year, unless you’re very confident in market conditions and willing to ride out short-term drops.
Funds which automatically track an index should be cheapest as you're not paying a manager to make choices of investments. Some managers have done very well, other have lost a packet for investors. 

dunstonh

Think long-term (5+ years) for a Stocks & Shares ISA, you don’t want to be forced to sell during a market downturn.

5+ years is short term.
Broadly speaking 1-7 years is short term.  8-15 medium term and 16+ is long term.   You get variations around that.

To help reduce risk, regular monthly payments ("pound cost averaging") tend to smooth out volatility and avoid poor timing. It’s generally lower risk than dropping £1,000+ in all at once at the start of the tax year, unless you’re very confident in market conditions and willing to ride out short-term drops.

monthly contributions really need an absolute minimum of 15 years, unlike single contributions, where you're statistically likely to get away with a shorter term.

Pound cost averaging only reduces volatility risk for the months you average it over.  Once you are invested, the amount there is subject to the exact same risks as any single premium made.

Ch1ll1Phlakes

miles_west said:

Hi folks

I’m considering opening a stocks and shares ISA but I still get confused by it all. 

I’m not someone who likes too much risk and would be interested in a platform where I could just put money into and not have to think much about it, without incurring too much costs.

I already put a little money into a regular ISA but thought I might start putting some in a stocks and shares ISA as people say it's better for the long term. 

I’m a complete noob to this area of banking so don’t know where to start. 

I’d really appreciate members advice/information on what’s the best route to go, how to go about things and the best platform to use.

Thanks!

I'm not sure investing really is for you if you don't like to much risk, as any money you invest has a chance to grow but there's also a chance you lose money. However, if you are considering small investments until your feel comfortable I'll give a few pointers and some links I used to start understanding investing.

If you're looking for something you can pay into then pretty much leave alone you are looking along the lines of passive investing. Some people do this through a global tracker using either an index fund or an ETF. EDIT: Or Multi-Asset fund see @dunstonh below

These trackers spread your funds across companies worldwide (so are diverse - i.e. you're not betting on one stock) and they, surprise, track the market. They are also low cost.

The following are links I've seen already on the forum which give a good start to understanding these concepts. The monevator article explains passive investing and the Kroijer videos give something similar but with audio if that's what you prefer. I've personal used both to understand how this works.
Passive investing Archives - Monevator
Lars Kroijer

On picking which platform to use, again you're probably looking for a cheap sit with few frills. As some suggested above, you could pay more for an established name but unless you know what you want to invest in I'd say cheap is best at this point. The MSE page linked in an above comment is a good start. I'd also recommend trying Financial Interest: Personal Finance Made Easy and looking at their brokers section on Stocks & shares ISAs. They review for each provider and display the nice tables to compare different fees they each provider will have.

Further to this, I'd suggest giving the Darren Talks Money youtube page a visit (he founded FinancialInterest.com). These loads of videos on their on different topics but I'd recommend the following three in particular (and probably in this order)
If I Started Investing in 2025, This is What I'd Do
The Best Stocks & Shares ISA in 2025 (UPDATED)
The Only Index Fund I'm Buying Now.

I'm still a relative novice to investing but these all helped me get started and understand simple passive investing. Hope this helps and if you've any other questions send another message.

dunstonh

If you're looking for something you can pay into then pretty much leave alone you are looking along the lines of passive investing. Most people do this through a global tracker using either an index fund or an ETF. 

Just picking up on this point.   Most people use multi-asset funds as they do not have the risk profile to use a single global equities tracker.   Multi-asset funds or multi-asset portfolios are the typical option.

Ch1ll1Phlakes

On @dunstonh 's point about multi-asset funds I've used some of these as part of my passive investments. The following link to Monevator gives a rough overview of how they work and suggested funds.

Best multi-asset funds - Monevator

Eyeful

1. Use tax shelters wherever possible (a) Cash ISA (b) Pensions (c) Stocks & Shares ISA.

2. Money needed within 5 years should always be in a savings account protected the FSCS Savings Protection up to £85K.

This only covers UK-authorised bank, building society or credit union on their list.

https://www.fscs.org.uk/check/check-your-money-is-protected/
 Best Savings Rates:  https://moneyfactscompare.co.uk/savings-accounts/

3. Money which you will not touch for at least 10 years could be invested.

The longer you invest for, the higher the odds of winning in the investment game.

Investing means "putting your money at risk".

There is no guarantee that you will win.

4. Low cost Global Multi-Asset give you a ready made portfolio with a share/bond split set so you can choose a level of risk you are comfortable with.  

https://monevator.com/passive-fund-of-funds-the-rivals/
watch: https://www.kroijer.com