How to choose the best (and cheapest) DIY investing Isa - our pick of the platforms and online brokers

  • We choose the best online brokers for your investments
  • Best platforms for investing in funds, shares and investment trusts?

The rise of DIY investing has delivered a revolution in the way investors buy shares, investment trusts and funds - offering them huge savings and a big boost to their returns through online brokers.

Not so long ago, investing typically required a stockbroker or financial adviser and the willingness to hand over a big chunk of commission.?

Now armed with a computer - or in some cases even just a smartphone - investors can use a DIY investing platform or online broker and the wealth of research at their fingertips to hopefully build their fortune.

But picking the right DIY platform is crucial and the array of different options has left many investors scratching their heads.

We explain how to decide on a DIY investment platform to invest in the full range of options: from shares, funds and investment trusts, to ETFs and direct retail corporate bonds.??

Check the table for the brief details and read our full round-up of each platform's features and who they could be good for below.

Admin charge Charges notes Fund dealing Standard share, trust, ETF dealing Regular investing Dividend reinvestment
AJ Bell YouInvest 0.25%? Max £7.50 per quarter for shares, trusts, ETFs. ? £1.50 £9.95 £1.50 n/a More details
Alliance Trust £20 (£10 per month) Includes four free trades a year £9.99 £9.99 £1.50 £5 More details
Barclays Direct Investing*?0.2% on funds, 0.1% on other investments?Min monthly fee £4, max £125 ?£3?£6?£1?Free?More Details?
IG? None? Shares, ETFs and trusts only (No funds)? n/a? £8 n/a n/a? More details
Charles Stanley Direct** 0.25%? Platform charge waived on shares if one trade in that month. Annual min £24 and max of £240 on shares. Free £11.50 n/a n/a More details
Fidelity 0.35% on funds £45 flat fee up to £7,500. Max £45 per year for trusts and ETFs (No shares) Free 0.1% Free for funds n/a More details
Frequent Trader (Clubfinance) None Minimum three trades per quarter, or £15 charge £4.95? £4.95 n/a n/a More details
Hargreaves Lansdown 0.45% Capped at £45 for shares, trusts, ETFs Free £11.95 £1.50 1% (£1 min, £10 max) More details
Interactive Investor? £80 £20 in free trades per quarter £10 £10 £1.50 including funds 1% (max £10) More details
iWeb £25 one-off £5 £5 n/a 2%, max £5 More details
TD Direct Investing?*** 0.30% on funds £30 account fee under £5,100 waived if regular investment set up Free £12.50 £1.50 £1.50 More details
Share Centre £57.60 1% £7.50 min 1%
£7.50 min
0.5%, min £1 0.5%, min £1 More details
Tilney?Bestinvest 0.40% n/a Free £7.50 n/a n/a More details
Vanguard?0.15%?No fee above £250k(£365 cap)
Only Vanguard funds
Free?Free only Vanguard ETFs?Free?n/a?More details?
Funds only
Axa Self Investor 0.35% Free Funds only Free n/a More details
Cavendish 0.25% Free Funds only Free n/a More details
Rplan 0.35% Free Funds only Free n/a More details
(Source: February 2016, Admin charges quoted annually, may be collected monthly or quarterly)
* Barclays Stockbroking is being merged into this service. It is currently open only to Barclays customers but will become widely available from 2017?
***?TD Direct Investing is owned by Interactive Investor, TD Direct Investing is used under licence.

Why does an Isa or investing platform matter?

The right Isa wrapper or investing account has the power to boost your investments, helping you to build a portfolio and limiting how your hard-won returns are eaten into by fees.

DIY investing platforms act as a place to buy, sell and hold all your investments and a tax-efficient wrapper around them if you choose to invest in an Isa.

When weighing up the right one for you, it's important to to look at the service that it offers, along with?administration charges and dealing fees, plus any other extra costs.

We highlight Isa and non-Isa charges, but don't forget that investing in an Isa makes sense, as it should protect your hopefully growing investments from as much tax as possible.

The good news is that costs are consistently being trimmed and being made more transparent.

Something that complicates picking a platform is that DIY investors can hold a variety of assets in their Isa - not just one fund or a handful of them.?

Charges vary for those Isa investors choosing to hold investment trusts, ETFs, shares and directly traded corporate bonds, alongside traditional managed funds in the form of OEICs and unit trusts.

Bearing all of this in mind we've busted the charges of what we consider some of the best (and cheapest) DIY investing platforms. We would advise considering the points below first.


DIY investing platform prices can be chiefly be split into two camps. Some charge a flat administration charge, while others charge a percentage of investors' holdings.

The former tend to charge for buying and selling investment funds, while the latter tend to have bundled this cost into their admin fees and offer free fund dealing.?

All charge for buying and selling shares, investment trusts and other products that are not funds, but the dealing fees on these vary from as low as £2.50 to £15.

If you are a buy and hold investor putting away a large sum of money then you may benefit from a flat fee rather than percentage-based charging, which can mount up to a hefty amount. But if you plan on buying and selling regularly watch our for dealing charges, as these can also add up substantially and easily erode the gain from a flat fee.

Five things to consider when picking a platform

1. Cheapest is not always best: You need to think about a combination of price and service - it is worth paying for quality but make sure you are actually getting that.

2. What will you invest in: Different dealing fees for shares, investment trusts and funds mean you need to think about how you will invest and tailor your choice accordingly.

3. Tools and information: What level of useful portfolio building tools and information does a platform offer?

4. Overall charges: Don't just look at the admin fee or dealing charges. You need to combine both to get a true cost, along with costs such as dividend reinvestment and regular dealing charges. A low admin fee might look good but if you are an active investor who buys and sells a lot, then dealing charges will soon rack up and send costs soaring.

5. Extra fees: Check for regular monthly investing discounts, dividend reinvestment fees, transfer charges and other elements?

Compare the best DIY investing platform for you

Below we publish our view on the best DIY investing platforms and explain who they are good for and why we have picked them.

We have also created a new tool to help you compare the best DIY investing platforms and online brokers with our partner BrokerCompare.

You can select how you want to invest, whether in a general account, Isa, Sipp or combination of these, and how much you will invest and how often you are likely to buy and sell funds and shares.

It will then do the calculations to show you which DIY investing platforms and online brokers look like the best deal for you. Try it now and if you have any feedback on it, please email [email protected]


How we choose the best DIY investing platforms?

We have focused on two vital aspects, cost and quality. This is not a collection of all of the absolute cheapest platforms, these are some we think stand out and that also compete keenly on price.

All discount initial fund charges down to zero in most cases. Some funds can still carry an initial charge though - platforms should provide you with a list to check.

We have picked DIY Isa platforms to suit different investors and focus on those that offer a choice of investments - not just funds. Each one will be better for some investors than others and you should choose depending on your needs. Remember there are plenty of others available too.

This list is in no particular order.

Hargreaves Lansdown - Vantage Isa

Hargreaves Lansdown is the big gun of DIY investing. The website is packed with information from its advisers and analysts, the shares and fund data is comprehensive and there is a very handy app.

Investors pay a 0.45 per cent fee on their total fund investments up to £250,000; 0.25 per cent to £1m, 0.1 per cent to £2m and nothing above that. Shares and investment trusts also incur a 0.45 per cent charge on the entire holding, capped at £45.

Hargreaves has negotiated some reduced annual management charges from fund managers.

Fund dealing is free. Share, investment trust, corporate bond and ETF dealing costs £11.95 per trade. If you trade more than 10 times per month share-dealing costs step down. Regular monthly share and some investment trust investing is £1.50, dividend reinvesting is 1 per cent, with a £1 minimum charge and £10 maximum.

Hargreaves has its very influential Wealth 150,?a range of Master Portfolios, and its Portfolio+ service to make investing progressively easier and more hands off

Standard non-Isa dealing: Hargreaves' non-Isa Vantage account carries the same charges except for removing the fee for holding shares and trusts.

Who is it good for? Those looking for an advice-rich service that is price-competitive but not the cheapest around. It does come with lots of bells and whistles, including a very good app and portfolios for easy investing. It offers a proven popular service? weighted towards funds but with access to investment trusts, ETFs, shares and the corporate bond market under one roof. [More details on Hargeaves Lansdown]

Interactive Investor

Interactive Investor customers must pay an admin fee of £20 per quarter, adding up to £80 per year, BUT you get that back in free trades spread evenly over four quarters.

Standard charges are £10 to buy or sell funds, shares, investment trusts or ETFs, or £1.50 for regular monthly investing. Make ten standard trades in the previous month and a frequent trader rate of £5 kicks in.

The rebated admin fee works out at £20 per quarter, which gives you two free trades every three months, or regular investing up to that value at £1.50 each time. So invest into four funds or trusts per month at £1.50 each = £6 x three months = £18 and you are within your £20 allowance.

If you were planning on investing every month by direct debit into four investments you would therefore all but get your £80 back.

Dividend reinvestment is 1 per cent of the sum reinvested up to a maximum of £10.

It has a selection of model portfolios for easy investing that cost just £10 each to set up.?

Who is it good for? Interactive Investor's pricing structure is good if you play it right, getting all of your admin fee back in free trades. It is definitely worth a look for those with larger sums to invest.

It offers a wide range of investments along with solid research and is good for those regularly investing. The model portfolios on offer are well researched and a cheap and easy way to invest.?[More details on Interactive Investor]


Fidelity is one of the big investing names and has a platform packed with useful information, guides, market commentary and videos.

It has recently made some changes to its account, these make it potentially good for those holding popular investment trusts and ETFs but remove the option to hold shares.?

Fidelity previously offered a ShareNetwork account (run by Charles Stanley) where investors had to separately hold their shares, investment trusts and ETFs.

Now that service has been removed and investors can buy a select range of investment trusts and ETFs through the fund platform. (Existing share investors are being moved to Charles Stanley.) Fidelity says it has plans to include share-dealing but won't be drawn on when. So, there is currently no facility to hold shares with Fidelity.

Investing in funds carries a 0.35 per cent charge on investments up to £250,000 and 0.20 per cent above that and 0 per cent above £1million.

However, if you are investing small amounts the charging structure is slightly different. Fidelity charges a flat £45 on amounts up to £7,500 before the 0.35 per cent rate kicks in.

There are no fund dealing charges for buying and selling.?

If you want to invest in exchange traded funds or selected investment trusts, buying and selling costs 0.10 per cent, which is very competitive for investment trusts and ETFs. Be warned, however, the range is limited.?

Who is it good for? Fidelity offers very useful service. It is one of the big guns, has model portfolios, tools to help you decide how to invest and a wealth of information on offer.

The fact that you can't buy funds and shares in the same Isa will be a major drawback for many DIY investors.

However, the new charging structure does make this potentially a good platform for building a portfolio of popular ETFs and investment trusts. Investors get dealing at just 0.1 per cent of the amount bought or sold. On a £1,000 investment that is just £1. [More details on Fidelity]?


Stockbroking platform IG offers an affordable option for those ditching funds and focusing on shares and exchange traded funds, as it comes with no admin fee and £8 dealing.

The provider offers a range of complex products such as spread betting or forex, but you can also build a share or exchange traded portfolio and put it in an Isa.

As a promotion it has removed dealing fees for more than 1,200 ETFs until 30 April 2017 meaning you could build a portfolio for nothing other than the costs of the products.

Share dealing is?£8 per trade but frequent traders pay just £5 by placing ten share transactions or one trade on IG's CFD or spreadbetting services in the previous month. ETF dealing will cost the same from May.

There are no annual?administration platform fees so your only costs would be dealing charges and any management fees on ETFs.

Who is it good for? This is a low-cost way to build an ETF and share portfolio as long as you are unlikely to want to buy funds.

IG doesn't charge any administration fees or charges to hold an Isa, share-dealing is good value at £8 and the free ETF trading offer is attractive for portfolio-building. If you want to start trading ETFs from May you will need to pay £8 as a standard charge to buy or sell.

?ou can't hold funds with IG so would need an account with another provider if you want to do this too - an Isa investors need to be aware that they can only pay money into one investment Isa in any tax year.?[More details on IG]

Alliance Trust Savings

Alliance Trust investors pay?£10 per month, which works out at £120 per year.

Investors get four online trades per year included. It charges a flat £9.99 per trade for buying funds, shares, ETFs and investment trusts. However, doing this as regular monthly online direct debit investing slashes the charge to £1.50 per deal, while dividend reinvestment costs £5.

It offers access to the full run of investment trusts, shares, ETFs and direct bonds available. Investors using it can access research and tools from Morningstar with their portfolio.

Standard non-Isa dealing:? Charges are the same for standard share dealing, including the administration fee.

Who is it good for? Buy-and-hold investors with large sums invested could do well here as there is a flat fee rather than a percentage charge, however, they need to weigh up the dealing costs, as Alliance Trust charges £9.99 to buy and sell funds.

Investors can buy trusts, shares, corporate bonds and ETFs and it is good for monthly regular investors in these too, although dividend reinvestment is pricey. [More details on?Alliance Trust Savings]

Frequent Trader (Club Finance)

Frequent Trader previously offered buying and selling shares and investment trusts for just £2.50 and free fund dealing, with an?annual administration fee at 0.24 per cent, with a minimum of £120.?

New charges have come in, however. The admin fee has been removed altogether, but fund and share dealing now costs £4.95.?

Unless you trade three times per quarter, a charge of £15 is applied every three months. This means the cheapest annual fees could be is a shade under £60.?

The platform is administered by a Blackpool stockbroker James Brearley & Sons.

Only one live Isa at a time

Remember, you can only pay new money into one Isa wrapper each year, but you can keep an old-tax-year's Isa wrapper open (with no new payments into it) and open a new-tax-year one, or transfer all your holdings onto the same platform (beware exit charges typically apply)

Standard non-Isa dealing: Charges are the same.

Who is it good for? This is a fairly basic looking service when compared to Hargreaves etc but share dealing is cheap, although not now as cheap as it once was at £2.50 (or the 50p it started at before that).

In return for that rise in dealing charges, the annual admin fee has gone.?DIY investors?must decide where the balance between that and paying £4.95 for share-dealing and fund dealing is and remember that to benefit from no admin fee at all they must trade three times per quarter.

If you plan to build a portfolio of shares this is still a cost effective way of doing it. But building a portfolio of 20 shares will now cost you £99 compared to £50 previously.?[More details on Frequent Trader]

TD Direct Investing?(owned by Interactive Investor)

TD Direct's charges are slightly confusing but it can prove to be a cost effective way to invest.

An account fee of £36 per year (£30 plus VAT) is removed if you hold more than £5,100 in your Isa or set up regular monthly investing.

An extra charge applies on top of this for fund investments of 0.3 per cent up to £250,000 and 0.2 per cent above that level, with a maximum charge of £1,500.

Fund dealing is free, while share, investment trust and ETF dealing costs £12.50 as standard, stepping down as far as £5.95 for those trading 20 times or more on average per month across the previous three months.

An introductory offer sees share dealing charges cut to £5.95 for the first three months.

Regular monthly share, trust and ETF investing costs £1.50, as does dividend reinvestment.

There is a quick start and recommended fund range for easy investing and recommended ETFs.

Standard non-Isa dealing: Trading account costs £48 per year (£20 plus Vat per six months), this fee is removed for those with a linked TD Isa or Sipp, or who place more than one trade per six months, have a portfolio of £15,000-plus or hold funds more £10,000 or more.

Who is it good for? TD Direct's charges work out at reasonable value for fund investors if you qualify for the removal of the account fee and so just pay the 0.3 per cent platform charge. Qualifying share and investment trust investors would pay no fees on these holdings. Free fund dealing is good, but standard share and trust dealing at £12.50 could soon rack up. Regular monthly investors will benefit from the £1.50 fee for this though. [More details on TD Direct Investing]

The Share Centre - Self-Select Isa?

The Share Centre offers investors a full DIY choice in its Self Select Stocks and Shares Isa. It allows investors to hold funds, investment trusts, shares, ETFs and corporate bonds, but charges a monthly fee of £4.80 (£4 + VAT) so £57.60 per year.?

Fund, share, ETF, investment trust and corporate bond dealing costs 1 per cent (£7.50 min). Alternatively, if you pay £24 a quarter, there is a flat £7.50 buying and selling charge with its trader option.

Regular monthly investing in funds shares, ETFs, trusts and bonds costs 0.5 per cent (minimum £1).

The Share Centre offers cost-effective share dividend reinvestment into individual stocks, trusts and ETFs at 0.5 per cent (min £1).

Standard non-Isa dealing:? The full DIY Self Select dealing account outside of an Isa carries a £1.80 per month admin fee (£1.50 plus VAT) so £21.60 per year and the same trading fees.

Who is it good for? The Share Centre's flat administration fee makes it a good option for those with more than modest sums - anyone with with just over £12,500 invested will pay less annually here than at Hargreaves Lansdown. That needs to be weighed up against fund dealing charges, however, these could soon rack up if you do much buying and selling.

For those with large sums invested it could prove good value compared to percentage-based charges even when dealing fees are taken into account.

It's good for stock pickers who reinvest dividend shares, trusts or ETFs and investors looking for a variety of investments, with some good analysis, tips and advice. [More details on Share Centre]

iWeb - Self Select Stocks and Shares Isa

iWeb run by Halifax sharedealing offers a competitively priced service. Its stocks and shares Isa offers the chance to invest across shares, investment trusts, funds and ETFs, with a big one-off set-up charge but then no annual or quarterly admin charge beyond that.

That set-up fee was £200 but has been cut to £25. It costs just £5 to buy or sell funds, shares, investment trusts or ETFs. Dividend reinvestment is 2% with a £5 maximum charge.

Standard non-Isa dealing:? Charges are the same

Who is it good for? iWeb is keenly priced for those looking to regularly buy investment trusts, shares or ETFs thanks to its low £5 dealing fee and the new set-up fee of just £25 is good value. Bear in mind that you do need to pay for fund-dealing here. And also check out Club Finance's Frequent Trader offer.?[More details on iWeb]

BestInvest - Select Isa

Bestinvest Isa and standard investors pay annual? charge of 0.40 per cent a year on their portfolios up to £250,000, and 0.2 per cent above that to £1million. No extra charges are added above £1m.

Bestinvest has no dealing charges for funds and standard share and investment trust dealing is decent value £7.50.

Unfortunately, however, there are no reduced regular monthly investing charges for shares and trusts, nor is there cheap dividend reinvesting.

In an unusual step those who invest through a Sipp, as self invested personal pensions are known, see their charges cut to 0.3 per cent and 0.2 per cent, respectively.

BestInvest offers a selection of model portfolio funds, rated in an investing risk-style.?

Standard non-Isa dealing: Charges are the same.

Who is it good for? BestInvest is a good option for fund investors looking to take advantage of its research and lack of dealing charges.

Those buying shares, investment trusts and ETFs benefit from a £7.50 dealing fee, which is lower than most. The ready-made portfolios offer an easy hands-off route into investing at a reasonable cost.

It's also an interesting offer if you have a small Sipp and want to manage all your investments under one roof, as the Sipp charge is competitive. [More details on BestInvest].

AJ Bell Youinvest

AJ Bell Youinvest has a 0.25 per cent annual administration charge. However, for non-fund holdings in Isas, such as investment trusts, shares and ETFs, this is capped at £7.50 per quarter. In a Sipp the cap is £25 per quarter.

For fund holdings it steps down to 0.1 per cent from £250,000 to £1million, 0.05 per cent to £2million and then nothing above that.?

Fund dealing costs have been cut and will now set you back £1.50, previously £4.95. Share, ETF and investment trust dealing is £9.95 - or £4.95 if you have traded ten times in the previous month.

Regular investing costs £1.50 into funds, FTSE 350 shares and a limited range of investment trusts.

Who is it good for? Youinvest scores with a low percentage admin charge that is also capped for shares, trusts and ETFs. It does have fund dealing charges, but a cut down to £1.50 makes these considerably more competitive than before.

There is cost effective regular monthly investing in funds, shares and selected investment trusts. There is no cheap dividend reinvestment.?[More details on Youinvest]

Charles Stanley Direct

The broker's online platform Charles Stanley Direct platform has a low 0.25 per cent annual charge on fund holdings.

Changes arriving on 1 November 2016 will see this cut to 0.2 per cent between £250,000 and £500,000, 0.15 per cent to £1million and 0.05% to £2million.?

There is also a 0.25 per cent charge on investment trust or share holdings, with a minimum of £24 and maximum of £240 per year. This is removed monthly if you trade at least once in that month.

A Sipp costs £100 plus VAT per year but this fee is removed if you have more than £30,000 across all the broker's online platform services.?

Fund dealing is free, but investment trust and share dealing will cost £11.50 and there is no regular investing option for this.

Investors holding individual bonds and overseas shares must pay £30 per year per holding.

Who is it good for? Active fund investors get a good deal at Charles Stanley with a low annual fee and no buying or selling charges. This is also a decent Sipp option for those with more than £30,000, who can then avoid the extra fee for pensions.

Those buying and holding investment trusts and shares can also do well if they trade each month and lose the platform fee, but that needs to be weighed up against £11.50 dealing charges adding up and the lack of a cut-price regular monthly investing option.[More details on Charles Stanley Direct]


Once you've decide on an investing Isa you also need to work out what to put in it.?

You don't need to do that immediately, however. Good platforms will let you pay cash into the wrapper to use up your allowance and then take your time investing it. Don't leave it sitting around too long though, as you will be losing interest you could have earned in a savings account.

Here is some essential reading to help you decide how to invest:

1. Six simple steps for wiser investing

2.?How to invest in funds, investment trusts and ETFs

3. How to invest in shares

4. Fund and investment trust ideas from the experts

5.The best and cheapest low-cost tracker funds?

Funds-only platforms?

Among the wealth of options for DIY investors, there are a number of funds-only platforms. You will not be able to invest in shares, investment trusts, or ETFs (usually) here, but you can often benefit from free fund dealing and some keen pricing.

We highlight three below that stand out.


Rplan is an interesting funds-only option for DIY investors. Its positions itself as a technology-rich answer to help you invest better.

It charges a simple 0.35 per cent annual fee on your investments, with no other charges - so no dealing, exit, transfer fees etc. You can open a standard investing account, or an Isa, but it doesn't offer a Sipp.

Rplan's tools can help you compare funds on performance, risk and charges and you can try them all out on the site before you sign up.?

Who is it good for? Investors only interested in buying funds, you can't add any shares, investment trusts or bonds into the mix. The rplan system is about getting people to invest better, so you can create different investment pots and goals, check how funds measure up and use some clever tools.

[More details on rplan]

Cavendish Online??

Cavendish Online is another funds only DIY investing platform and stands out with its very low percentage charges.

Investors pay just 0.25 per cent as a fee for using the platform and no dealing fees, initial charges, or exit fees if they decide to leave.

Cavendish has long been a low-cost investing option without some of the frills of its rivals. It offers a selection of three model portfolios graded by risk.

Who is it good for? This is cheap investing but it is only for buying funds, you can't add any shares, investment trusts or bonds too. This is a low-cost option for those who want to take charges to the bone and are happy to forgo the tools, tips and content others offer.

[More details on Cavendish]?

Axa Self Investor?

Axa only offers funds, despite being badged with the official stocks and shares Isa tag, but carries some useful tools and advice.?

It offers all-in-one funds and expert's quick start portfolios, with investing options designed to match your attitude to risk that can be passive-only, blended, or active-only.

Axa Self Investor charges 0.35 per cent up to £250,000 and 0.2 per cent above that with free fund dealing, albeit it warns some funds may carry entry or exit charges.?

Who is it good for? Clean and simply laid out, Axa Self Investor offers an information-rich website to fund investors. But you will need to weigh that up against rival platforms that charge a similar amount and offer share and investment trusts.

The All-in-one and Quick Start options give investors a simple route into some expert-selected easy investing. ?[More details on Axa Self Investor]


Before you make a final decision, think about the points above on picking the best platform, what you want to invest in: funds, ETFs, investment trusts etc, and how you want to do so: lump sum, buy-and-hold, regular investing or trading.

Don't forget that there is a delicate balancing act between administration fees and dealing charges.

Do your own research, sit down and work out how the DIY investing platforms you favour compare against each other. This homework will be worth it in the long run.

  • If you think you have a better investing DIY investing platform suggestion please tell us in reader comments below

Locked in: Watch out for transfer charges and other fees from investing platforms, as well as dealing and admin charges.

Locked in: Watch out for transfer charges and other fees from investing platforms, as well as dealing and admin charges.

Why invest through an Isa

Investing in an Isa is one of the few opportunities we have for making money tax-free.

Each tax year investors get an Isa allowance - this is £15,240 for the 2015 and 2016 tax years and will then be £20,000 from April 2017.

The reason for investing in an Isa is its tax-friendly nature, with the added bonus that you don't need to worry about a tax return or declaring gains.

Any gains within an Isa are free from capital gains tax. Everyone has a CGT allowance of £11,100 per year (2016 to 2017) and many may feel they are unlikely to ever make more than this in profit each year from selling their assets.

However, those who invest consistently over time may one day be surprised at how much those investments are worth and holding them in a tax-free wrapper makes sense.

Income from investments is also treated in a tax-friendly way in an Isa. Corporate bond and gilts income is tax-free. Dividends on shares previously involved a needlessly complicated 10 per cent tax credit system and then effective tax rates of nothing for basic rate taxpayers and 25 per cent for higher-rate taxpayers.

That changed from the 2016 tax year to a £5,000 tax-free dividend allowance and then rates of 10 per cent at basic rate and 35 per cent for higher rate taxpayers.

However, if you hold shares, investment trusts or a fund in an Isa there is no tax to pay on dividend income.?

While you may be nowhere near using all of the £5,000 dividend allowance now, you might get there one day, so putting your investments in a tax-free wrapper is a sound tactic.

Isa investing also means you don't have to fill in dividend income on a self-assessment form and removes the headache of tax returns for any capital gains.

It used to be that investing in an Isa was not always worthwhile, as charges were higher. In most cases charges are now exactly the same as for normal investing, so using an investing Isa makes sense.







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