Stocks and shares ISA for beginners: How to get started

When it comes to saving, many people keep money in savings accounts or cash ISAs for short-term goals, emergencies, or unexpected expenses. While these products can play an important role in managing your finances, inflation can reduce the purchasing power of cash over time if it outpaces the interest being earned.

As a result, some people choose to explore investing as another option for their longer-term financial goals, including through stocks and shares.

However, it's important to remember that investing is typically a medium to long-term commitment, and the value of investments can go down as well as up. You may get back less than you originally invested.

If you're new to investing, this guide explains the essentials in a clear and straightforward way.

What are stocks and shares?

Stocks and shares are investments that represent ownership of a part of a company. When you buy shares, you become a shareholder, meaning you own a small portion of that business. If the company performs well, the value of its shares may rise over time, and some companies may also pay dividends to their shareholders. However, share prices can also fall, meaning the value of your investment can go down as well as up, and you could get back less than you invest.

What is a stocks and shares ISA?

A stocks and shares ISA is a tax-efficient account that allows you to invest without paying UK Income Tax or Capital Gains Tax on any returns earned within the ISA.

Instead of keeping your money in cash and earning interest, you can use a stocks and shares ISA to invest in assets such as funds, shares, and bonds.  As your money is invested, its value can go down as well as up, and you could get back less than you invest.

A few other basics worth knowing:

• Every UK resident aged 18 or over gets an annual ISA allowance - currently £20,000 (2026/27) per tax year.
• You can hold your allowance in cash, stocks and shares, or split it across different ISA types, as long as the total stays within the limit.
• Unused allowance doesn't carry over; it resets each tax year on 6 April.

Learn more in our guide on what a stocks and shares ISA is.

What are the types of stocks and shares ISA?

When people think about investing, they often imagine choosing individual stocks and shares. While this is one approach, there are several types of stocks and shares ISA, each designed to suit different investment styles.

The type of stocks and shares ISA that's right for you will depend on factors such as your financial goals, how comfortable you are with investment risk, your level of investment knowledge, and how involved you want to be in managing your investments.

For an overview of some common options, take a look at the comparison chart below.

These are just some of the factors to consider when comparing the stocks and shares ISAs available on the market. This chart represents a general overview of the main categories of stocks and shares ISA and even the same type of stocks and shares ISA may vary from provider to provider. It's important to look over the specific product terms and conditions before taking out any investment product.

Some investors may choose to hold more than one stocks and shares ISA, combining a managed portfolio or fund with a DIY option to balance convenience with greater control. Whatever approach you take, investing always involves risk, and you could get back less than you invest.

How much money do I need to start investing in stocks?

If you're new to investing, you don't need a large amount of money to get started. The minimum investment varies by provider, with some allowing you to invest from as little as £1.  At Unity Mutual, you can start with a one-off payment of £25 or set up a monthly Direct Debit from £10. 

For people new to investing, starting small and investing regularly can be a practical way to build your investments over time, while also getting more familiar with how the stock market works.

Before investing, it's important to understand the fees that may apply on a stocks and shares ISA, which can include:

• Account or platform fees
• Fund management charges
  
• Trading fees

There's a 1% annual management fee with our Stocks and Shares Flexible ISA. This is not directly charged to the account, it is reflected in the fund’s value.

Cash ISA vs stocks and shares ISA

Cash ISAs and stocks and shares ISAs both offer tax-efficient ways to put your money to work, but they do so in different ways. The table below sets out some of the differences to help you consider which fits with your financial situation and goals.

Many savers may hold both a cash ISA and a stocks and shares ISA to balance security with potential growth.

How much risk is involved?

All investing involves risk, which means the value of your investments can go down as well as up, and you could get back less than you invest. The level of risk will vary depending on the investments you choose and market conditions.

While risk can't be removed entirely, there are some common ways investors may choose to manage it:

Investing for the medium to long term

Markets can rise and fall over shorter periods. Some investors choose to invest over the medium to long term, giving their investments more time to weather market fluctuations. However, it's important to remember that past performance is not a guarantee of future returns.

Diversification

Spreading investments across different companies, sectors and asset types can help reduce the impact of any single investment performing poorly. For example, at Unity Mutual, money invested through our Stocks and Shares Flexible ISA is held in our Equity Fund, which tracks the performance of more than 600 UK companies.

Regular investing

Some people prefer to invest a set amount each month rather than investing all their money at once. By spreading investments over time, they buy at a range of market prices instead of trying to decide the best time to invest. However, investing always involves risk and you could get back less than you invest.

If the value of your investments falls, it may help to understand why that happens and what your options are before making any decisions.

Can you withdraw money from a stocks and shares ISA?

Generally, a stocks and shares ISA isn't locked away, and you can withdraw money when you need to.

The withdrawal process for a stocks and shares ISA can vary slightly depending on your provider. Here's how it works with Unity Mutual’s Stocks and Shares Flexible ISA:

Step 1: Decide how much you want to withdraw

Think about whether you need a partial or full withdrawal. Check your current account balance, keeping in mind that your investments' value may fluctuate.

Step 2: Submit your withdrawal request

When you're ready to withdraw, you'll need to complete our ISA withdrawal form. Just keep in mind that our funds are priced weekly, so your withdrawal will be processed at the next available unit pricing.

Once completed, please allow 3–5 working days for the payment to reach your account.

Important: If, after you submit your withdrawal request, the value of your account drops below the amount requested, we will pay out the full remaining balance.

What other types of ISA are there?

The £20,000 annual ISA allowance can be split across different ISA types, so it's worth exploring the other options available, besides cash ISAs and stocks and shares ISAs, before deciding where to invest your money.

Lifetime ISA

You can contribute up to £4,000 per tax year, and the government will add a 25% bonus on your contributions, up to £1,000 annually. 

You must be a UK resident aged 18 to 39 to open a Lifetime ISA. The money can be used to buy a first home worth up to £450,000, or withdrawn from age 60. Withdrawals for any other reason usually incur a 25% government withdrawal charge.

Find out more about Unity Mutual's Lifetime ISA.

Unity Mutual’s Stocks and Shares Flexible ISA

Unity Mutual’s Stocks and Shares Flexible ISA* offers a tax-efficient way to invest for the medium to long term. Your money is invested in the Unity Mutual Equity Fund, which tracks the performance of more than 600 UK companies. This means your money is invested for you across a range of companies without having to choose individual shares yourself.

It’s available to UK residents aged 18 and over, and you can start investing with a £25 lump sum or a £10 monthly Direct Debit. Any returns you make are completely tax-free, and you can contribute up to £20,000 across your ISAs in the 2026/27 tax year.

As with all stock market investments, the value of your investment can go down as well as up, so you could get back less than you originally invested. 

Opening a Stocks and Shares ISA with Unity Mutual only takes a few minutes. Before applying, make sure to read the product's terms and conditions. You may want to get advice from an independent financial adviser. You can find a local adviser at unbiased.co.uk, though financial advice may come with a fee, so be sure to check costs beforehand.

Ready to get started? Apply for a Stocks and Shares ISA with Unity Mutual.

*Capital at risk. Terms and conditions apply.