Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
How and Where to Buy Penny Stocks in the UK 2025
Ruby Layram
19th Mar 2025
Penny stocks are low-cost stocks that allow investors to get involved with small companies without needing a large amount of initial capital. Some investors see them as an exciting way to make big profits quickly, while others warn of their high risks.
But if you’re keen to explore this corner of the stock market, you’re in the right place. This guide will break down how to buy penny stocks, where to buy penny stocks, and what you need to know before you get started.
New to investing: Read our complete guide to how to invest in stocks before you carry on!
What Are Penny Stocks?
Before we get into how to invest in penny stocks, let’s clarify what they are. In the UK, penny stocks are typically shares of small companies trading for less than £1 per share.
They’re often found on the Alternative Investment Market (AIM) rather than the London Stock Exchange. These stocks tend to be highly volatile but can offer significant returns if you pick the right ones.
Should I Buy Penny Stocks?
A fair question! Penny stocks can be tempting because of their low prices and the potential for massive gains. However, they come with risks:
- High volatility: Prices can swing wildly, meaning potential big wins but also big losses.
- Low liquidity: Some penny stocks have low trading volumes, making it harder to sell when you want.
- Lack of information: Smaller companies might not have as much publicly available data as larger firms.
If you’re new to investing, consider starting with a small amount of money that you can afford to lose.
Penny stocks should be a small part of a well-diversified portfolio rather than your main investment strategy.
How to Buy Penny Stocks in the UK
1. Choose a Stockbroker
To get started, you’ll need a brokerage account. Not all brokers offer penny stocks, so look for one that supports AIM-listed shares and small-cap stocks. Some popular platforms in the UK include:
- InvestEngine
- eToro
- XTB
- Hargreaves Lansdown
- AJ Bell
- Interactive Investor
2. Do Your Research
Penny stocks require due diligence. Since they can be risky, researching a company’s financials, management, and market potential is crucial. Some things to check:
- Company fundamentals: Look at revenue, profit margins, and debt levels.
- Industry trends: Is the company in a growing or declining market?
- News and updates: Keep an eye on press releases and financial reports.
3. Place Your Order
Once you’ve picked a stock, you can place an order through your broker. Most platforms let you choose between:
- Market orders: Buy immediately at the current price.
- Limit orders: Set a price at which you want to buy.
- Stop-loss orders: Automatically sell if the price drops below a set level to limit your losses.
4. Monitor Your Investment
Because penny stocks can be volatile, keep an eye on your investments. Set realistic goals, and don’t be afraid to take profits if a stock jumps significantly.
Where to Buy Penny Stocks in the UK
You can buy penny stocks through online stockbrokers, but not all of them offer access to AIM-listed stocks. Here are some of the best places where to buy penny stocks:
- Traditional Brokers : Platforms like Hargreaves Lansdown and AJ Bell allow access to UK penny stocks.
- Trading Apps: Newer platforms like InvestEngine and eToro make investing more accessible, though they may not support all penny stocks.
- CFD and Spread Betting Platforms: IG Markets and CMC Markets allow you to trade penny stocks using contracts for difference (CFDs), though this adds extra risk.
| Platform Name | What We Like | What We Don’t Like | Minimum Deposit |
|---|---|---|---|
| InvestEngine | The best ETF platform that offers zero commissions on stocks and shares, fully managed protfolios, and up to £4000 cashback for new ISA accounts. | Only offers ETFs, no access to cryptocurrencies | £100 |
| XTB | Zero commission on stocks and shares, invest in ready-made portfolios for passive investing, access over 6000 assets | XTB does not provide access to cryptocurrencies | £1 |
| eToro | Social trading, copy trading, free demo account, access to stocks and crypto | No pension options, high fees | $10 |
How to Buy Penny Stocks with Credit Card or PayPal
Some investors may prefer to use a credit card or digital payment method to buy stocks – this might be the case if your banking provider has limitations on investing activities that can be done through your account.
Most stockbrokers don’t allow you to buy penny stocks with a credit card directly due to regulations. However, some CFD platforms and alternative investment sites may accept credit cards.
If you want to buy penny stocks with PayPal, your best bet is to find a broker that accepts PayPal deposits, such as eToro or Plus500. Just keep in mind that trading penny stocks on these platforms is often done via CFDs rather than buying the actual shares.
Final Thoughts
Penny stocks can be a thrilling but risky way to invest. If you decide to give them a go, remember to:
- Use a reputable broker.
- Do thorough research before buying.
- Invest only what you can afford to lose.
- Consider penny stocks as part of a larger, balanced portfolio.
By following these tips, you’ll be better equipped to navigate the world of penny stocks in the UK.
Are you interested in learning more about investing? Why not sign up to the MoneyMagpie bi-weekly Investing Newsletter? It’s free and you can unsubscribe at any time if you find it isn’t for you.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
Leave a Reply