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Self-Select ISAs: Keep Your Investments in Your Hands!

Moneymagpie Team 1st Feb 2022 No Comments

Reading Time: 5 minutes

Interest rates are shockingly low. Your cash ISA may offer a measly 2% or so – IF you’re willing to lock your money away for a fixed term (and that doesn’t take into account inflation, either).

Stocks and shares are the best way to generate an income and grow your wealth with a long-term strategy. Even at a modest return of 5%, you’re beating most savings accounts on offer. We’ve written an in-depth guide about equities ISAs here.

Most people choose a ‘ready-wrapped’ equities ISA when they’re starting out with investing. It’s easy to handle control over to fund managers or robo-advisers while you’re learning the investment ropes.

But if you want more control over your investments, it’s time to think about a self-select ISA product instead.


What are self-select ISAs?

A self-select ISA is a type of stocks and shares ISA. This means that instead of putting your money into a cash account, earning interest, you can earn returns from the stock market.

These are designed for experienced and confident investors. The difference between a standard stocks and shares ISA and a self-select ISA is that you pick and buy the underlying investments yourself, instead of relying on a fund manager.

So, you can back individual shares, giving you complete control over your investments, whilst still benefiting from the tax-free status.


What can you put in a self-select ISA?

Here is a list of the various investments you can put into a self-select ISA:

  • Individual stocks and shares
  • Unit trusts and open-ended investment companies (OEICs)
  • Investment trusts
  • Exchange traded funds (ETFs) exchange traded commodities
  • Gilts (government bonds)
  • Corporate bonds
  • Employee shares that you’ve already held for 90 days or mo

You can buy shares from any listed exchange (so you’re not restricted to the FTSE), and corporate bonds on UK and approved Eurozone exchanges. The only limitation is that international shares must be approved by the Financial Conduct Authority (FCA). The good news, though, is that almost all self-select ISA providers will pre-screen shares for this – so you’ll only be able to buy from appropriate stocks and indexes.

Bear in mind that some self-select ISA platforms haven’t got access to all the investment types you may want. For example, Fidelity offers access to over 2,500 investments, while Vanguard offers only 76 funds at time of writing.

How much does a self-select ISA cost?

Doing your own investments may seem like the cheapest route – but there are still fees. While these fees are typically lower than using a managed fund equities ISA, you may pay more if you’re a very frequent trader.

When looking for the best self-select ISA platform to suit you, make sure you tally up the following fees to find out which one really offers the best deal:

The annual administration fee

Sometimes charged as a flat fee, it can also be a percentage of your total fund.

For example, the Hargreaves Lansdown self-select ISA product charges a fee of 0.45% each year – while Halifax charge a set £12.50 fee instead.

The dealing charge

This is a fee paid on your trades. Each time you buy or sell a share or fund, you may have to pay a flat fee or percentage of the total trade value.

If you’re a frequent trader, the rates will be reduced on most accounts. So, if you’re planning on making several trades a month, check out the ‘frequent trader’ fees instead of the basic one when you’re working out which platform suits you best.

Using our examples above, Halifax charges £12.50 per trade, or £2 for scheduled regular investments. Hargreaves Lansdown offers a £11.95 fee for share deals – but you can trade funds for free.

Other platforms offer different prices depending on the investment type. For example, AJ Bell YouInvest costs as little as £1.50 to trade – up to £9.95.

If you want to trade larger sums, a flat-fee basis often works out more budget-friendly than a percentage. However, if you’re not going to trade frequently, a percentage basis may suit you better.

As you can see from the examples above, fees are drastically reduced if you set up a regular investment. This can be from as little as £25 a month on a direct debit from your main bank account. It means you can continue to save and invest, without paying the larger deal fees (for example, compare AJ Bell’s £9.95 deal fee to the regular £1.50 fee).

Transfer Fees

Your provider may charge you to transfer money from your existing ISA to your new stocks and shares ISA.

You could also face fees to transfer out to another investment product or to close the account.

Reinvestment and inactivity fees

While you might love to be hands-off on your investments in a ‘set and forget’ style, this could cost you. Making a trade every few months should avoid inactivity fees (but, of course, may incur a deal fee).
You can also choose to automatically reinvest profit from share dividends back into your funds. The deal fee here is much lower, typically no more than £2, working out cheaper than manual reinvestment (which means standard deal fees). However, reinvestment might not be your thing if you want to further diversify your portfolio into other funds or receive an income from your dividends.


How can I get a self-select ISA?

There are lots of providers that offer a self-select ISA product, so it’s best to shop around.
High street banks, such as Barclays and Halifax, offer self-select ISA products – but if you’re confident with online banking and trading, it’s worth looking at other investment platforms, too.
Popular self-select ISA providers include:

Remember that you can only open one of each type of ISA in every tax year. Make sure you do plenty of research before choosing your self-select ISAs, as it could cost you if you decide to switch and transfer your funds and shares to a new platform later on!

Should I get a self-select ISA?


We’ll reiterate the most important thing here: self-select ISAs are only for confident investors.
If you are new to investing, you may be more suited to a managed fund or ‘ready-wrapped’ ISA product. The fees may be slightly higher, but it’s worth it if you’re still getting the hang of the stock market.

You’ve got £20,000 every year to invest in your ISAs. You can hold cash, equities, lifetime, and innovative finance ISAs – but the same £20,000 must be split between them. You don’t get a new £20,000 allowance for each ISA!

All income and capital gains from an ISA are tax-free. Unlike interest rates on a cash ISA, the long-term returns from an equities ISA are likely to provide you with a tidy profit. However, you do need to take into account fund management, trade, and inactivity fees when working out your returns.

Self-select ISAs are ideal if you want more control over your investments. You can pick and choose exactly which funds, indexes, and shares you want to put your money into – you’re not restricted by a ‘ready-wrapped’ limited package.

If you’re still umming and ahhing about whether a self-select ISA is for you, read up about other stocks and shares ISA types to see if those might suit you better!

*This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.

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Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

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