What is the average return on a stocks and shares ISA? – The Motley Fool UK https://staging.www.fool.co.uk The Motley Fool UK: Share Tips, Investing and Stock Market News Tue, 19 Aug 2025 17:22:21 +0000 en-GB hourly 1 https://wordpress.org/?v=6.9.4 https://staging.www.fool.co.uk/wp-content/uploads/2020/06/cropped-cap-icon-freesite-32x32.png What is the average return on a stocks and shares ISA? – The Motley Fool UK https://staging.www.fool.co.uk 32 32 What is the average return on a stocks and shares ISA? https://staging.www.fool.co.uk/personal-finance/share-dealing/guides/what-is-the-average-return-on-a-stocks-and-shares-isa/ Fri, 09 Jul 2021 09:10:42 +0000 https://fool.co.uk/personal-finance/?p=8453

It’s well known that a stocks and shares ISA can provide a tax-efficient way to invest your money. But have you ever wondered what the average return on a stocks and shares ISA is? Let’s take a look at how investments held in a stocks and shares ISA have performed historically.

What is a stocks and shares ISA?

Let’s start by clarifying what a stocks and shares ISA is.

Simply put, it’s a tax wrapper that can be put around a wide range of different investment products. These products include individual stocks and shares, unit trusts, investment trusts and corporate and government bonds. Any investment growth or income earned in a stocks and shares ISA is tax free.

Currently, you can save up to £20,000 each tax year in an ISA. This is known as the ISA allowance. The allowance can be shared around different types of ISAs, but not two of the same type.

[KevelPitch adtype=4578]

What is the average return on a stocks and shares ISA?

The performance of any investment will depend on your investment strategy and the exact investments you hold.

The most recent data available – for the tax year 2020/2021 – showed the average stocks and shares ISA returned 13.55%.

However, the previous year – when the Covid-19 pandemic hit with a vengeance – average returns were far worse. Investors lost an average of 13.3% in the 2019/2020 tax year.1

Tax yearAverage return on a stocks and shares ISAAverage return on a cash ISA
2020/202113.55%0.63%
2019/2020-13.33%1.18%
2018/20194.04%~1.1%

Generally speaking, stocks and shares ISAs have historically performed well. The average annual rate of return for stocks and shares ISAs over the past 10 years is 9.64%.2

Is it worth getting a Stocks and Shares ISA?

It’s hard to say whether a stocks and shares ISA is worth it for everyone. Money put into a stocks and shares ISA is invested. As with all investing, there is the risk of getting back less than you put in.

However, stocks and shares ISAs offer the possibility of higher returns on your money. This is especially true if you take a long-term approach.

Although a savings account or even a cash ISA may appear to be a safer option, rising living costs may erode the value of your savings pot if the rate of inflation exceeds the rate of interest you are earning.

What risks should you be aware of?

As with all investing, there are risks involved in having a stocks and shares ISA.

Stock markets may go up and down in the short term, but over the long term, they traditionally have an upward bias. If you are patient, you will likely see a positive return.

That said, if you know you will need your cash in the short term, say the next two to three years, then a cash ISA might be the better option.

It’s important to note that you don’t necessarily have to choose between a cash ISA and a stocks and shares ISA. You can have both – you just can’t deposit more than £20,000 across both of the ISAs in a single tax year.

Which provider should you choose for the biggest returns?

There is no one ‘best’ provider. People will find different providers are right for them, depending on their own unique circumstances.

You can also change your mind and transfer your ISA at any time without losing your benefits.

When choosing a stocks and shares ISA, consider factors such as:

  • Fees
  • Selection of investments available
  • Availability of research tools
  • Customer service

Keep in mind that the best stocks and shares ISA is one that you can afford and that comes with features that align with your goals, preferences and investing strategy. To help you make a good choice, take a look at our list of featured stocks and shares ISAs in the UK.

Good for long-term, cost-conscious investors who want lots of flexibility

Interactive Investor Stocks and Shares ISA *

Interactive Investor Stocks and Shares ISA *
Apply Now On Interactive Investor’s secure website
Risk Warning Investments are complex and involve various risks, and you may get back less than you put in. Tax benefits depend on individual circumstances and tax rules, which could change.

The value of your investments can go down as well as up and you may not get back all the money you put in. All investments carry a varying degree of risk and it’s necessary for you to understand the nature of these risks. You should consider whether you understand how Stocks and Shares ISAs and Robo-Investing products work and whether you can afford to take the risk of losing money. Remember that taxes can be complicated and the tax benefits of these products depends on your personal circumstances. Tax rules are subject to change. The Motley Fool believes in building wealth through long-term investing and so we do not promote or encourage high-risk activities including day trading, CFDs, spread betting, cryptocurrencies, and forex. Click here to learn more
Trading Commission

From £5.99‡
Account Management Fee

From £4.99†
  • Pros & Cons
  • Fees & Charges

Pros

  • Low dealing costs
  • Flat-rate platform fee structure
  • Inclusive free trades with some plans

Cons

  • No dealing fee discount for frequent trading
  • Some plans can be expensive for smaller portfolios
  • Limited trading tools

Interactive Investor offers three different subscription plans – these are easy to switch between at a later date, should circumstances change.

Investor Essentials plan

Platform Fees:†

Monthly subscription fee: £4.99

Equities custody charge: covered by subscription fee

Fund management charge: covered by subscription fee

Note: the ‘Investor Essentials’ plan has a £30,000 investment limit; if this is exceeded the account will automatically be upgraded to the ‘Investor’ plan.

Dealing Fees‡:

UK shares & ETFs: £5.99

US shares: £5.99

Other international shares: £19.99

Fund trades: £5.99

Investor plan

Platform Fees:†

Monthly subscription fee: £9.99

Equities custody charge: covered by subscription fee

Fund management charge: covered by subscription fee

Dealing Fees‡:

A monthly dealing credit, worth £5.99, is included as part of the account subscription and is valid for 31 days. (Equivalent to 1 free trade per month).

Additional trades are charged as follows:

UK shares & ETFs: £5.99

US shares: £5.99

Other international shares: £19.99

Fund trades: £5.99

Super Investor plan

Platform Fees:†

Monthly subscription fee: £19.99

Equities custody charge: covered by subscription fee

Fund management charge: covered by subscription fee

Dealing Fees‡:

A monthly dealing credit, worth £7.99, is included as part of the account subscription and is valid for 31 days. (Equivalent to 2 free trades per month).

Additional trades are charged as follows:

UK shares & ETFs: £3.99

US shares: £5.99

Other international shares: £5.99

Fund trades: £3.99

Applicable to all plans

Regular investing service: free to use (£25 minimum investment amount, no dealing fees)

Spot + FX fees: 1.5%

Telephone dealing charge: £49

Note: For UK and US trades over £100,000, and other International share trades over £25,000 additional fees and charges apply. (See the Interactive Investor website for full details.)

* This is an offer from one of our affiliate partners. For more information on why and how we work with partners, click here.

Finally, remember that past returns are not a guarantee of future results. Given the risk involved with investing in general, make sure you do your research before you part with your cash and seek independent financial advice if you need it.

[KevelPitch adtype=151]

Sources

  1. “Would you be better off with a stocks and shares ISA over cash ISA?” – Moneyfacts.co.uk
  2. “Cash ISA vs Stocks and Shares ISA: A 10-year study” – Moneyfarm.com

The content in this article is provided for information purposes only. It is not intended to be, nor does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Passive income stocks: our picks

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

* Returns as of 2/20/25

More reading

]]>