Apologies if this question has been asked elsewhere. I live in the UK and earn a decent salary. I have never invested in shares or stocks, or bought a government bond. But I have recently started updating my finance and economic knowledge, and would like to start investing.

I am sure this is a common question, but how do I go about investing my money in stocks and shares in the UK? Is it safe to invest in government bonds? Should I invest via a broker? Any advice or pointers are greatly appreciated.

  • I had that exact same question about a year ago - although your situation may be a little different since you are in the UK. Link to the question - money.stackexchange.com/questions/1625/…
    – Eric
    Commented Mar 27, 2012 at 21:07
  • Anup - I think your question as stated is pretty much like Eric's note. Also - you task multiple questions. Suggest you edit this to make it much more specific, and not overlapping with that one (or merely close this if that one answers your questions)
    – sdg
    Commented Mar 28, 2012 at 0:30
  • Thanks Eric, @sdg! I did read the responses to Eric's question but they are all applicable to a person based in the US. I was hoping to get a more UK-specific answer to my question.
    – Anup
    Commented Mar 29, 2012 at 7:46
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    you should consider a (tax-free) stocks and shares ISA.
    – Ronald
    Commented Apr 7, 2012 at 20:57
  • I agree with Ronald, if you havent yet maxed out your ISA, then its a no-brainer. You get excellent tax rebates and its silly not to take advantage of these before considering self investing in shares.
    – carpii
    Commented Jun 17, 2012 at 2:47

6 Answers 6


I'd go to specialist community web sites such as The Motley Fool and read their investing articles, and their forums, and everything. You cannot get enough information and advice to get going, as it is really easy to think investing is easy and returns are guaranteed. A lot of people found that out in 2008 and 2000!

For example, they have a 'beginners portfolio' that will teach you the very basics of investing (though not necessarily what to invest in)

  • Please not, the Motley Fool is no longer what it was. The community that used to live there moved to The Lemon Fool a while back to form a friendly community based discussion group like TMF used to have.
    – gbjbaanb
    Commented Jan 23, 2018 at 16:32

Before jumping into stock trading, do try Mutual Funds and Index funds, That should give you some good overview of the equity markets.

Further, do read up on building a balanced portfolio to suit your need and risk apetite. This would help you decide on Govt. bonds and other debt instruments.

  • No such thing as a mutual fund in the UK
    – Pepone
    Commented Sep 5, 2015 at 19:01

a) Go to Money super market and compare all the share dealing accounts and choose one to your liking.

b) That depends on one's own circumstances. Nobody can be give you any specific strategies without knowing your financial situation, goals and risk averseness.

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    Nobody can be give you any specific strategies even knowing your financial situation, goals and risk averseness which can give you a optimal return. Current economic situation forbids any sort of optimism in stock market. At the end of the day, even with some gains, you may not have substantial risk. Facebook is down 30% on listing. What a loss... Commented Jun 12, 2012 at 8:12
  • @NatwarLath - Not necessarily true. Other than that, optimum portfolio is difficult, but making money is possible.
    – DumbCoder
    Commented Jun 12, 2012 at 8:21

If you havent yet maxed out your ISA, then its a no-brainer. You get excellent tax rebates and its silly not to take advantage of these before considering self investing in shares.

Note that even if your ISA is maxed out, the economic turbulence means that investing in individual stocks is an intimidating place for beginners right now.

The FSA is also looking at revising the average percentages used for pension, from 7% for adventurous investments, down to 5% or 6%, so there is industry wide recognition that on average the stock market is going to be a little less lucrative than it was a few years ago. Thats not to say you cant still make a whopping profit, but the chances of you doing so as a first time investor are remote to say the least.

My advice would be to look seriously into some of the social lending sites, where you can still easily get a 7% return with minimal risk. Whilst I do have a portfolio which is performing well overall (I am a very speculative investor), I am moving a lot of funds into Zopa.com, as I am averaging 7% return with a lot less time, effort and risk than the stockmarket.

Whatever you decide, I think its time you thought about consulting an IFA. They can help you understand what sort of risk you are willing to tolerate, which is a very important aspect of investing.


Most investors should not be in individual stocks. The market, however you measure it, can rise, yet some stocks will fall for whatever reason. The diversification needed is to have a number of shares of different stocks, and that a bit higher than most investors are able to invest and certainly not one starting out. I suggest you look at either mutual funds or ETFs, and keep studying. (I'm told I should have offered the UK equivalent Investment Trusts , OEIC, or Unit Trusts)

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    Even more strongly, most beginning investors should not have a brokerage account and invest in mutual funds through the brokerage. My recommendation is that beginners stick to index mutual funds in which they can invest directly on the fund's website rather invest in the corresponding ETFs until they are more knowledgeable about markets. This also avoids the temptation of setting up a brokerage account from the get go and doing everything through the brokerage. Commented Jun 13, 2012 at 2:04
  • Dilip - to add to your point, ETFs can be expensive if trading costs apply. The low cost index mutual fund is the lower cost option for the new investor. Commented Jun 13, 2012 at 4:45
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    @Pepone FSE 100 is 20% commodities? Do you have a reference for this amazing factoid? Do you understand the difference between the shares of a large agricultural firm that deals with commodities and commodity futures as part of its business operations, and the commodities and commodity futures themselves? Commented Sep 6, 2015 at 2:04
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    @Pepone .... and there you go. You do not understand the difference between having shares in a company that trades in and supplies commodities and the commodities themselves. If the FTSE 100 is unbalanced (in the sense that the Dow Jones Industrial Average (DJIA) of dirty industrials is unbalanced), there is the FTSE 350 of the top 350 companies or the FTSE All-Share Index of the top 1000 companies, and funds that track these indices. Commented Sep 6, 2015 at 13:43
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    @Pepone No, I do not agree with you. It is you who brought up FTSE 100 and the claim that it is unbalanced because it has commodities in it. I have not looked into the FTSE 100 and do not know whether it is unbalanced or not. All I am disputing is your nonsensical assertion that the FTSE 100 has commodities in it (completely false) and that the FTSE 100 is unbalanced because of these commodities. Commented Sep 6, 2015 at 16:29

I'm in the US as well, but some basic things are still the same. You need to trade through a broker, but the need for a full service broker is no longer necessary. You may be able to get by with a web based brokerage that charges less fees. If you are nervous, look for a big name, and avoid a fly by night company. Stick with non-exotic investments. don't do options, or futures or Forex. You may even want to skip shares all together and see if UK offers something akin to an index fund which tracks broad markets (like the whole of the FTSE 100 or the S&P 500) as a whole.

  • I won't downvote this answer but I think it gives bad advice when it recommends using a broker. A beginner should stick to one or two index funds (even if they are with different companies) and invest in them directly on the funds' websites rather than through a brokerage. The advantages of "having all my investments appear on one screen where I can manage them all" are vastly over-rated, and in fact, many fund web sites will also allow links to outside investments so that all the financial information can appear on one screen to gloat or weep over. Commented Jun 13, 2012 at 2:21
  • Our answers are pretty similar. I also suggested investing in an index fund. In which case, I agree, you should invest directly with the company. I was trying to answer the original poster's broader question which was 'how do I go about investing in stocks and shares' The answer is through a broker, however, you may want to consider an index fund instead.
    – chrisfs
    Commented Jun 13, 2012 at 6:51
  • @DilipSarwate not in the UK investing direct is far more expensive than via a fund supermarket
    – Pepone
    Commented Sep 5, 2015 at 19:00
  • Hmm. In the US, if I want to invest in an index fund run by Vanguard,for example, the cheapest way is to go directly to Vanguard. Any 3rd party site might add their own fees (unless Vanguard was paying them)
    – chrisfs
    Commented Sep 7, 2015 at 21:15

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