Fees
A Stocks & Shares ISA is a tax-efficient “wrapper” that lets you invest in things like funds, ETFs and shares without paying UK tax on the growth or income inside it. It’s not an investment itself – it’s a tax-free container you put investments into, up to an annual limit set by the government.
Invest inside a Stocks & Shares ISA and you don’t pay UK income tax or capital gains tax on what it earns/grows by.
Each tax year you can pay in up to the government’s ISA allowance — £20,000 for the 2026/2027 tax year. The allowance covers all your ISAs combined, and it resets each 6 April. Unused allowance doesn’t carry over – use it, or lose it.
Heads-up: new rules from 6 April 2027. The government has announced ISA reforms. From this date, a 22% charge will apply to the interest earned on cash left uninvested inside a Stocks & Shares ISA – your ISA manager pays it to HMRC, so you don’t need to declare it. It’s designed to discourage holding large cash balances in an investment ISA rather than investing them.
Because SCM Direct invests your money in a diversified ETF portfolio rather than leaving it in cash, this charge does not affect the invested holdings. It doesn’t change the core tax benefits of a Stocks & Shares ISA. Tax rules and allowances can change, and how they affect you depends on your circumstances.
(Sources: GOV.UK “ISA reform 2027 — anti-circumvention rules factsheet”; HM Treasury fiscal-event materials.)
A Cash ISA protects your capital but tends to only grow slowly. A Stocks & Shares ISA aims for more growth over time, with the risk that values can fall. Many people use both for different goals.
| Stocks & Shares ISA | Cash ISA | |
| What’s inside | Investments (funds, ETFs, shares) | Savings (interest) |
| Potential return | Higher over the long term (not guaranteed) | Lower, more predictable |
| Risk to capital | Yes — value can fall | No (cash) |
| Best suited to | Money invested for the longer term (5+ years) | Shorter-term savings |
It generally suits people investing for the medium- to long-term who are comfortable with values rising and falling along the way. If you might need the money within a year or two, cash may be more appropriate. If you’re unsure, consider regulated advice.
SCM Direct offers a Stocks & Shares ISA invested in a discretionary, ETF-based portfolio matched to your risk profile, at a typical 0.85% Total Annual Cost, with a £10,000 minimum, and the option to add £200+ per month.
You complete a short risk questionnaire, choose a portfolio, and SCM manages the investments for you.
Capital at risk. Unlike a Cash ISA, the value of a Stocks & Shares ISA can go down as well as up, and you may get back less than you invest. Tax treatment depends on your circumstances and may change.
You pay no UK capital gains tax on profits and no further UK income tax on income earned inside the ISA. Tax treatment depends on your circumstances and may change.
Up to the annual ISA allowance — £20,000 for 2026/2027 — across all your ISAs combined.
Yes. Unlike a Cash ISA, the investments can fall in value, so you could get back less than you put in.
Yes – you can pay into different types of ISA in the same tax year, as long as your total stays within the allowances.
Yes. You can transfer an ISA from another provider without losing its tax-free status. (How to transfer an ISA to SCM Direct)
Investments such as funds, ETFs and shares. SCM Direct holds diversified, ETF-based portfolios.
