How to buy shares: a beginner's guide
Buying shares in the UK has never been more accessible, with commission-free platforms and ISA wrappers that can shelter gains from tax. This guide covers everything a first-time share buyer needs to know to get started.
What does it mean to buy shares?
When you buy a share, you purchase a small ownership stake in a company. If the company grows in value, your shares increase in value too. Many companies also pay dividends, distributing a portion of their profits to shareholders as regular cash payments. Shares can be bought and sold on stock exchanges during market hours, providing the liquidity that other investments like property or private equity cannot offer.
Buying shares is also sometimes called investing in the stock market, buying stocks, or equity investing. These terms are largely interchangeable in the UK context. Understanding the basics of investing for beginners gives useful context before diving into the mechanics of how to buy.
Key Takeaway
For most beginners, the most important first decision is the account type. Investing through a stocks and shares ISA rather than a general investment account means you will never pay UK capital gains tax or income tax on returns within that wrapper, compounding significantly over time.
Choosing the right account
Before buying shares, you need to decide which type of account to use. The main options are:
Stocks and shares ISA
All gains and income are currently sheltered from UK tax, within the £20,000 annual allowance. The most tax-efficient option for most UK investors. A cash ISA vs stocks and shares ISA comparison helps clarify which is right for different circumstances.
Share dealing account
A general investment account has no annual contribution limit. Returns above the CGT allowance (£3,000 in 2026/27) and dividend allowance (£500) are taxable. The appropriate choice for amounts above the £20,000 ISA limit or assets not eligible for an ISA.
SIPP
A self-invested personal pension is designed for long-term retirement saving. Contributions attract tax relief of up to 45%, and investments grow free from UK tax within the pension wrapper. Funds are inaccessible until at least age 57 (rising to 58 in 2028).
How to buy shares: step-by-step
- Open an account. Open a stocks and shares ISA or share dealing account online. You will need to verify your identity and link a UK bank account for deposits and withdrawals.
- Fund your account. Transfer money from your bank account. You can start with as little as you are comfortable with, though very small individual trades are less cost-efficient on a percentage basis.
- Research the shares you want to buy. Search for a company by name or ticker symbol. Review its recent results, analyst ratings, valuation metrics and upcoming catalysts. Our guide on how to invest in stocks covers the analytical approach in detail.
- Place an order. Select the number of shares or the monetary amount you want to invest. Choose your order type: a market order executes immediately at the current available price; a limit order only executes if the price reaches your specified level.
- Monitor and review. Review your positions periodically rather than checking daily. Set price alerts if you want to be notified of significant moves.
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What types of shares can you buy?
The UK market offers access to many different types of share, each with different characteristics:
| Share type | Description | Example |
| Ordinary shares | Standard company shares giving proportional ownership, dividend rights and voting at AGMs | Barclays (LSE: BARC) or Apple (NASDAQ: AAPL) |
| Preference shares | Fixed dividend with priority over ordinary shareholders in a wind-up, but typically no voting rights | Lloyds Banking Group 9.25% preference shares |
| ETFs | Exchange-traded funds holding a basket of shares in a single trade. ISA-eligible | iShares Core FTSE 100 UCITS ETF (ISF) |
| Investment trusts | Closed-ended funds listed on the stock exchange holding shares, property or other assets | Scottish Mortgage Investment Trust (SMT) |
Preference shares sit between ordinary shares and bonds in terms of risk and return. Preference shares carry a fixed dividend and rank ahead of ordinary shareholders if the company is wound up, but typically carry no voting rights.
Beyond traditional equities, investors can also access cryptocurrency shares, which are listed companies with significant digital asset exposure. These carry specific risks linked to the digital asset market and require a different risk assessment than traditional equity investments.
Understanding the costs of buying shares
For investors looking to understand how different assets are taxed, the tax-efficient investing guide covers ISAs, SIPPs, gilts and other tax-efficient approaches in detail.
| Cost | What it is | Our rate |
| Dealing commission | Fee for executing the trade | £0 on US stocks; competitive rates on UK and international shares |
| Stamp duty (SDRT) | 0.5% tax on purchases of UK shares electronically | Applied automatically; not charged on ETFs or non-UK shares |
| FX conversion fee | Charge for converting GBP to buy foreign currency shares | 0.7% on non-sterling stocks |
| Platform/custody fee | Annual fee for holding investments | No platform fee on our share dealing account |
Quick fact
UK gilts are exempt from capital gains tax under Section 115 of the Taxation of Chargeable Gains Act 1992.
Risks of buying shares
- Market risk: share prices can fall significantly in short periods. The S&P 500 experienced a significant intra-year correction in April 2026 before recovering strongly.
- Company-specific risk: individual stocks can fall much more than the broader market if a company delivers bad results or enters financial difficulty. Diversification through funds or ETFs reduces this risk.
- Liquidity risk: very small-cap or penny stocks can be difficult to sell quickly at a fair price. Listed companies with reasonable trading volumes are easier to exit.
- Behavioural risk: buying at market peaks and selling during crashes is the most common mistake. A regular investment strategy reduces emotional decision-making.
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Buying shares FAQs
How much money do I need to buy shares?
You can start with as little as the price of a single share. A practical starting point for a meaningful portfolio is typically £500 to £1,000, though regular monthly contributions are often more important than the initial amount.
Is it better to buy shares directly or through an ETF?
For most beginners, a low-cost ETF is a better starting point than individual stock picking. ETFs provide instant diversification and do not require detailed research into individual companies. Individual stocks suit investors who have the time and knowledge to research specific companies.
Can I buy shares in an ISA?
Yes. Most UK and internationally listed shares are ISA-eligible, as are ETFs and investment trusts. Holding shares in a stocks and shares ISA means all capital gains and dividend income are sheltered from UK tax permanently, within the £20,000 annual allowance.
What is the difference between buying shares and spread betting or CFDs?
When you buy shares, you own a real stake in the company and benefit from the full return over time. Spread bets and CFDs are leveraged instruments where you speculate on price movements without owning the shares. Both carry significantly higher risk and are not suitable for long-term investing.
How do I know if a stockbroker is safe to use?
Any platform used to buy shares in the UK must be authorised and regulated by the FCA. Check the FCA Register before opening an account. FSCS protection covers eligible claims up to £85,000 per person if the platform becomes insolvent.
Important to know
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Professional clients trading spread bets and CFDs can lose more than they deposit.
The value of shares, ETFs and other ETPs bought through a share dealing account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results. Some ETPs carry additional risks depending on how they’re structured, investors should ensure they familiarise themselves with the differences before investing.
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Share dealing and IG Smart Portfolio accounts provided by IG Trading and Investments Ltd, CFD accounts are provided by IG Markets Ltd, spread betting provided by IG Index Ltd, cryptoassets services are provided by IG Digital Assets Ltd.
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