To ISA or not to ISA, that is the question

Hi all,

Well it’s that time of year and I have a decision to make today but I’m interested in other peoples views just to help form my own. I’m pretty sure the choice will seem quite obvious but le

I currently have a SIPP and LISA with the AJ Bell platform which is a great platform for people with smaller portfolios and savings.

I have 2 choices in regards to my stocks and shares ISA for 2020 / 2021

  1. Open a S&S ISA with AJ Bell for a greater variety of funds/stocks/trusts (at a cost) and use a basic account on Freetrade for additional investments

  2. Open a S&S ISA with Freetrade and carry out all investments on the platform commission free but have less stocks, shares and funds to choose from

In both scenarios I will not exceed the £20,000 limit, in fact, it’s likely I will only accumulate approx £12,000 into the ISA over the course of the coming financial year. Also, other than OEIC funds, I don’t think I’m truly missing out on much just sticking with Freetrade.

In fact, I’d love to bring my SIPP and LISA over to Freetrade at some point.

So I’m leaning towards option 2, does anyone think I should go with option 1? If so, why??
e.g. in both scenarios I will not exceed the capital gains threshold (with or without an ISA on Freetrade).

P.s. I’m following a dividend growth strategy to get the best of both worlds


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I’ve recently closed all my general investing accounts. It’s just a tax headache that I do not want.
My personal choice is that ISA’s are always the way to go even if your investing small amounts initially. Everyone plans to grow and compound their investments to a large amount.
I’ve gone for a Freetrade ISA as it’s only going to get better with more choice. It’s my long term platform of choice :ok_hand:t3:


Which ever one best meets your needs.

Freetrade would be £36 a year, if both are offering you what funds and shares you want it’s just a case of what’s cheaper to run.

Hi Mani,

The AJ Bell S&S ISA would cost you a custody charge of £30 for your first year ( £12,000 x 0.25%) + £9.95 per trade for stocks and ETF (£1.50 per fund trade).

Freetrade would be £36 flat rate per year for fees and no charge for trades.
As you said you would not exceed the capital gains threshold would a Freetrade general account not be better?

Money wise after 1 stock trade Freetrade would be better value.

Hi @Rust,

Thanks for the breakdown, I think everything is pointing to Freetrade as the option to go for. As I mentioned in my original post, I’d also like to move my SIPP and LISA over when Freetrade make these available (to save on cost as you’ve pointed out).

In regards to your general account point… I thought the same but I discovered that you cannot move your portfolio into an ISA at a later date should you happen to exceed the capital gains threshold in the future. This means I’d have to sell everything and re-purchase in the ISA account which just sounds like a massive waste of time! So that is why, despite being well within the capital gains boundaries, I’ll start and continue my investment journey with Freetrade using their ISA. Does that make sense? or is there still reason to stick to the general account? :thinking:

I agree with you about having to sell your shares in a general account and then rebuying in the ISA that it may be better to just start in the ISA, not just because of the potential of capital gains but if you reach that amount of investments it would likely mean using an entire years ISA allowance to transfer (I do not think you are allowed to claim for previous years allowances).

That’s a really good point.

If I understand you correctly, what you’re saying is when the time comes suppose I could transfer into the ISA at a later date, I’ll end up using most if not all of that years allowance just with the transfer. Good shout!

Well, that settles it… An S&S ISA with Freetrade it is… I’ve missed the market today so it’ll be a fresh start on Monday :grin: :+1:


I searched a good few isa related topics and just went with this one.

My question is what is this part of the freetrade isa cost “Transfer out - US stock £17 per holding”

My second question is will there ever be a time I actully use up 20k year Allowences. Would this be say dividents + my yearly contributions for example?

My. New goal and plan is to have a 100k portfolio in 8 to 10 years max. It really bugs me that it took me to my 30s to see u should of been investing a long time ago.

I also think it starts with the parents as well if they knew about finance and started an account for you earily then Holy stock lords you would have such an advantage, this combined with being a strict saver and really getting 1 million pound portfolio isn’t out of reach.

This is just a calculation from your average job and my current life style, if I had a decent job or any sort of offshore etc type job getting to 1 million reslly would be a peice of cake for me.

The magic of compounding but also you do save the majority of that cash the compounding just goes nuts after 100k.

Dividend income isnt included in your 20k allowance if its paid into your ISA from its stocks.

I only opened my ISA at 44. This past February.

I intend on having at least a 100k portfolio by the time I retire (60-65) to supplement my private pension and bridge the gap to state pension age.

That is with monthly contributions from my salary only…i have no capital to dump in and a modest income.

But yes, would have been nice to have a nest egg and investment savvy parents, but thats not most people…kinda nice to do it all on your own anyway :grin:


Ahh I never knew that so like the max I can ever add to an isa would be £9,600 a year at best. I just never knew if/when I could ever hit the 20k limit or will i never hit it then it seems?

Yes the dreams of looking back is just me doing my little calculations lol.

So do you know what this 17 pounds fee is about is this to sell each uda stock inside a isa? Or is thst the charge to transfer from one isa to another and each usa stock is charged?

Definitely dividends from the ISA arent part of the 20k

The £17 , I would assume, like you have, its an in specie transfer charge to another provider.

I have sold US stocks within the ISA with no such charge, so can only assume thats what it means…transferring out.

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Sweet, so really you need to actully have a wage that allows you to save 20k away in cash into an isa per year? If not you needn’t worry?

I say this because I didn’t know if things stack and one day I might put extra into a sipp but if I will never reach the 20k target then I guess…


Yes, the 20k has to come from you. So out of reach for us types :rofl: unless you win the lottery or something


@Kiava @Bob1 don’t give up faith of reaching the 20k limit just because you may not be able to reach the limit today you might be able to reach it in thefuture through payrises, side hustle, other sources, etc.


Hey @Kiava ,

I think the others below have clarified these points, but wanted to jump in to help too.

The £17/holding transfer out fee is a fee that’s applied by the US central securities depository when administering in specie transfers between accounts. We just pass along this fee rather and aren’t making anything in addition.

On your annual ISA allowance, the £20K figure solely includes contributions you make (as others have pointed out). Any dividends that are paid into your ISA are (typically) free of taxes. The exception here can be foreign company dividends where there is a withholding tax charged at source.

The fact that you’ve started now is great. The best time to have started investing is a decade or two ago, the second best time is today :grinning:

Considering the risks involved with investing, it often makes sense for people to wait until they’re a bit older and have settled into their careers before starting to set money aside that they won’t touch for years at a time.



Thanks for chiping in and giving me a lengthy responce and clearing out some questions I had asked.

I"m glad at least I choose the second best time to invest haha, yes I do get that it’s risky etc but it doesn’t haven’t to be I mean flinging cash in the all world all those years lower returns but less risky.

At that age though it’s party time etc most aren’t thinking oh yes I think I’ll put money in the stock market, just if we had done or had the right guidence then to even split some, life wouldn’t be as hard later on in our life’s, buying houses would be easier, retiring earily could happen etc, zero studant loans left but it is what it is hehe.

Better late than never and most solo people only take a liking to their finannces when they hit 30 it must be the magic number, hehe.