How to open a share dealing account in the UK
At some point, reading about investing stops being enough. You want to actually do it. That means opening a share dealing account. It is simpler than it sounds and takes less time than most people expect, but there are a few decisions worth making thoughtfully before you start.
What you actually need
To open an account you need four things: a device with internet access, a UK bank account, your National Insurance number, and proof of identity. Most platforms now verify your identity electronically at the point of application, cross-referencing your details against public records. In most cases there is no need to post anything. If electronic verification fails, you may be asked to supply a passport scan or utility bill, but this is increasingly rare.
The whole process typically takes between ten and twenty minutes. Your account will be confirmed by email, though it may take a day or two before it is fully active and you can place your first trade.
The first decision: ISA or dealing account?
Before you choose a broker, decide which type of account you want. This matters more than most people realise.
A Stocks and Shares ISA lets you invest up to £20,000 per tax year (the 2024/25 allowance) completely free of Income Tax on dividends and Capital Gains Tax on profits. If you are starting out and have not used your ISA allowance, this is almost always the better choice. You are not locking the money away. You can sell investments and withdraw the cash whenever you like. You simply never pay tax on the gains.
A standard dealing account has no annual contribution limit but offers no tax shelter. Any profits above your annual CGT exemption (£3,000 in 2024/25) are taxable. Dividends above the dividend allowance (£500 in 2024/25) are also subject to Income Tax.
A SIPP, or Self-Invested Personal Pension, is a third option for longer-term investors. Contributions attract income tax relief at your marginal rate, meaning a basic rate taxpayer investing £800 has £1,000 working in the market. The trade-off is that you cannot access the money until age 57, rising to 58 from 2028. For retirement planning it is a powerful vehicle, but it is not suitable if you might need the money sooner.
Choosing a broker
The UK broker landscape has changed significantly over the past twenty years. The names that dominated in the early 2000s bear little resemblance to the current market. What matters now is a different set of questions.
Charges. Most platforms charge a flat fee per trade rather than a percentage. For smaller portfolios, a low flat fee, typically £3 to £10 per trade depending on the platform, makes more sense than a percentage-based model. For regular investors who use a monthly direct debit, many platforms offer reduced or zero dealing fees on regular investments, which suits a disciplined monthly investing habit well.
Account fees. Some platforms charge an annual percentage of your portfolio value; others charge a flat annual fee. For larger portfolios, a flat fee usually wins. For smaller portfolios building up, a percentage model is often cheaper early on. Run the numbers for your likely portfolio size before committing.
Platform quality. The app or website is where you will actually spend your time. It should be straightforward to search for a company, see its price, place a trade and check your portfolio. Most major platforms now offer mobile apps that are genuinely good. Try a demo or read independent reviews before signing up.
Range of investments. If you only want to buy UK shares and a handful of index funds, almost any platform will do. If you want US stocks, international markets, ETFs, investment trusts or bonds, check the platform covers them before opening an account.
The main platforms most UK investors use today include Hargreaves Lansdown, the largest, feature-rich and slightly more expensive; AJ Bell, which offers a good range at competitive pricing; Interactive Investor, which uses a flat-fee model that suits larger portfolios; Freetrade, app-based and low-cost, suited to beginners and smaller amounts; and Vanguard, ideal if you want index funds only at very low cost. Trading 212 and Dodl are also worth noting for newer investors. None of these is a recommendation, just an honest read of the current market.
Costs you cannot avoid
When you buy UK-listed shares, you pay Stamp Duty Reserve Tax at 0.5% of the purchase value. This is collected automatically by your broker and paid to HMRC. There is no stamp duty on ETFs or funds. AIM-listed shares have historically been exempt too, though this exemption has faced political pressure in recent years and is worth checking at the time you invest.
Your broker will also charge a spread, the difference between the price at which you can buy and the price at which you can sell. This is narrower for liquid, heavily traded shares and significantly wider for smaller companies. On a thinly traded stock, the spread alone can mean you are down 10% or more before you have made a single investment decision.
Once you are in
Funding the account is straightforward. Most platforms accept faster payments from your bank, which arrive the same day. Once funded, you can search for any company listed on the London Stock Exchange, check the current price and place an order.
Two types of order matter for beginners. A market order executes immediately at the best available price. An at-quote order, sometimes called a real-time quote, shows you the exact price before you commit. For most ordinary share purchases, the at-quote approach is the better habit, as it removes any uncertainty about what you are actually paying.
You will receive a contract note by email after every trade, confirming the details. Keep these. They form the basis of any future tax calculation if you ever sell at a profit.
One thing worth knowing before you trade
Opening an account is easy. Knowing what to buy is harder. The temptation, especially for new investors, is to act quickly once the account is funded. The discipline is to not do that. Spend the first few weeks watching prices, reading company news, understanding what you are looking at. The account will still be there when you are ready.
Nothing in this article is financial advice. Tax rules change frequently. Check the current ISA allowance, CGT exemption and SIPP rules on HMRC’s website or consult a financial adviser for your specific situation.
Money & Markets is a guide to personal finance and investing for people who want to understand the world they live in, updated as rules and markets change.
This article is for informational purposes only and does not constitute financial advice. Investment values can go down as well as up. Always do your own research before making any financial decisions.