How to Buy Shares in the UK Online – 2025 Beginner’s Guide

Learning how to buy shares might seem complicated at first, but once you understand the process, it’s surprisingly straightforward.

This updated guide explains how to buy shares in the UK step by step, from opening a brokerage account to choosing the right stocks and managing your portfolio.

It also covers essential details like fees, account types, taxes, and risks so that beginners can start investing with confidence.

Before we get into the full guide, here’s a quick reminder of what shares actually are and a short overview of how to get started right away.

What are stocks and shares?

Stocks and shares represent ownership in a company. Owning them means you hold a small part of that business, giving you rights such as receiving dividends or voting on company matters.

The terms are often used interchangeably, but there’s a slight distinction: stock usually refers to ownership across multiple companies, while share means a single ownership unit in a specific company. Understanding this helps you know exactly what you’re buying when you invest.

In the sections that follow, we’ll explore each step in more detail, along with tips on fees, taxes, and long-term investing strategies.

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Step-by-step guide to buying shares in the UK

The buying and selling of shares may seem a daunting task, but in reality, it takes less than a minute.

For an in-depth guide on this topic, you can refer to our guide on how to invest in stocks. However, the main steps to follow are summarized below.

1. Open a share trading account

This is the first significant step, and arguably the most difficult. Several share brokers are available in the UK, such as eToro, XTB, Avatrade, and more, but choosing one is a daunting task.

It is crucial that you carry out thorough research of the best UK stock brokers, and choose the one that best meets your requirements.

Most brokers offer more or less the same service, but may charge different fees.

When selecting a broker, it is important that you take into account your portfolio, the investments you plan to make, your trading frequency, and the service you require.

Once you have selected a broker, opening a share trading account is an easy task.

All account opening processes include know-your-customer (KYC) verifications, but this shouldn’t take more than 10 minutes.

Applicants will have to provide basic details, including bank account information, identity, and more.

GIA vs ISA vs SIPP explained: which investment account should you choose?

Picking the right account helps you keep costs and taxes under control from day one. In the UK, most investors use one of three account types.

Account type	What it is	When it helps
GIA (General Investment Account)	A standard, flexible account for buying shares and funds.	Good if you already used your ISA allowance or want no contribution limits.
Stocks & Shares ISA	A tax-efficient account for investing in shares and funds.	Ideal for long-term investing since gains and dividends are sheltered within the rules.
SIPP (Self-Invested Personal Pension)	A personal pension for long-term retirement investing.	Suits investors who want tax relief on contributions and can leave money invested until retirement age.

For most beginners, an ISA is a simple way to grow a portfolio while keeping future tax on gains and dividends down.

On the other hand, a GIA offers flexibility with no annual cap, while a SIPP works best for retirement goals since access is restricted.

What documents do I need to open a trading account?

Opening a trading account in the UK is quick and simple. You’ll usually need to provide:

• A valid photo ID, such as a passport or driving licence.

• Proof of address, like a recent utility bill or bank statement.

• Your National Insurance number for tax purposes.

Once submitted, most brokers verify your account within minutes, so you can start trading the same day.

2. Add funds to the account

Once you have opened a brokerage account, you will have to transfer funds to that account to start trading.

ou can easily transfer funds through your debit card or electronic bank transfer.

To deposit funds into your brokerage account, you first need to log in and then select ‘deposit funds’.

Next, select the deposit method, such as debit card or bank transfer, and enter the amount you want to deposit.

You generally require enough money to buy at least one share, but some brokers allow users to buy fractional shares.

The fractional share feature becomes important if you want to invest in UK companies with high share prices.

Some brokers also have a minimum deposit requirement, usually ranging from around £50 to £100.

3. Decide which shares you want to buy

If you haven’t already decided on the stocks you want to buy, now is the time to do it. It is recommended that you carry out thorough research to decide on the stock or stocks you wish to buy.

If you don’t have time or don’t want to spend time in research, you can make use of copy trading features that some brokers now offer. Such a feature allows you to copy the trades of successful traders, thus saving you the daunting task of manually selecting your own.

If you don’t want to invest in individual stocks, you can also invest indirectly in stocks through professionally managed investment funds.

4. Select order type

To buy or sell shares, you need to select the order type. There are usually four types of order to choose from:

• At Best: The broker will execute the buy or sell at the best available price.
• Buy-Limit: Under this order type, the broker will execute a buy trade only if the share price drops below a specified price. Such orders, however, attract higher trading fees and have an expiry date.
• Sell-Limit: Similar to buy-limit, a sell-limit order means the broker will execute a sell trade only if the share price goes above the specified price.
• Stop-Loss: In this order type, the broker executes a sell order if the share price drops below a set price. Stop-loss works as an effective risk management tool that helps in minimizing losses.

5. Place the trade

Once you’ve selected the order type, review your trade details carefully before confirming. 

The broker will display a summary screen showing the stock name, number of shares, order type, investment amount, and all applicable fees, such as commissions or currency conversion charges.

Take a moment to check that everything looks correct. When you’re satisfied with the details and the quoted price, confirm your trade. The broker will execute it instantly or once the market reaches your set price, depending on the order type.

After placing your trade, you can verify it under the “Completed” or “Pending Orders” section in your account. If the quote changes while you review, the platform will automatically refresh it before executing.

Once confirmed, your order is live, and you’re officially a shareholder.

How long does it take to buy and sell shares in the UK?

Once your account is verified and funded, you can buy shares in just a few minutes through your broker’s website or app. Most online platforms execute trades instantly during market hours.

The official settlement period in the UK is T+2, meaning your trade is fully settled two working days after the transaction date. This is when the cash and shares officially exchange ownership.

Selling shares works the same way. You can sell at any time the market is open, but the proceeds may take up to two business days to appear as cleared funds in your account.

6. Monitor your portfolio

You now know how to buy shares UK, but this isn’t the end of the process. In fact, the more difficult part starts now. It is very important that you regularly monitor your portfolio to ensure the performance is in line with your financial goals.

You can use the broker tools to review the performance of your portfolio in real-time. If you believe any corrections are needed you can do so, either by selling some shares, or buying more shares, or both. The process of selling the shares is similar to buying.

It must be noted that if a stock pays any dividend, it will usually show as cash in your portfolio or get automatically reinvested.

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The best share brokers UK compared

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Individual stocks vs. investment funds

You can invest in UK shares either directly or indirectly. Directly means buying individual stocks, while indirectly means via funds. Let’s understand the two methods in detail.

Individual stocks

When you buy shares of any company, you directly invest in it. Buying individual UK stocks may appear easier, but this is often not the case, and it’s riskier as well. To buy individual stocks, you need to do a lot of research to pick the stock with upside potential.

Thus, this method of investing is better suited for experienced investors who know how to pick stocks and are confident in their research. Moreover, buying individual stocks is riskier even for experienced investors if they limit their investments to a few stocks.

Diversification is the key to reducing risk, and this is where investing via funds holds an advantage.

Pros and cons of investing in individual stocks

Investment funds

Investing via a fund means investing in a professionally managed investment fund. An investment fund pools money from multiple investors to buy a package, which includes shares of different companies and often other assets, such as bonds. There are funds that target different industries, such as banking, or different categories, such as mid-cap and low-cap companies.

Investment funds have the potential to offer higher returns than individual stocks and are less risky as well. There are several types of funds to choose from, including ETFs (exchange-traded funds), investment trusts, and more.

Pros and cons of investing in funds

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What fees are involved in stock trading?

All investments carry charges, whether it’s a fee imposed by the platform, or tax rules imposed by governments. Investing in UK shares is no different.

As an investor, it is very important for you to be aware of all costs involved in calculating your potential profit from share investments.

Stock trading fees in the UK at a glance

Understanding how fees work helps you avoid surprises when you start investing. Most brokers charge a mix of trading fees and taxes that can slightly reduce your total return.

Here’s a quick summary of what to expect:

Fee type	What it means	Typical range
Bid-offer spread	The difference between the buying and selling price of a share.	Varies by stock liquidity
Broker commission	The platform’s fee per trade or as a small percentage of your investment.	£0 to £10 per trade
Stamp duty	A 0.5% charge on UK share purchases, known as Stamp Duty Reserve Tax for electronic transactions.	0.5% of the transaction
Other broker fees	Additional costs charged by some platforms for account use or services.	Depends on broker
Capital gains tax	Tax on the profit you make when selling your shares for more than you paid.	10–20% depending on your tax band

Example: If you invest £1,000 in UK shares, you’ll typically pay around £5 in stamp duty, plus any broker commission or spread. That means your shares would need to rise just over 0.5% in value to break even.

For foreign shares, stamp duty doesn’t apply, but brokers usually charge an FX conversion fee instead.

Below, you’ll find a breakdown of each common fee in more detail so you know exactly what you’re paying for when you trade.

Bid-offer spread

The first cost you need to know about is the ‘bid-offer spread.’ A bid is the price that a buyer will have to pay for a share, while an offer or ask is the price a seller will get by selling the same stock.

It must be noted that there is always a gap (spread) between the two prices. The spread is likely to be less for shares that are traded frequently.

Broker commission

Your broker’s commission is another cost that you need to factor in before executing a transaction. The commission could be a percentage of the transaction or a flat rate.

Many FCA-regulated brokers now offer commission-free trading, so it’s important to check for other possible costs, such as spreads or conversion fees.

Stamp duty

Stamp Duty is applicable only at the time of buying shares, and it is 0.5% of the transaction. Visit the UK government’s information page on taxes to learn more about stamp duty when buying shares.

Traders in the UK will pay stamp duty on “paper-based” share transactions (where a written document is involved), and pay Stamp Duty Reserve tax on electronic, “paperless” transactions.

Other broker fees

Your broker may also charge platform fees (annual fees charged for holding the shares and funds in an investment account), inactivity fees (for not using your account), telephone fees (if trading via phone), withdrawal fees (for withdrawing money from the platform), and a foreign exchange fee (for buying and selling foreign shares).

Capital gains tax

In the UK, capital gains tax is applicable on the profit you make from the stock market, not the total money you receive.

As a basic example, if you buy a share for £10,000 and sell it for £11,000, you will pay capital gains tax on your £1,000 profit.

For 2025, the rate of capital gains tax for basic-rate taxpayers in the UK is 10%, while higher-rate taxpayers pay 20%.

It is worth mentioning that investors using a Stocks & Shares ISA are exempt from capital gains tax.

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What’s the best time to buy shares?

There is no guaranteed “perfect” time to buy shares, but many investors focus on consistency rather than timing.

UK stock markets are open Monday to Friday from 8 a.m. to 4:30 p.m., and most investors prefer to trade during these hours for the best liquidity.

Instead of trying to predict short-term market movements, consider investing gradually through a strategy called pound-cost averaging, where you invest the same amount at regular intervals. Over time, this approach helps smooth out market ups and downs.

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What are the risks of investing in stocks?

Investing in a stock exchange is a risky affair. Some shares are more risky than others, but irrespective of the share you buy, investing in stocks will always carry some degree of the following risks:

Investment risk

Investment risk refers to the fluctuation in the price of the underlying asset. You could incur a loss on your investment if the asset price goes down. Each stock has some degree of investment risk.

Market risk

Market risk is not specific to stocks, but rather affects the entire market. For instance, interest rate changes, political situations, and natural disasters can affect the entire market.

Liquidity risk

Liquidity risk arises when there is a low demand for the asset you have. If you want to sell your asset, but the demand for that asset is low, you may not be able to sell it or get less than the expected price for that asset.

Currency risk

Currency risk comes into play when you trade foreign shares. Though your broker charges you a currency conversion fee, this may vary depending on the change in the currency’s value.

Inflation risk

Inflation risk occurs when rising prices reduce the real value of your investment returns. Even if your portfolio grows, inflation can erode your purchasing power over time.

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