Buying shares in the UK can help you grow your money, but it can also be a risky investment. It’s important to know what you’re getting into before you start investing and to make sure it’s right for your personal situation and financial goals. Before you buy, consider the tax implications. They can also be subject to dividend tax if the companies you invest in pay out dividends that total more than PS2,000 in 2021-23.
To help you, we have presented some ways in which you can effectively buy shares in the UK.
There is a range of fees and commissions to be aware of when buying shares, including bid-offer spreads. These are the extra costs incurred by a broker or platform for processing transactions. These can vary, but they usually work by allowing firms called market makers to take a small cut of the deal when you buy and sell.
When you want to buy shares, you must open an account with an online stock dealing platform. It will need to be regulated by the Financial Conduct Authority (FCA) and have client funds kept in segregated bank accounts. These safeguards ensure that the broker cannot use your funds for its own working capital and prevent it from exposing you to any financial risks.
How do I choose a broker?
When buying shares, you need to find a reliable online stock broker that offers a wide selection of different investments. It should offer shares on various exchanges, both in the UK and internationally. It should also be able to deliver good customer service.
You should consider your own personal risk tolerance when choosing a stockbroker. If you have a high tolerance for risk, then it could be worth opting for a broker that specialises in more volatile stocks. On the other hand, if you have a low tolerance for risk, then a less specialised option might be more suited to you.
Buying shares through a broker is the most popular way of investing in the stock market. This is because brokers offer a range of investments, from shares to equities and even funds, all at competitive prices.
Some brokers offer commission-free deals, meaning you can buy shares without paying a fee for the transaction. These are worth considering, as they can save you money over time. The price you get for your shares depends on how quickly the company fulfils your order.
If you are a first-time investor, it’s a good idea to seek professional advice before you make any major decisions about your portfolio. This is because a financial adviser can assess your level of risk and investment goals and recommend a portfolio that will help you meet those targets.