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How to Buy Shares UK - Ultimate Guide 2021

35 Min Read
Last Updated March 26th 2021

In today’s age of digital brokers - buying shares in the UK has never been easier. All you need is an online share dealing account and a debit/credit card.

If you’re interested in buying shares but unsure where to begin - look no further.  We have put together a simple and comprehensive guide on How to Buy Shares UK.

Within it, we discuss how you can buy shares easily using a regulated and well-reputed online broker.

We will also cover some of the most beneficial tools you can use to study the market, explain how to open a trading account, and show you how to purchase your first share of a company.

How to Buy Shares UK in 5 Easy Steps 

The easiest way to buy shares is through an online brokerage platform. However, you will first need to do your homework to find the best broker that offers features that align with your trading goals.

In case you are strapped for time - we suggest that you consider opting for eToro. The platform is regulated by the FCA, CySEC, and ASIC, and offers you access to thousands of shares to create a diversified portfolio. 

Below are 5 easy steps that you need to buy shares:

Step 1: Create a stock trading account 

Step 2: Add funds to your trading account with a debit/credit card, bank transfer, or PayPal. 

Step 3: Choose the shares you want to buy 

Step 4: Specify how much you want to invest

Step 5: Confirm the purchase

 

As you see, the process can be incredibly easy. However, the challenge is to decide which shares to buy and when to make the purchase. That is why before you start investing in shares, you will first need to have a firm grasp of stock market basics.

Understanding the Fundamentals of Buying Shares in the UK

Buying shares can be one of the most effective ways for you to grow your wealth in the long-term. Thanks to the internet, getting a slice of action has become easier than ever. Today, you can gain access to thousands of shares in multiple international exchanges at the click of a few buttons. 

All you need is to have a reliable online broker in your corner.

Considering the demand in the online trading arena, there are hundreds of online stockbrokers who want a piece of your business. Fortunately for investors, this means access to competitive fees and commissions. Additionally, brokers are also introducing powerful features that can aid you in your decision-making process every step of the way. 

However, in order to know which broker to choose, you should have a great understanding of the fundamentals of how share markets work. 

What you need is a proper mix of market awareness and tools - to make the right move at the right time. By educating yourself about the rudiments of the stock markets, you will be able to identify lucrative opportunities as well as avoid any costly mistakes. 

For instance, did you know that once you have purchased shares of a company, you should receive a share certificate within two months? Or, that you not can only profit from the rising prices of a share, but also from a dip in the stock value?

These are only a segment of the dozens of possibilities and intricacies of the stock trading arena. Now,  it is time to dive into the bare-bone basics on how to buy shares UK. 

What are Shares?

Shares, or stocks, are investments that denote your ownership in a company. In other words, when you buy a share, you are purchasing a piece of the company in question. 

To explain better, companies often need capital to fund their operations. They do this by enlisting their company on a public exchange and selling their shares - thereby making you part-owners. As such, when you buy shares, you are also entitled to a share of the profits that the company makes. 

The shares are available for you to purchase on a public stock exchange - such as the London Stock Exchange (LSE), the New York Stock Exchange (NYSE), the Australian Securities Exchange (ASX), and more. 

The value of a share is determined by several factors. You can, however, sum it up to the supply and demand in the stock market. When there are more buyers interested in the shares of a particular company - the price of the shares will rise. 

When you buy shares, you hope that the company will do well, and the value of the shares will increase - and consequently, that your investment will grow. 

That said, sometimes, the company does not perform as well as you expected. This might lead to more people selling the shares, so its price will decrease - along with the value of your investment. 

Investing in Shares 

There are several ways for you to profit from taking ownership of shares. If you are investing in a company share that offers dividends, you can easily accumulate money over time. 

In the long-term, these payments can add up, and you will be able to yield a solid return - by taking advantage of compound interest. We will discuss this more in detail later in this guide. 

Additionally, depending on the number of shares you hold in the company, you will also be granted the ability to vote at shareholder meetings. 

These Annual General Meetings (AGMs) will allow you to vote on the company's internal structuring - such as electing a board of directors, deciding dividend payments, compensation, and other aspects. 

That said, many investors in the UK also choose to buy shares expecting their value to rise in the future. This way, you will hold on to the shares - until it is the right time for you to sell them and make a profit in return. 

The profit you make will depend on the number of shares you hold, as well as the current stock price of the company. 

How to Make Money from Shares UK

In order to earn money from your shares, you will first need to build a portfolio that can generate returns on a consistent basis over the long term. 

There are three different ways through which you can capitalize on your share investment - which we discuss in more detail below. 

1. Rising Share Price 

The value of shares fluctuates based on the general market sentiment. If more people want to buy the shares, then the price will increase. If the reverse is happening, then the shares will fall. 

When the value of shares increases to a value higher than what you originally paid - then you are looking at ‘capital appreciation’ - otherwise referred to as ‘capital gains’. 

Take a look at this practical example:

  • Suppose that you buy 1,000 shares of Rolls-Royce at 110p per stock. 
  • Meaning, your total investment in the company adds up to £1100. 
  • After two years, the price of Rolls-Royce shares rises to 150p per stock. 
  • Wanting to cash out your profit, you choose to sell your shares. 
  • Your total returns amount to £1,500. 
  • At 40p per share, your profit stands at £400. 

This £400 you made in profit is called the capital appreciation of the share. 

In the UK, any profit you make by investing in shares will have to be declared to HMRC. The tax rate you are liable to pay will depend on your personal circumstances. 

Read Also: 10 UK Shares To Buy In 2021 Could Double Your Money

2. Quarterly Dividends

Along with capital gains, investors can also expect to earn income on shares in the form of dividends. In its simplest form, a dividend is the distribution of a company's returns to its stakeholders. 

In most cases, the company will distribute only part of its profits as dividends and sets aside the rest for operational and expansion costs. 

If you own stocks of a company that pays out dividends, you are entitled to a share of the profit. How much you earn as a dividend will depend on the profit the company makes and the number of shares you own.  

In other words, you will receive a dividend payment for every share you own in the company. 

These dividends are often paid out every three or six months and are calculated per share. 

Here is how the dividend payments work in the UK:

  • Let us suppose that you own 1,000 shares of Barclays.
  • The company pays dividends every 3 months.
  • For the next quarter, Barclays announces that they will pay an annualized dividend yield of 6%. 
  • At the current price of 150p per share, the dividend amounts to 9p per share annually - so 2.25p for this quarter
  • Since you hold 1,000 shares, you get a total of £22.50 in dividends. 

The biggest advantage here is that any dividend payments you receive will be in addition to the previously discussed capital appreciation. 

Therefore, ideally, you are looking to buy shares of companies that will grow in value over time, as well as make regular dividend payments. 

3. Compound Growth

Another way to earn passively on your shareholdings is to reinvest the earnings from the asset to gain additional income - this process is called 'compounding'. 

You can achieve compound growth on shares that pay out dividends. In this case, you can buy more shares with your dividend payments. This way, along with your earnings from your original investment, you will also be making gains on your reinvestments. 

This is particularly useful if you are holding a share for a long time - as the compounding effect adds up and permits faster growth. 

However, make note that your initial earnings can be small until the investment has had a chance to accumulate. That said, over the long run, compound growth can be highly lucrative. 

Additionally, due to market volatility, you also have to consider that dividend payments can be uneven. 

For instance, in one quarter, you might receive a dividend payment of 9%, whereas, in the next quarter, you might receive only 4%. Therefore, you will also have to take market fluctuations, as well as inflation, into account. 

If done right, compounding can help you earn interest - regardless of how inconsistent the market can be. 

What Drives the Price of Shares? 

As we mentioned earlier in this guide on how to buy shares UK, the underlying factors that determine stock prices are supply and demand. 

If there are more people interested in buying the shares of a company than selling them - then the price of the share will grow. On the other hand, if there are more people looking to sell the stocks - the price will drop. 

That said, this general interest in shares is further influenced by a long line of factors. Gaining an understanding of these underlying elements will help you make informed decisions when it comes to learning how to buy shares UK. 

News Related to the Company

Any new developments in the industry or the specific company can influence the demand for its stock. As you can guess, good news that leads to better prospects of the company always tends to raise demand. 

Similarly, any news reports of uncertainties or negligence within the company can result in decreased demands. 

For instance, if a company announces dividend profits that are better than what was predicted, the demand for its stocks are likely to rise - thus driving up prices. 

On the contrary, if a company announces that it has some internal issues or experienced a bad quarter, demand will lower - pushing the price of its stocks down. 

Market Predictions by Analysts 

Well-established investment firms such as Morgan Stanley and Goldman Sachs regularly update their ratings on stocks. These scores are based on past performance, market conditions, and expected growth over a given period of time. 

Generally, shares are rated as 'buy', 'sell or 'hold' in these reports. 

As traders and investors are likely to follow these analyses, such reports could also significantly impact the price of a share. 

For instance, if a well-reputed Wall-Street firm changes its rating of a share from 'sell' to 'buy', you could see increased demand in buying the shares. 

Economic and Political Landscape 

Stock prices are also driven by any changes in the wider economic and political landscape. For instance, company share prices can be affected by inflation, unemployment rate, regulations, political disturbances, and more.  

Market Sentiment 

Ultimately, all these factors boil down to the investor sentiment regarding a particular stock. If more investors feel confident that the price of shares will increase in the future, the demand will also follow suit - thus driving up prices. 

On the other hand, when investors are concerned with market conditions and expect share prices to fall, the demand will decline, and so the prices will also drop. 

At first glance, it might appear that a long list of factors can affect the share market. That is why we recommend that you do thorough research when you consider how to buy shares UK. 

Don't Miss: Top 10 British Shares To Consider For 2021

What to Consider Before you Buy Shares UK

Stock markets have historically delivered excellent returns to investors over the long run. That said, not every company in the stock market performs equally well. In fact, many firms are now valued at only a small portion of what they were once worth. 

You can see this particularly among UK high street banking firms, where firms such as HSBC never fully recovered from the global financial crisis of 2008. The company's stocks stood at approximately 750p in 2007. However, in early 2021, the shares are worth much less at 420p. 

In light of this, you always need to consider the risks involved before investing in shares. If you are new to the share market arena, below are a few tips that you can employ when you learn how to buy shares UK. 

Tip 1: Diversify Your Portfolio 

One of the most simple yet effective ways to manage risks is by diversifying your stock portfolio. In this approach, you will be spreading your investments over different shares instead of putting all your eggs in one basket. 

Consequently, this will reduce your exposure to a single stock. Owning an investment portfolio with diversified stocks is relatively less risky than buying shares of only one or two different companies. 

You will not only be investing in separate firms but also in companies from different sectors. 

For instance, let's say you have £10,000 available to invest in the share market. If you are new to the investment scene, you might be thinking about investing the entire amount into the shares of a single company. 

In comparison, a seasoned investor is likely to choose 100 different companies spread across multiple sectors and divide the investment evenly. 

A diversified investor's portfolio might include shares of companies of different sectors such as transport, technology, retail, consumer staples, and other fields. In effect, you are hoping to maximize returns by buying shares in diverse areas that will react differently to the same event. 

This way, even if the shares of one company drop, your other investments might still offer you returns. 

Tip 2: Begin with Low Stakes 

If you are a complete beginner in the investment space, it is important that you start slow. This will allow you to learn your way around studying the market and understanding how to choose your assets. 

However, in order to make this happen, you will first have to find a regulated UK stockbroker that welcomes low stakes. Generally, the best brokers in the industry will have a minimum investment amount required for you to buy shares - this typically ranges from £100 to £200. 

In comparison, on brokerage platforms such as eToro, you can start investing in stocks with capital as low as $50 (about £35). Hence, it will be relatively easier for you to hone your investment skills without having to risk large sums. 

Tip 3: Learn How to Do Fundamental Analysis 

Fundamental analysis is nothing but a way of researching the stock market - by considering the most basic aspects that can affect prices. Doing this can help you gain an idea of what factors drive the market sentiment. 

In order to analyze the market, investors look at a wide range of data. One of the most important points to consider is the company's earnings - which will tell you how much the firm is making and how much it is likely to make in the future. 

In other words, these earnings are what translates to your profits in terms of dividends and the growth of share prices. 

If a company reports high earnings, it generally leads to a rise in stock prices and a larger dividend. When the earnings fall short of predictions, the price of the shares will drop further. 

To do this, we are not saying you do not always have to rely on complicated tools or technical analysis. However, it is significant that you are up to date with industry developments that will affect the value of your shares. 

Let us give you an example to clear the mist. 

  • Imagine that you have invested £5,000 in Tesco shares. 
  • The company reports that it is planning to open several new stores in different locations. 
  • Undeniably, this is good news to investors, as it will bring in more revenue. 
  • This is likely to drive up the value of the Tesco shares. 

Now, this is only one scenario. Let us consider how a different piece of news would impact the price of Tesco shares. 

  • Suppose Tesco announces that it is going to let go of hundreds of employees to cut costs. 
  • Although this might mean more profit, the news will definitely harm the reputation of the company. 
  • In turn, this will reflect the value of the company's shares. 

The extent of your loss will depend on market conditions at the time. That said, if you were able to sell your shares right after the news was announced, you will have the best chance to minimize your losses and get back as much of your investment as possible.  

As we discussed earlier in this guide on how to buy shares UK, when researching the factors that drive stock prices - there is a long list of items that you need to keep abreast with. 

Even for a seasoned trader, it will be impossible to manually watch over every minute change in the market. Consequently, it will be a good idea to sign up for alerts and notifications from a third-party platform. 

For instance, financial websites such as Yahoo! Finance have an option for you to add companies of interest to your portfolio, and the platform will send you real-time market news and updates on prices. 

Ratios Used in Fundamental Analysis 

As you learn more about the financial market, you can also employ advanced fundamental analysis tools. You will be relying on financial ratios to figure out whether a stock is worth investing in or not. 

Below is a list of the most commonly used stock analysis methods.

  • Price to Earnings Ratio (P/E)

This ratio tells you the relation between the share price of a company and its earnings per stock. This ratio enables investors to decide whether the shares are overvalued or whether they are worth more. 

In order to obtain the P/E ratio, you only need to divide the current price of the share by the earnings per share. The ideal ratio to look for will vary from one investor to another. However, the average P/E ratio for the top UK stocks ranges from 13 to 15. 

  • Debt-to-Equity Ratio (D/E)

This ratio tells you the amount of debt a company has in relation to its equity. In other words, the D/E ratio helps you find out more about a company's liability. You can usually find this figure mentioned in the balance sheet of a company's financial statements. The D/E ratio you are looking for is between 0 and 1. The higher the value, the more debt the company has in correlation with its equity. 

However, the impact of this ratio will also differ from one sector to another. For instance, financial institutions and capital-intensive industries such as airlines or manufacturing companies often rely on high levels of debt financing. In such cases, the D/E ratio often tends to be relatively higher as a common practice - which is widely accepted as well. 

  • Dividend Yield 

The dividend yield gives you the ratio of a company's dividend payments to the force of its shares. As we discussed earlier, many investors rely on dividends as the primary way to earn money from shares. Therefore, the higher the number, the better the dividends will be. 

If you are looking to profit from dividends or compound growth, you can compare the yields to find out which shares to buy. 

Apart from these fundamental analysis methods, there are several other tools used by experienced traders. Further, you can also take advantage of technical analysis tools such as indicators and charts to base your decisions on. 

However, if you are a beginner, understanding how to work with technical indicators comes with a steep learning curve. As such, you can look at more passive methods of investing that does not require you to watch and analyze the market yourself. 

Tip 4: Use a Copy Trading Portfolio 

For novice traders, one of the best ways to invest in a diversified portfolio is using a 'Copy Trading ’tool offered by an online broker. 

In a few words, this feature enables you to mirror the purchases of another expert investor.

To elaborate more, let us look at the 'CopyPortfolios' functionality on eToro. The platform allows you to specify the parameters of the investment portfolio you want to build. For instance, you can choose to copy the portfolio of only top-performing investors. 

Once you have selected the specific portfolio type you want, the eToro team will handle all your investments. This will be analyzed based on your conditions specified to maximize the profit potential and minimize the risk. 

You only have to invest in this feature once, and the platform will take care of the rest for you. 

The best aspect of this tool is that you can choose the investor you want to follow or specify what kind of portfolio you want.  In effect, once you invest in CopyPortfolios at eToro, you can sit back and relax without having to worry about which shares to purchase or which ones to sell. 

How to Find a Good Broker to Buy Shares

equity brokers in the uk

So now that we have covered the basics of buying shares, it is time to look at the next step. Your first port of call is to find a reliable online broker who can help you achieve your investment goals. 

There are dozens of brokerage platforms that make it possible for you to buy shares online. However, to the untrained eye, it can be challenging to separate the wheat from the chaff.

In order to make things easier for you, this part of our guide on how to buy shares UK will look at what factors to consider while choosing your online broker. 

Buy Shares of Trade Stock CFDs

Before setting eyes on a platform, the first question that you need to ask yourself is whether you want to 'invest' in shares or 'trade' stock CFDs. 

If you are buying shares as an investment in the long- term, this means that you will be taking ownership of the stocks and holding them under your name. This will entitle you to all the advantages discussed earlier - such as dividends and earnings from compound appreciation. 

On the other hand, if you are trading stock CFDs - you are looking at short-term investment strategies such as day trading or swing trading. In this approach, you will not be owning the stocks but merely trading financial instruments that reflect the value of the shares. 

When short-term trading using CFDs, your profit targets are smaller, and you will enter and exit positions more often.

eToro is a well-reputed online brokerage platform that facilitates both long-term and short-term investments of shares. Additionally, regardless of your strategy, on eToro - you won’t be charged a penny in share dealing fees.

License and Regulation 

Once you know which investment strategy you want to employ, the next thing to consider is regulation. This is, perhaps, the most important factor that you need to take into account. 

Put simply, regulated brokers are registered with financial authorities and are required to follow the various rules and criteria set by the respective body. In the UK, the most well-known regulatory body is the Financial Conduct Authority (FCA). Choosing a broker licensed by the FCA will ensure that you are working with a safe and legit financial platform. 

All brokers who seek licenses from the FCA are required to go through a long application process before they can boast themselves as regulated platforms. Additionally, they are also mandated to abide by a range of guidelines, such as:

  • Having order books audited every quarter by the FCA. 
  • Verify clients via a Know Your Customer process. 
  • Holding all client capital in separate bank accounts. This offers an additional layer of security - meaning that the broker cannot gain access to your investment funds to use as working capital. 
  • Segregated accounts will also protect your money in case the broker faces financial problems. 

Additionally, you will also note that licensed platforms clearly state out the risks involved with making investments. 

Considering all this, it is obvious that your best bet is to sign up with a licensed brokerage platform. If not, you will be putting your investment capital at risk. 

That said, the FCA is not the only regulatory authority out there - as there are many more in other jurisdictions. To name a few, you can look for licenses from ASIC (Australia), CySEC (Cyprus), the SEC (US), FINRA (US), FSA (Japan), DFSA (Dubai), and more. 

To sum up, it is in your best interest to stay away from unregulated brokerage platforms for the safety of your share investments. 

Stock Exchanges 

As we briefly noted above, today, you can take your pick from tens of thousands of shares online through multiple stock exchanges. That said, which markets you have access to will depend on the broker you choose. 

For instance, FCA-regulated broker eToro gives you access to over 2,400 shares through 17 different stock exchanges. Meaning - you can buy shares from companies based not only in the UK but also in global marketplaces. 

To give you an overview, you are looking at firms listed on the:

  • London Stock Exchange (UK)
  • NASDAQ (US)
  • Borsa Italiana Stock Exchange (Italy)
  • Tokyo Stock Exchange (Japan)
  • Hong Kong Stock Exchange (Hong Kong)
  • Frankfurt Stock Exchange (Germany)
  • Paris Stock Exchange (France), and more. 

As you can see, eToro gives you the opportunity to diversify your capital in several international markets. 

Payment Methods 

When you are sure about the broker's regulatory standing and available exchanges, you can explore what payment methods are supported on the platform. In the best scenario, the broker will accept multiple payment methods for you to choose from. This ranges from direct bank account transfers and debit/credit cards. 

Although bank transfers might be more suited for large amounts, note that it might take a few business days for the money to appear in your account. 

In addition, brokers like eToro also give you the option to fund your trading account through e-wallets such as Neteller, PayPal, or Skrill. 

Fees and Commissions 

No matter whether you are trading share CFDs or investing in the long term, your broker will invariably charge you a trading fee in order to facilitate your purchase. 

As with any other business, the fee structure of a broker will also vary from one platform to another. Therefore, you will need to compare different brokerages before you finalize one. 

Here is a quick overview of the types of fees you will encounter when buying shares online. 

Commissions

Commissions are the most common type of fee you are liable to pay on brokerage platforms. This is calculated as a percentage of the total amount you are investing. 

On some platforms, you will have to pay a commission every time you buy shares and again when you are cashing out. At the other end of the scale are brokers such as eToro, which charges zero commissions when you buy shares. 

However, If you are trading share CFDs in the short-term - you will have to consider the spread, which is more of an indirect fee. 

Deposits and Withdrawals

In addition, some brokers also charge you transactional fees in order to process deposits and withdrawals. 

Inactivity Fees

This fee is charged if you do not meet the minimum trading activity for a given period of time. Typically, brokers wait for 12 months of no inactivity to charge you this fee - which will be deducted directly from your trading balance. You will, of course, avoid this fee if you have shares in your portfolio. 

Investment Tools and Features 

These days, brokerage platforms function as a one-stop-shop for all your investment needs. Meaning, you can find market research tools, educational resources, and plenty more without even leaving the broker's website. 

If you are in the market searching for such a platform, here are some features that you need to look for:

Trading Platform 

Many UK share dealing brokers come integrated with their own native trading platform. This means that you can buy shares directly through the broker's website itself. 

Market Updates 

As we noted earlier in this guide on how to buy shares UK, similar to financial platforms, online brokers can also offer you regular updates on real-time market news and developments related to the stock markets. 

Technical Indicators 

If you are an investor who relies on pricing analysis, you will also want to make sure that the online broker offers technical indicators and charts. 

Educational Resources 

Most importantly, if you are a beginner in the investment space, you will want to choose a stock broker that offers educational tools. This can come in the form of videos, webinars, podcasts, or even extensive guides on different aspects of share investments. 

Mobile App and Usability 

You will also need to ensure that the stockbroker website is easy to use and navigate. Even if you are a seasoned trader, you shouldn't have to compromise on usability to gain access to investment tools. 

A user-friendly platform will make sure that all its features are comprehensive for both beginners and experienced traders alike. 

Besides, in the digital era, you might also want to ensure that the broker offers a fully-functional mobile application. After all, you might not always be using your computer to check out market news and follow stock price action. 

A mobile app will make it convenient for you to access all features on the go, 

Other Tradable Assets

Although this guide is focused on shares, when considering a broker - you might also want to check out what other tradable assets are supported on the platform. 

For instance, if you are interested in other asset classes, you will want to find a broker that gives you access to ETFs, bonds, or mutual funds. 

It is best to ensure that you cover this metric before you open an account with any brokerage platform. 

As evident by now, choosing your ideal online broker is not easy. Finding the time to research the ins and out of different brokerage platforms can be a time-consuming process. Therefore, if you are in a hurry - we suggest considering eToro. 

We have analyzed the platform based on all the metrics we mentioned above, and we can confidently say that eToro passed with flying colours. 

Here is an overview of what makes eToro one of the best online brokers to buy shares from. 

  • eToro is licensed by three well-known regulatory bodies, including the FCA, ASIC, and CySEC. 
  • eToro enables you to invest in shares without paying any dealing fees. 
  • The platform can give you access to over 2,400 shares across 17 different exchanges. 
  • eToro offers support for multiple payment methods, including bank transfers, bank cards, and e-wallets. 
  • The platform is also very beginner-friendly and offers Copy Trading features for you to nurture your investment skills. 

How to Get Started with an Online Broker Account

The process of signing up on a brokerage platform is more or less similar at all regulated UK brokers. Nevertheless, to conclude this guide, we are going to show you how to buy shares UK at commission-free platform eToro. 

Step 1: Open a Broker Account

To create your online account, the brokerage platform will ask you to provide the following information:

  • Full Name
  • Home Address
  • Date of Birth
  • National Insurance Number
  • Email Address
  • Phone number 

You will also have to choose a username and password to set up your account. Once your email address and phone numbers are confirmed, you can then continue to the next step. 

Step 2: Identity Verification

All FCA-regulated brokers in the UK are required to implement a KYC procedure to carry out identity verification of all account holders. Although it might sound like a sophisticated process, it is quite simple to complete. 

You only have to provide a valid ID document with your photo - like your passport or driver's license.

In the case of eToro, you do not have to complete this step while signing up. 

You only need to do this when you deposit more than $2,250 (about £1,700)or make a withdrawal. The entire process is automated, and you can start using your account within a few minutes. 

Step 3: Add Funds

When your account is ready to use, you can deposit funds. 

You can pick one of the payment options:

  • Credit card
  • Debit card
  • Bank Transfer
  • Neteller
  • Skrill 
  • PayPal 

Step 4: Buy Shares UK 

With your eToro account funded, you are now ready to buy your first share. If you have a specific company in mind, you can find it by using the search bar. 

Once you have found the stock listing, click on the ‘Trade’ button.

Finally, enter the amount you want to invest and click on the ‘Open Trade’ button.  

You've just bought your first share on eToro - commission-free!

How to Buy Shares UK – The Verdict

It has never been easier to buy shares online in the UK. Since the emergence of online brokers, you can now buy shares, collect dividends, reinvest them and cash out your investments right from the comfort of your home. 

All you need to do is find a trustworthy and regulated online broker to work with. As we have covered in this guide on how to buy shares UK, we suggest that you consider eToro. The platform is not only FCA-regulated but can give you access to thousands of shares - all at zero commission! 

eToro – Buy UK Shares With No Commission

 

etoro broker

eToro have proven themselves trustworthy within the stock market over many years – we recommend you try them out.

Your capital is at risk. Other fees may apply

Check Out:

7 Best UK Stocks to Look for in 2021 and Beyond

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FAQs

Can you purchase shares in foreign companies?

The majority of online brokers give you access to stocks of UK-based and international companies. On brokers such as eToro, you can find markets in the US, Germany, Hong Kong, France, and more! 

How are UK online brokerages regulated?

In the UK, online brokers are regulated by the Financial Conduct Authority, popularly known as the FCA. 

How can I add investment funds to my online broker account?

Depending on the brokerage platform - you will have the choice of debit/credit cards, e-wallets, and bank transfers. 

Am I required to pay fees to invest in shares UK?

Most regulated brokers charge a trading commission in order to facilitate your purchase of shares. However, you can also find platforms such as eToro that offer shares at 0% commission. 

How can I buy shares listed on the London Stock Exchange?

In order to invest in companies listed on the London Stock Exchange, you will have to choose a suitable online broker. Don’t forget, you need to pay stamp duty of 0.5% when buying UK-listed stocks. With that said, eToro not only allows you to buy UK shares commission-free, but it waivers the stamp duty tax!

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