Types of investment account
Summary
- There are several account types available in the UK, including Stocks & Shares ISAs, GIAs, LISAs, pensions (workplace and SIPPs), and investment bonds — each with their own tax rules, limits, and benefits.
- A Stocks & Shares ISA offers tax-free growth on investments up to £20,000 per year, while a GIA offers unlimited investing without tax protection. Pensions give long-term tax advantages, especially for retirement planning.
- Choosing the right account depends on your goals, timeline, and tax situation, and many investors like a mix to maximise flexibility and tax efficiency.
What are the types of investment accounts in the UK?
- Stocks & Shares ISA
- General Investment Account (GIA)
- Stocks & Shares Lifetime ISA (LISA) - not available with Chip
- Workplace Pension - not available with Chip
- Self-Invested Personal Pension (SIPP) - not available with Chip
- Investment Bond - not available with Chip
What is a Stocks & Shares ISA?
A Stocks & Shares ISA is your tax-efficient friend when it comes to any gains you might make on your investments.
Why choose an SSISA?
They’re tax-free
Unlike the General Investment Account, any returns on your portfolio within your SSISA remain free from income tax. This is often referred to as a ‘tax wrapper’ on your ISA.
You also won’t owe any capital gains tax if you decide to sell your investments at a higher price than you bought them, or any tax on dividends you earn.
You can have multiple ISAs
Previously, ISA customers could only hold one of each ISA type, however, as of April 2024, you can open multiple ISA’s of the same type.
If you hold multiple ISAs, and are looking to bring all of these accounts to one place with Chip, ISA transfer allows you to move one ISA to another without it affecting your £20,000 allowance.
With Chip – It’s flexible
Another added benefit to a Chip Stocks & Shares ISA, is it’s flexible — you can withdraw and redeposit funds from your ISA without it affecting your annual ISA allowance.
For example, if you deposited £10,000 into your SSISA in May, and then needed to make a withdrawal of £1000 on June; once you redeposit the £1000 in July, you would still only have used £10,000 of your ISA allowance (tax year runs from April 6 to April 5 the following year).
What are the drawbacks?
You are currently limited to invest or save £20,000 per year across all your ISA’s. So, you’ll need to make sure you keep track of all your ISA’s between platforms. In the Chip app, it’s easy to view your ISA allowance with us in the ‘Profile’ tab.
It’s also worth remembering that having multiple SSISA’s could come with paying a variety of fees, which may work out greater than holding all your SSISAs in one place. Learn more about investment fees.
Can you have a Cash ISA & a Stocks & Shares ISA?
Yes! If you already have a Cash ISA, you’re able to open a Stocks & Shares ISA, and have both at the same time but don’t forget you are currently limited to invest or save £20,000 per year across all your ISA’s.
Previously, it was only possible to hold one type of ISA at a time, so you’d be limited to one of each (Cash ISA and Stocks & Shares ISA), but as of April 2024, you are allowed to hold multiple of each type of ISA — with the exception of a Lifetime ISA, where you are only allowed one open at any one time.
What is a General Investment Account (GIA)?
A General Investment Account (GIA) is the standard option for investing as much as you like, without the ‘tax wrapper’ of the Stocks & Shares ISA.
Why choose a GIA?
With a GIA, you aren’t restricted to the £20,000 investment per tax year that the SSISA is. You can take advantage of unlimited deposits and withdrawals, without worrying about what you might have invested elsewhere.
This gives you the freedom to open multiple GIAs and deposit as much as you like to take advantage of the best rates. For example, with a Chip X subscription, you can take advantage of 0% platform fees which can save you thousands over time as your portfolio grows.
What are the drawbacks?
With a GIA, investors are liable to be taxed on their investments. If your investments have grown in value, you may owe Capital Gains Tax (CGT) on these gains. However, every tax year you get an ‘Annual Exempt Amount’.
For the 2025/2026 tax year this is £3000, so anything above this amount is taxed at 18% for basic rate taxpayers, and 24% for higher rate and additional taxpayers.
You are also liable to be taxed on any dividends you receive from income funds that pay out on your gains. Similar to the CGT rules, you are given an allowance per tax year, which for 2025/2026 is £500. Beyond this the tax rate is 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers, and 39.35% for additional rate taxpayers.
What is a Stocks & Shares Lifetime ISA?
A Stocks & Shares Lifetime ISA (LISA) is similar to a Stocks & Shares ISA, but was designed to help you buy your first home (up to a value of £450,000) or save for retirement (withdrawal after age 60), offering a 25% government bonus of up to £4,000 per year.
For example, if you invest the maximum £4000, the government will give you a £1000 bonus per year.
Your money is invested, like in a Stocks & Shares ISA, so it has the potential to grow — but early withdrawals (outside of a first home or retirement after 60) will incur a 25% penalty, making a LISA more of a commitment.
You must be aged 18-39 to open a LISA, and can only hold one LISA at any one time.
What is a Workplace Pension?
A Workplace Pension is a way to save for your retirement, set up through your employer. Each time you’re paid, a portion of your salary is automatically put into your pension, and your employer adds a contribution (currently a minimum of 3% on qualifying earnings).
You’ll also get tax relief on what you contribute, which helps boost your savings. Most people are enrolled automatically if they meet certain criteria (age and salary), but you can opt out if you wish.
While you won’t be able to access your pension until you’re 55 (rising to 57 from 2028), it’s a great long-term investment account, especially with the free boost from your employer.
What is a Self-Invested Personal Pension (SIPP)?
A SIPP is a personal pension that gives you much more control over where your money is invested — think of it as a DIY pension. Unlike workplace pensions, where investment choices are often limited, a SIPP lets you pick from a wide range of funds, shares, and other assets.
You’ll still get tax relief on what you contribute, just like with a workplace pension, and you can contribute up to 100% of your income (up to £60,000 a year) tax-free.
It’s ideal for people who are self-employed, or those who want to supplement their workplace pension and have more say in how their pension pot is invested.
What is an Investment Bond?
An Investment Bond is a type of investment product that usually includes life insurance and often provides favourable tax treatment. You pay a lump sum into the bond, and it’s then invested on your behalf, typically into a mix of funds.
It’s generally aimed at medium to long-term investors (more than 5 years) and can be useful for estate planning or for higher-rate taxpayers looking for an alternative to ISAs or GIAs.
Tax is a bit more complex here — the bond itself is subject to tax, but you won't pay further income or capital gains tax unless you withdraw more than your ‘5% annual allowance’. This allows some flexibility when managing tax liability on withdrawals.
Understanding Investment Types & Asset Classes
Within these investment accounts, it’s possible to invest in a variety of asset classes, which we’ll cover in more detail in the guide that follows this one.
Different providers will give you access to different asset classes, and a varying degree of control over how your investments are made. Some will allow you to engage in high risk, active trades, whereas others will offer a few simple investment choices to encourage a passive investing strategy.
When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than your original investment. Chip does not offer financial advice and this should not be considered as a personal recommendation. Diversifying means spreading your investments across different sectors, countries and asset classes.
Seccl Custody Limited is the ISA Manager for the Chip Stocks and Shares ISA. Fund management charges apply. ISA limits apply. Invest £20k per tax year. Chip does not provide tax advice or financial advice. Tax treatment depends on individual circumstances and may be subject to change in the future. GIA proceeds are potentially taxable, subject to any annual exemption that may apply.
Workplace Pensions, Self-Invested Personal Pensions, Investment Bonds and Stocks & Shares Lifetime ISAs are not available via the Chip platform.
