Stocks and Shares ISA Average Return UK: What Investors Earn
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There is no single average return for a stocks and shares ISA in the UK. It depends on what the ISA holds, the period measured and the costs charged, and the gov.uk ISA pages read for this guide give no average figure. Returns are not guaranteed, and the value of investments can fall as well as rise. The examples below use assumed rates for the 2026-27 tax year and are not forecasts.
The site's rules data was last checked against gov.uk on 26 September 2026. Figures typed in this guide may not yet reflect a later change, and the descriptions of gov.uk pages are summaries that may also lag. The current figures are on the ISA rules at a glance page. General information only, not financial advice.
What does the historical data show?
This guide does not quote a single historical average, because none has been sourced for it. A long-run average total return for a UK index such as the FTSE 100 or FTSE All-Share depends heavily on the period measured, so the index provider's published figures are the place to check. Global indices can differ from UK ones over a given period, and a figure from one period may not repeat.
For the arithmetic, a calculator needs a growth assumption. Any figure used is an assumption to test, not a forecast, and a lower and a higher figure show a range. Averages also hide the year-to-year picture: individual years can show large falls or large gains, and an average means more over longer periods, such as ten years or more.
Why can an actual return differ from a headline average?
Fund charges
Each fund has an ongoing charge figure (OCF), and a platform may add its own yearly charge. These come off the return and compound alongside it, in the wrong direction. If a market returned an assumed 7% and a fund charged 1.2%, the net return would be about 5.8% before platform fees. With an assumed platform charge of 0.25% as well, it would be about 5.5%.
On a lump sum of £40,000 held for 20 years, the difference between 5.5% and 7% growth is about £38,000 in the final value (about £116,700 against about £154,800). The rates are assumptions, and the amount depends on what an account charges.
Asset allocation
A Stocks and Shares ISA holding only equities has in some long periods returned more than one holding a mix of equities and bonds, and has had larger short-term falls. A mix of, say, 60% equities and 40% bonds would be expected to move less than an all-equity portfolio, in both directions. Neither is inherently right. A suitable mix depends on time horizon, risk tolerance and what the money is for, and past performance is not a reliable guide to the future. A shorter horizon allows less time for a fall to recover.
Platform and provider
The platform used affects both costs and investment choice. Some charge a flat annual fee and others a percentage of the portfolio, so which costs less depends on the size of the portfolio. Comparing total yearly cost, rather than one fee, is the like-for-like check.
A worked example: two savers over 20 years
Two people each pay £300 a month into a Stocks and Shares ISA for 20 years, paid in at the end of each month. That is £72,000 in total. Growth is worked out monthly, and all rates are assumptions, not forecasts.
| Saver A | Saver B | |
|---|---|---|
| Investment | Low-cost global index tracker | Actively managed fund |
| Assumed total yearly cost | 0.3% | 1.5% |
| Assumed market return | 7% | 7% |
| Net return used | 6.7% | 5.5% |
| Projected balance after 20 years | about £151,000 | about £131,000 |
The gap is about £20k. It comes only from the higher ongoing costs, since both paid in the same total and the example assumes the same market return. The example does not say which fund will perform better in practice. The Stocks and Shares ISA calculator can model how different return assumptions and payments combine.
What does an average return not tell us?
A Stocks and Shares ISA does not guarantee any return. The Financial Services Compensation Scheme (FSCS) page on investment protection says it cannot accept claims for poor investment performance, and the page does not mention ISAs, so ask the provider or FSCS what applies. If investments fall in value, that fall is not made good by the tax wrapper.
A historical average also says nothing about:
- Sequencing risk. Withdrawing money shortly after a market fall can reduce wealth even if the market later recovers.
- Currency. For internationally diversified investments, exchange rate moves affect returns in sterling.
- Rule changes. ISA rules can change, and gov.uk is the place to check current ones.
- Inflation. A 6% nominal return with 3% inflation is a real return of roughly 3%. Planning for retirement, for instance, often looks at real figures. See ISA planning for retirement for the wider picture.
How does the allowance and tax treatment affect returns?
gov.uk says that in the 2026-27 tax year the maximum you can save in ISAs is £20,000, and that you do not need to declare any ISA interest, income or capital gains on a tax return. Inside an ISA, no tax is taken from growth in a projection, which is an effect that does not show in any fund's performance figure.
Outside an ISA the rules differ. gov.uk gives the Personal Savings Allowance as £500 for a higher-rate taxpayer (GOV.UK: how much is tax free), a dividend allowance of £500 with higher-rate taxpayers paying 35.75% on dividends above it (GOV.UK: tax on dividends), and Capital Gains Tax of 24% for higher or additional rate taxpayers on gains above the annual exempt amount of £3,000 (GOV.UK: Capital Gains Tax rates). Whether any of these applies depends on a person's income and gains, and over decades the difference between holding assets inside and outside an ISA can be substantial.
How a person splits the allowance between cash and investments is covered in splitting the ISA allowance between cash and stocks and shares. Some people weigh time horizon and purpose, for example cash for short-term goals and equities for longer-term growth (an illustration, not a rule). gov.uk says you can split the allowance across multiple accounts.
How can an ISA's performance be assessed?
Comparing an ISA with the relevant benchmark is more informative than comparing it with a vague sense of average returns. An ISA holding UK equities can be compared with the FTSE All-Share total return, and one holding global equities with an index such as the MSCI World or FTSE All-World. A fund that falls well behind its benchmark after charges over five years or more is worth looking into.
Questions to ask:
- Is the fund behind its own stated benchmark, not just the market?
- Are total costs, the OCF plus the platform fee plus any dealing charges, in line with what is received?
- Has the asset mix drifted from the intended split, leaving too much in one sector or region?
How do returns differ by risk level?
As a general description, not sourced data and not a forecast, a higher share of equities has come with a wider range of outcomes, including deeper falls:
- Cautious (mostly bonds and cash). The lowest expected return and the narrowest range of outcomes.
- Balanced (a mix of equities and bonds). A middle return with a wider range.
- Adventurous (mostly or all equities). The highest expected return with the widest range, including deeper falls along the way.
These descriptions assume a long holding period. They are not guarantees, and shorter holding periods increase the chance that returns fall well short of, or exceed, what is expected.
What to check about a Stocks and Shares ISA
These are points to check, described for information and not as recommendations.
- Total annual cost. The fund's OCF plus the platform's annual charge, compared with other providers.
- Time horizon. For money needed within five years, an average return matters less, because results over short periods vary widely.
- Diversification. A single country or sector increases volatility without necessarily improving expected returns.
- Asset mix over time. Markets move, and a portfolio that began as 80% equities and 20% bonds may drift after a strong equity year.
- Payment pattern. Regular payments spread market timing risk, which does not remove the risk of loss.
- A projection. A free ISA Calculator shows how different return scenarios, payments and time horizons combine on the assumptions entered.
An average return is a starting point, not a conclusion. What an ISA earns depends on costs, asset mix, time held and investment performance. Past performance is not a reliable guide to future returns.
Frequently asked questions
What is the average return on a stocks and shares ISA in the UK?
There is no single figure. It depends on what the ISA holds, the period measured and the costs charged, and returns are not guaranteed. This guide uses assumed rates for arithmetic only.
Are stocks and shares ISAs covered by the FSCS?
The FSCS investment protection page says it cannot accept claims for poor investment performance and does not mention ISAs. Ask the provider or FSCS what applies in a particular case.
How do fund charges change what an investor earns?
Charges come off the return and compound alongside it. In this guide's example, two savers paying £300 a month for 20 years at the same assumed 7% market return end about £20k apart, because one pays 0.3% a year and the other 1.5%.
How can a stocks and shares ISA be compared with a benchmark?
A UK equity ISA can be compared with the FTSE All-Share total return, and a global one with an index such as the MSCI World or FTSE All-World. A fund well behind its benchmark after charges over five years or more is worth looking into.
This guide does not constitute financial advice. Your personal situation, tax position, and savings goals may mean different strategies are appropriate. Consider speaking to a regulated financial adviser if you are uncertain.
