With a spare £50 a month, here’s how an investor could start a Stocks and Shares ISA

Harvey Jones says it isn’t necessary to be wealthy to start investing in a Stocks and Shares ISA. And he sees Unilever as a good company to consider for a start.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Getty Images

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 you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Some people may be put off investing in a Stocks and Shares ISA because they think it’s just for the wealthy.  But at The Motley Fool, we believe anyone with a little extra cash can benefit from setting money aside for the future. Thanks to modern investment platforms, it’s possible to start with as little as £50 a month. 

A Stocks and Shares ISA‘s a fantastic vehicle for this, offering tax-free growth and shielding you from capital gains and dividend taxes.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Should you invest £1,000 in Aviva right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Aviva made the list?

See the 6 stocks

Start small, think big

Before investing, it’s crucial to have an emergency fund in an easy-access savings account. Investing in stocks carries risk, and nobody wants to be forced to sell at a loss if an unexpected bill lands. A good rule of thumb is to have at least three months’ worth of essential expenses saved before committing to the stock market.

Many ISA platforms, such as AJ Bell, Hargreaves Lansdown, Interactive Investor and Vanguard, allow low, minimum contributions. 

Some even offer commission-free investing, making it cost-effective to invest small amounts regularly. With £50 a month, it’s now possible to purchase shares in an investment fund or an individual stock.

Buying individual stocks can be exciting and potentially rewarding in the long run but carries more risk. Some newbie investors may prefer to invest in a low-cost FTSE 100 or S&P 500 index fund, which provides instant diversification. 

However, for someone who fancies trying their hand, picking individual stocks can be much more engaging. Starting with a strong, defensive company’s a smart move.

In my view, Unilever‘s (LSE: ULVR) a solid starter stock to consider. I hold it myself. This FTSE 100 giant boasts some of the world’s most recognisable brands, such as Ben & Jerry’s, Dove, Hellmann’s, Dove, Persil and many more.

I reckon Unilever is a great starter stock

Since Unilever sells everyday essentials, demand tends to remain stable even in economic downturns, helping new investors weather stock market volatility.

Unilever also has a long history of paying dividends, currently yielding 3.2%, with the board aiming for 5% annual increases. 

Its global presence and diversified product range provide stability, though the company has faced criticism for spreading itself too thin. The board is addressing these concerns, but change takes time.

Unilever’s share price has risen just 3% in five years, with dividends on top of that. However, over the past 12 months, it’s surged more than 20%. The outlook’s more optimistic but, as always, past performance is no guarantee of future results.

Created with Highcharts 11.4.3Unilever PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Because every stock carries risk, building a diversified portfolio is essential. I’d aim to increase that initial £50 a month as soon as possible. First to £100, then £150, then £200. Expanding into sectors like technology, healthcare and financial services can further reduce risk.

Reinvesting dividends helps turbo-charge long-term growth. But the most important step? Getting started. With patience and consistency, those small monthly contributions can compound into substantial wealth over time.

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Harvey Jones has positions in Unilever. The Motley Fool UK has recommended Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our best passive income stock ideas

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

More on Investing Articles

Investing Articles

Here’s the dividend forecast for Rolls-Royce shares as Trump rocks the markets

Rolls-Royce shares have joined in the volatility over the past week. However, with the direction being largely downwards, the dividend…

Read more »

Young Asian man drinking coffee at home and looking at his phone
Investing Articles

Dividend yields of up to 11%! Here are 3 UK passive income stocks to consider

Searching for ways to supercharge your passive income with UK dividend stocks? Here are three that have grabbed our writer's…

Read more »

Young Caucasian woman at the street withdrawing money at the ATM
Investing Articles

£10,000 invested in NatWest shares at the start of 2025 is now worth…

NatWest shares surged into 2025, but things have become a little more complicated in recent weeks. Dr James Fox explores.

Read more »

Investing For Beginners

Why the FTSE 250 could outperform the FTSE 100 for the rest of the year

Jon Smith explains why the FTSE 250 could do better than its big brother when factoring in domestic exposure and…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Tariff fears send the Lloyds share price tumbling, but the dividend yield is climbing

Just when the Lloyds Banking Group share price had been rising steadily, along comes a global upheaval to knock it…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

Here’s how a stock market crash could help an investor retire years early

A stock market crash can be alarming -- but for the well-prepared investor, it can also be an exceptional opportunity…

Read more »

Investing Articles

1 key fact to remember in this stock market correction

This writer takes a look at a FTSE 100 investment trust that is catching his eye after the recent massive…

Read more »

Investing Articles

I was wrong about the Tesla stock price!

Tesla stock's been affected more than most by ‘Liberation Day’. But our writer has other concerns about Elon Musk’s company.

Read more »