For UK investors, a Stocks and Shares ISA is one of the most tax-effective ways to invest in the FTSE 100. You can invest in shares, funds, and ETFs, and any dividends or capital gains are entirely tax‑free (up to the £20,000 annual allowance).
Fortunately, a fresh allowance opens up with the new tax year in early April. That gives British residents a chance to open a new ISA or top up their existing portfolios.
But with so many stocks to choose from, where should you start?
Top ISA stocks
When researching where most ISA investors tend to put their money, three FTSE 100 names keep coming up: Shell, Lloyds, and GSK (LSE: GSK). Among ISA millionaires, roughly 39% hold Shell, while about 32% hold Lloyds and roughly the same proportion own GSK. That makes them some of the most commonly-held stocks in high‑value ISAs.
Shell’s popular for its global energy exposure and generous dividends, and Lloyds is a classic play on the UK economy and housing market. But I find GSK particularly interesting right now, because its numbers are looking very impressive.
Let’s break down why it could be a top FTSE 100 pick to consider for an ISA this season.
A stable income pick
Since decoupling its consumer healthcare business in 2022, GSK’s grown to become a global pharmaceutical and vaccines giant.
In 2025, it delivered sales of around £32.7bn, with growth driven by speciality medicines and key vaccines. Operating profit and earnings rose sharply as legal costs fell and newer products scaled up. Now, management’s guiding for further turnover and earnings growth in 2026, aiming to push annual sales beyond £40bn by 2031.
But the big attraction for me is income. Admittedly, the 3.6% dividend yield isn’t spectacular, but it IS well-covered — which is arguably more important. With a 46.8% payout ratio and cash coverage of 3.6 times, there’s very little risk of a cut any time soon.
That kind of coverage gives management room to keep investing in research without ignoring shareholders. In my opinion, a sensible payout backed by strong cash flow is exactly what long‑term ISA holders should be focusing on.
Fairly-priced and profitable
With a price‑to‑earnings (P/E) ratio of 14 and a P/E‑to‑growth (PEG) ratio of just 0.11, GSK’s valuation looks good. Basically, it’s low-priced compared to the level of growth it’s achieved. You could even consider it undervalued — if you believe the business will deliver as planned.
Profitability’s another plus. Return on equity (ROE) is around 38% and net margins are about 17.5% — strong numbers even by pharma standards. That gives the company more breathing space to ride out volatility, which is critical in today’s market.
But like all big drug makers, GSK’s at risk from patent expiries and tougher global drug‑pricing rules. If key medicines lose exclusivity faster than the pipeline can replace them, or if pricing reforms bite harder than expected, profits and the share price could suffer.
Final thoughts
Overall, GSK’s the kind of steady, cash‑generative business you get with diversified global healthcare exposure, a well‑covered dividend, and a valuation that doesn’t look over the top.
For UK investors aiming to hold for years rather than months, it could be worth considering for a long‑term Stocks and Shares ISA, alongside other FTSE 100 favourites.
