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£3k to invest in an ISA? I’d buy these 2 cheap UK shares today to get rich and retire early

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There are a number of cheap UK shares at the present time after the recent market crash. Although the prospect of buying them to build a retirement nest egg may seem unattractive to some investors, it could prove to be a shrewd move due to their long-term recovery potential.

With that in mind, here are two cheap FTSE 100 stocks that could be worth buying with £3k, or any other amount, in an ISA. They could help to bring your retirement date a step closer.

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A recovery opportunity among UK shares

The prospects for UK shares such as Shell (LSE: RDSB) continue to be uncertain. The company has been negatively impacted by lower oil and gas prices this year that were partly caused by coronavirus.

In response, it has sought to become more efficient. It’s on track to meet cost reduction targets in the current year, which could strengthen its financial position during a turbulent period for the wider oil and gas sector. Furthermore, Shell is investing in more lower-carbon technologies such as wind and solar. This could help to reposition the business as the world continues to move towards a greener economy.

With Shell’s stock price having fallen by 55% since the start of the year, it appears as though investors have factored in a challenging period for the business. Therefore, it could offer long-term recovery potential relative to other UK shares as it leverages its solid financial position to pivot towards growth areas.

Brighter prospects after a difficult period

Berkeley Group (LSE: BKG) is another FTSE 100 company that could offer long-term growth relative to other UK shares. The housebuilder has experienced an unprecedented challenge in 2020, with the housing market coming to a standstill for a period of time due to coronavirus.

However, the company’s strong balance sheet (including £1.1bn of net cash) means it’s in a good position to overcome short-term economic challenges. It also continues to have high customer satisfaction ratings, while a shift towards sustainability could maintain its solid market position versus other housebuilders.

With Berkeley trading on a price-to-earnings (P/E) ratio of around 15, it seems to offer fair value for money relative to other UK shares at the present time. Low interest rates and government support could increase demand for new homes and act as catalysts on the company’s share price over the coming years. As such, now could be the right time to buy a slice of the business within a diverse portfolio of UK shares.

ISA investing

Of course, buying Shell and Berkeley may not lead to impressive returns in the short run. Both companies, along with many UK shares, face uncertain outlooks. However, due to their solid financial positions and sound strategies, they’ve the potential to deliver improving share price performances.

Over time, they could boost your ISA portfolio’s prospects and improve your chances of retiring early.

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Peter Stephens owns shares of Berkeley Group Holdings and Royal Dutch Shell B. The Motley Fool UK has no position in any of the shares mentioned. 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.

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