Compare risk, returns, and fees across asset classes.
| Category | Individual Stocks | ETFs | Government Bonds (Gilts) |
|---|---|---|---|
| Risk Level | High | Medium | Low |
| Avg Return | 8-12% (varies widely) | 7-10% (index-tracking) | 3-5% (depends on rates) |
| Liquidity | Very High | Very High | High |
| Fees | Low (many UK brokers offer £0 commission) | Very Low (0.03-0.5% OCF/TER) | Very Low |
| Best For | Growth-focused investors willing to research individual companies | Hands-off investors wanting instant diversification | Capital preservation, steady income, risk-averse investors |
| Worst For | Beginners who can't handle volatility or don't want to research | Those seeking to beat the market significantly | Long-term growth seekers; may lose to inflation |
| Tax Treatment | CGT on gains above £3,000 allowance (2024/25). Dividends: £500 tax-free allowance. Fully tax-free inside a Stocks & Shares ISA. | Same CGT/dividend rules as stocks. Fully tax-free inside a Stocks & Shares ISA. Often more tax-efficient than OEICs. | Interest taxed as income. Capital gains on gilts are CGT-exempt. Can be held in ISA for full tax-free treatment. |
UK tax allowances shown are for 2024/25 tax year. Tax rules change — verify on gov.uk/hmrc. This is for educational purposes only.
For educational purposes only — not financial advice.
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