Dougie Hunt

UK Investing Beginner Guide: 5 simple steps to start investing

Money Hacks Article


⭐ Updated 14 July 2023

💥 Published 6 May 2021

UK Investing Beginner Guide: 5 simple steps to start investing

I started my investing journey in 2020 along with a lot of other people during the Pandemic.

During the last year I wished I had some simple steps to help me get started so that I could make sensible investing decisions from the beginning.

There’s a lot of bullshit online when it comes to investing and it’s easy to get confused by advice from Americans that’s no good for the UK and getting gold rush fever in trading and crypto.

It’s alluring to do trading and dealing in crypto, but from experience it’s very volatile and you can make some very easy losses. Not ideal. Making a loss is painful twice. First where you made an actual loss and secondly where you missed out on possible gains from a sensible investment strategy.

Yes, I lost about £500 in the Gamestop AMC hype. I lost £350 in the US Cannabis Stonks hype. I lost £100 in Bitcoin and Dogecoin hype. I bought high. I sold low. I am an idiot.

I’m not afraid to wear my losses, they are failures, and they are learning experiences. From that I gained a lot of knowledge of what sensible investing looks like and what it can achieve.

My losses above total about £950 down the drain. Not only that but I missed out on the x% gains in growth from putting that money into a sensible investment.

So without further ado, here are the 5 simple steps to start investing in the UK that I have written for my younger self to save some of the painful learning curve.

Step 1: Sign up to Freetrade

Freetrade is an investing app available for iPhones and Android phones. It’s simple, clean and beginner friendly app. Freetrade, the company, is based in the UK.

I’ll be doing a review of Freetrade so keep an eye out for that.

Sign up to Freetrade using this link and get a free share worth up to £200:

There are other apps and website available. Freetrade is not the only investing app in the UK. It is, however, the only one I use now.

If you want to just test the waters then go onto Step 2A, or, if you want to get started properly then go onto Step 2B.

Step 2A: Open a Freetrade GIA

Open the Freetrade App and open a GIA account for free (General Investment Account). This is a free account but it is taxable. Any profit you make you need to declare on your self-assessment at the end of the tax year, and you may have to pay Capital Gains Tax on this profit.

This isn’t anything to worry about but worth reading about Capital Gains Tax to keep educated. For example, did you know you in 2021/2022 tax year there is a Capital Gains tax-free allowance of £12,300. So if you make £12,000 in profit you pay no Capital Gains Tax on that. Tax is individual so your circumstances may differ.

Step 2B: Open a Freetrade S&S ISA

You can only pay into one Stocks and Shares ISA per tax year. If you have paid into another S&S ISA this tax year then choose a GIA account in Step 2A.

Open the Freetrade App and open a S&S ISA for £3/mo.

Stocks and Shares ISA – you can only pay into one of these per year and in 2021/2022 the max allowance across all ISAs is £20,000.

Step 3: Connect your bank account

Click ‘Account’ in the menu bar in the bottom and then connect your bank and deposit £50, now wait for your money to be transferred to Freetrade

Step 4: Find investments

In the Freetrade app click ‘Discover’ in the menu bar at the bottom of the Freetrade app now enter the ticker symbol ‘$VWRP’ (FTSE All World ETF Accumulation by Vanguard) which is an index fund that tracks the top ~3500 companies.

There are thousands of stocks and funds to choose from. $VWRP is an investment I would purchase for a diversified portfolio containing the biggest public companies around the world. I own shares of $VWRP.

Step 5: Buy investments

Click ‘Buy’ then enter £50, then click ‘Review Order’, when the market opens Monday to Friday, your order will be fulfilled and you’ll own £50 worth of $VWRP Vanguard’s FTSE All World Index Fund Accumulation. You’ll get your free share worth up to £200 in the next few days.

Standard Disclaimer

Do your research.
Not investment advice.
Not financial advice.
Not tax advice.


Answers to your questions

Here are some answers to questions I get asked most about from this article, UK Investing Beginner Guide: 5 simple steps to start investing. I'll try my best to answer any relevant questions that get sent to me when I can. If you have any questions just drop them in the comments below.

What other apps and sites can I use?

I recommend Freetrade, but there's also Trading212, Stake, Vanguard, and Hargreaves Lansdown to name a few. They all have their pros and cons. Keeping things simple and affordable is why I use Freetrade.

What about a Pension (SIPP) on Freetrade?

Yes, this is another great option to contain your investments but there are pros and cons with SIPPs, as there are with GIAs and S&S ISAs. It depends on your goals and strategy. For beginners best to choose a GIA or S&S ISA until you get to grips with the ins and outs of investing and come up with a plan of action.

Do I need to pay for Freetrade?

Freetrade keeps it's pricing simple, and I'll cover this in the Freetrade Review, but the main pricing for 2021 is GIA are free to open and S&S ISAs are £3/month.

What about Freetrade Plus?

I pay for Freetrade Plus. I think it's great for £9.99/month. For that you get a free S&S ISA and save a few quid off the SIPP subscription. Worth the money I think. But for beginners you can get Freetrade Plus further down the line.


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