The best trading platforms for beginners (UK)

Keen to start trading stocks and shares and other investments? You’re in the right place. Here’s the best trading platforms for beginners.

Best trading platform for beginners

Best trading platforms overall

Best Stocks & Shares ISA for investing

You can invest tax-free within a Stocks & Shares ISA (but not the same as a trading platform).

Our criteria for determining the best trading platforms for beginners

There’s a lot of trading platforms in the UK, all with different pros and cons, however to determine the best trading platform for beginners, here’s the criteria we used:

• Ease of use
• Platform experience
• Features for beginners
• Educational resources
• Customer reviews
• Investment range
• Fees

We’re only showing the platforms that top the list, and ones we recommend to our friends and family (and readers of course), we even use them ourselves here at Nuts About Money. So you can be sure whichever platform you choose from the above, you’re using a trustworthy, reliable and all round great place to trade, and to learn to trade.

And if you don’t like one after trying it, simply move on to the next one. Finding the right platform that suits you can really make a difference to your trading experience and potentially your bottom line (profit).

What is trading?

When we say trading, we mean buying and selling assets (investments) regularly in pursuit of profit. Typically this is over a very short period of time, from a few minutes to a few days, which is often why it’s called ‘day trading’.

If you are looking to invest or trade stocks over a longer period of time, often simply called investing rather than trading, it’s better to use an investment platform, or a stock broker (a place to buy, sell and hold assets) rather than a trading platform (a place to trade the price of an asset).

With online trading, you typically don’t buy the asset itself, but trade the price of the asset. Confusing right? Instead of buying and owning the asset such as an individual share of a company, or investment fund (we’ll cover those later), you’ll typically buy a CFD, a Contract For Differences…

A CFD acts almost exactly the same, except it’s a ‘CFD asset’ on the trading platform representing the price of the underlying asset. You settle the price difference from when you buy and when you sell the asset. CFDs make it much easier and cheaper to trade and there’s a few more benefits for advanced traders too. Not sure what any of this means? We’ll explain all below.

What is a trading platform?

That brings us to trading platforms. These are places to buy and sell assets, and typically on a website and phone app.

As we mentioned, they typically offer CFDs, which means they have a much wider range of investment options than they could if they were offering the assets directly (such as buying a share in a company, like what stock brokers do).

They can also offer foreign exchange (also called forex, where you trade currencies, like Pounds to Dollars), and more advanced things to trade such as options (buying and selling at a set price in the future). We’ll cover CFDs and investments in more detail below.

With the platforms themselves, XTB¹ has built their own trading platform software for traders, so you can get the best experience when trading, make fast trades (important for day trading), and view all the relevant data (market information etc) you need. You can also customise the interface to suit your own trading style too.

Alternatively, there’s third party trading software which is software you can run on your own computer (like any other program you use on your computer), and this connects to the online broker (trading platform) who makes the trades for you. The best third party trading platform is MetaTrader 4 (MT4). If you do want to use this, one of the best MT4 brokers is IG¹.

However, as a beginner, we recommend getting started with a trading platform that’s a bit easier to use, such as eToro¹. And then once you’ve built your confidence and knowledge of trading, either move onto another trading platform for advanced traders, or stay where you are, it’s up to you.

Note: trading platforms can also be called a stock trading platform, although they don’t just offer stocks these days, there’s a wide range of asset classes (types of assets). That’s why ‘online trading platform’ is often a better term.

Is a stock trading app the same as a trading platform?

There are some great stock trading apps out there, which offer a low-cost option to trade stocks and shares (and exchange-traded funds (ETFs)), and some are completely commission-free too, such as Lightyear¹.

We think they are great, but they’re not quite the same as a trading platform. You’ll be buying the assets directly, so the range of investment options are still great, but typically smaller than CFD trading platforms. And you won’t be able to trade things like forex.

You’ll also have to pay Stamp Duty on UK shares (more on that below), and can’t trade both price directions (read more about CFDs below too).

Overall, they’re a great option compared to a traditional stock broker (who charges share dealing fees), as they’re effectively a more modern stock broker, with free trading! 

However, they’re more suited to low volume retail investors, who might buy a range of stocks and shares and hold over a medium-to-long period of time (and ideally build a well diversified portfolio), rather than day trading.

If you think these might be more suited to you, check out the best investment apps.

What are Contract For Differences (CFDs)?

CFDs, or Contract For Differences, can sound pretty complicated but don’t worry, they’re not as confusing as they first seem.

A CFD is where you enter into an agreement (a contract) with someone (either a broker or another trader via a broker), about the price direction of an asset (e.g. a stock), for instance the price going up in the future (similar to buying a stock directly).

And when you want to close the trade, you’ll settle the difference in the price since you opened the contract (opened the straight). So, you’ll profit if the price has gone up, or you’ll lose money if the difference if it’s gone down. Make sense?

The benefits of CFDs are that you can trade both price directions, so bet the price might go down as well as up, which is called going ‘short’ as opposed to going ‘long’.

They’re also typically cheaper than buying assets directly, and there’s not normally any commission (share dealing fees), in fact there’s not normally any direct fees, except from a spread fee (we’ll cover all the fees later).

And, the broker can offer a much wider range of investment options, as they don’t need to buy and sell the actual asset for you.

Another major benefit for advanced traders, and as part of advanced trading strategies, is that you can trade with leverage (or margin trading), which means borrowing money from the broker to make a larger trade than you otherwise could do, which can magnify your profit (and loss).

Let’s use an example. Imagine you have £50 within your trading account, you could use this as a deposit (called security or collateral), to borrow more, let’s say 5x more (called 5:1 leverage). You could now make a trade worth £250 rather than £50…

If the price of the asset (e.g. a stock) increased by 10%, you’d make 10% of £250, so £25, rather than 10% of £50 (£5). Not bad right?

However, if the price went down 10%, you’d lose 10% of £250 too, so £25, which is 50% of your trading capital. Not great.

They can be a great tool for advanced traders, but very dangerous for beginners – and most traders do lose money. Leverage needs to feature as part of a solid investment strategy in order to be successful with it.

What is spread betting?

Spread betting is also offered by some online trading platforms, such as IG¹ (in fact, they invented it). 

It’s very similar to trading CFDs, however you’ll be officially placing a bet on the price of the asset in the future, and will have a specified date, called an expiration date, this is when the bet will end and that is when the bet will be settled. With CFDs, there’s no expiration date.

As you are technically gambling (betting), there’s also no Capital Gains Tax to pay either. Which you might have to pay when investing generally (unless you use a tax-free Stocks and Shares ISA) and on CFD profits.

And with both CFDs and spread betting, you won’t pay Stamp Duty, which is a tax you’ll pay when buying UK stocks directly. This is 0.50% of the purchase price. It’s technically called Stamp Duty Reserve Tax (SDRT).

Types of investments to trade

Stocks and Shares (equities)

These are where you own part of a company, a ‘share’ of a company. They’re traded on stock exchanges all across the world, such as the London Stock Exchange (LSE) in the UK, and the New York Stock Exchange (NYSE), in America.

All the shares of a company combined equal its total valuation (market capitalisation), and this can change in value, up and down, depending on the performance of the company (e.g. its profit), and the stock market in general.

Indices (stock index)

Indices, or a stock index, are sections of a stock exchange, a group of companies listed on a stock exchange (e.g. the top 100 companies on the London Stock Exchange (FTSE 100), or the top 500 companies in the US, the S&P 500).

They’re often used to invest in or measure the economy of a country, e.g. the FTSE 100 can represent the performance of the UK stock market. And can be used as a benchmark for investing strategies (to beat the stock index).

Investment funds

An investment fund, or mutual fund, is a group of lots of different investments all pooled together into a single investment. For instance, you could have a fund of the FTSE 100 (as described above), or a group of lots of different companies within the same industry, like healthcare, the possibilities are endless!

Investment funds can be traded on stock exchanges too, and if they are, they’re called exchange-traded funds (ETFs), and very popular.

Bonds

Bonds are where you effectively loan your money to large corporations (corporate bonds) and governments, in return for interest payments. You can typically trade the bond price. Bonds are seen as lower risk than stocks and shares.

Commodities

Commodities are real things like gold, silver, oil, coffee, you name it really! And are traded across the world, all the time (24 hours during the week). 

Foreign exchange (forex)

Forex is super popular and this is where you trade currencies between each other, so you swap currencies. For instance, Pounds (GBP) for US Dollars (USD). Local currencies tend to react to world events, and it’s an exciting, fast moving, always-open market (except weekends).

Crypto

You can also trade cryptocurrencies, which are digital tokens on blockchains (e.g. Bitcoin and Ethereum), and very popular (learn more with our guide to cryptocurrency). 

However, you can’t trade crypto via CFDs in the UK, so if you’re interested in this, it’s best to use eToro¹, where you can buy them directly. Or, use a crypto specific exchange – here’s the best crypto exchanges.

Types of investment accounts

General Investment Account (trading account)

With most online trading platforms, a General Investment Account (GIA) is the only account you’ll use, and within trading platforms, this is often called a trading account, or brokerage account.

It’s simply an account with no extra benefits, so no tax-free benefits. And there’s no limit on the amount of accounts you can have (meaning you can use different platforms at the same time), or how much you pay into them.

You might have to pay Capital Gains Tax on your profits within these accounts (we’ll cover that in more detail below).

Stocks and Shares ISA

If you’re looking to trade on an online trading platform, you likely won’t find a Stocks and Shares ISA account, but they’re great for investing in general and especially for long-term investing – so it’s a great idea to open one. If you’re interested, check out the best investment platforms. In fact, here’s the best Stocks and Shares ISAs.

You’ll be able to save and invest as much as £20,000 per tax year (April 6th to April 5th the following year), and everything you make is completely tax-free, forever!

So, you won’t have to worry about Capital Gains Tax, Income Tax, or Dividend Tax (all taxes you could pay on investments, more on those below). It can work out as a big saving, and can accelerate the growth of your long-term investments pretty significantly.

We often recommend letting the experts handle your long-term investing within an ISA, such as the 5* rated Moneyfarm¹, and then make your own investments alongside, with a General Investment Account.

Personal pension

A personal pension is great for long-term investing, particularly for retirement. Not only does your money grow tax-free, but you’ll also get a massive 25% bonus on all of your contributions. We’re not joking!

It’s a great addition to the State Pension and a workplace pension (that you’ll get from your employer if you’re employed).

You’ll be able to save as much as £60,000 per tax year, or as much as your income (e.g. salary), whichever is lower.

However, you can’t withdraw any money until at least age 55 (57 from 2028), and when you do go to withdraw it, 25% will be completely tax-free. You might have to pay Income Tax on the remaining 75%, it depends on your income at the time, and works just like your salary now.

There’s two types of personal pensions, the first is simply often called a personal pension, and is managed by experts, who will grow your money over time ready for retirement. This is a great option, and highly recommended. 

If that sounds interesting to you, check out PensionBee¹, they’re 5* rated, have a great investment record and low fees. You also find all the best options with the best pension providers.

The second type is a self-invested personal pension (SIPP), and this is where you can make your own investments within a pension. They’re pretty great for that reason, but often only used by experienced investors, rather than beginner investors.

We recommend that most people simply let the experts look after their pension. However, a great option for a SIPP is AJ Bell¹.

Taxes when investing

Taxes can have a big impact on your life in general, and the same goes for trading and investing unfortunately! Here’s how it works.

Capital Gains Tax

Capital Gains Tax is one of the main taxes you’ll likely pay when investing and trading, there’s no getting away from it, unless you are investing within an investment ISA or pension.

The good news is that it’s only paid on your profit, when you sell investments. And, only if you make a profit of over £6,000 per tax year (your Capital Gains Tax allowance) – which runs from April 6th to April 5th the following year.

The amount you’ll pay will depend on your income. If you earn less than £50,270 per year, you’ll pay 10% Capital Gains Tax, and if you earn more than £50,270, you’ll pay 20%.

Stamp Duty

You might recognise this from buying property, well it applies to stocks and shares and other investments too. When you buy an asset that’s in the UK, such as shares in a UK company, you might have Stamp Duty Reserve Tax. This is 0.50% of the purchase price.

Your stock broker will let you know if you do need to pay it when you buy shares, and they’ll charge you this as soon as you buy, so it’s all nice and easy. However, most day traders will avoid this by trading CFDs on an online trading platform, so trading the price of an asset, rather than buying assets directly.

And if you do want to buy stock and shares directly, with eToro¹, they’ll actually pay the Stamp Duty for you. How nice is that? (it’s low cost overall too, there's lots of reasons why we recommend them!).

Trading fees

Unfortunately trading and investing isn’t completely free, however with some of the best trading platforms, it’s getting close.

Typically in stock trading, you’ll have an account management fee (or platform fee) to hold your investments, which can range from 0% to 1%+, and then a fee per trade, for instance buying a share, called a share dealing fee.

With trading platforms, there’s none of these fees. In fact, often the only fee you’ll pay is called a spread fee. 

Spread fees

A spread fee is where the broker (trading platform) adds a small markup to the price when you buy or sell.

It means pricing can be pretty competitive among brokers, and cheaper for traders than the traditional pricing model with stock brokers (account fees and share dealing fees). The actual spread fee can vary across all the different types of assets, and even the assets themselves (e.g. different stocks, or different currencies).

It all comes down to the liquidity of the asset, which is how many people are trading at that moment in time (its trading volume).

Don't worry if this is too confusing, the trading platform will show you the cost at the time when you buy (or sell).

Currency conversion fees

You might also have to pay currency conversion fees (also called a foreign exchange fee) if you are buying assets in a different currency to your local currency. For instance, if you want to trade US stocks, such as Amazon, but you only have Pounds (GBP) in your account. 

When you make a trade, the trading platform will convert your Pounds to US Dollars to buy, and for this, they’ll charge a fee. This can range from 0.15% to 1.5% depending on which trading platform or stock broker you use. The best UK trading platforms we’ve listed above, are all some of the cheapest out there (eToro¹ and XTB¹).

Is trading safe?

It’s safe to trade and invest in the UK, and perfectly legal. However, that doesn’t mean you can’t lose money on a trade. It’s always best to use a sensible trading strategy.

Most UK trading platforms are authorised by the Financial Conduct Authority (FCA). They’re the people who make sure financial firms are looking after you and your money properly.

You can check if a trading platform is authorised by the FCA by checking the FCA register. And only use a trading platform that is authorised.

All of the trading and investment platforms we recommend are authorised by the FCA.

This also typically means that your money is protected by the Financial Services Compensation Scheme (FSCS), which protects your deposits up to £85,000 if the broker goes out of business. However, not all trading activities are covered by the scheme. CFDs are however.

Note: FSCS protection doesn’t apply to professional traders. It only applies to retail investors (retail investor accounts), so not the pros.

Should I use a demo account?

Before you deposit real cash, you could also trial a demo account. This is where you use ‘fake’ money to trade. Everything else is exactly the same, so you can still use all the advanced trading tools.

It can be a good idea, but typically the psychological element of risking your own money isn’t there, and so most people typically gamble away their demo account money fast, rather than use a sensible trading strategy as they would with their own money. So it can be a good idea, but just remember this point!

If you think you want to start with a demo account, check out eToro¹.

Let’s recap

That’s it for the best trading platforms for beginners. The top trading platform options out there are:

• eToro
• XTB

All have an awesome trading experience with great trading tools, and are some of the cheapest trading platforms out there. We recommend eToro¹ to start with, it’s easy to get started, and easy to learn how to trade, and to learn about trading in general.

We hope you’ve learnt a lot more about trading in general by reading this, and why CFDs are often used by traders rather than buying assets directly – they’re cheaper, there’s a much wider range of assets, and they have great advanced trading benefits such as leverage trading.

We're not going to lie to you, trading can be tough, so be prepared to lose money, but with patience and a great trading strategy, there’s a lot of money to be made. Good luck out there!