- The government has indicated that fractional shares will be allowed in Isas
- They offer diversification and flexibility but are not widely available
Fractional shares will officially become a permitted investment in Individual Savings Accounts (Isas), the government said in last week’s Autumn Statement, in a welcome move for young investors. The ability to buy portions of shares makes it easier for small investors to gain exposure to expensive stocks, especially those listed in the US.
But there are pros and cons to using fractional shares. Only a handful of platforms offer them at all. Freetrade, Moneybox and Trading 212 are the main platforms where investors can hold fractions in Isas, and they have been locked in a dispute with HMRC over whether the current rules allow it. The Autumn Statement did not contain the full details on how Isa rules will change, only stating the government’s intention to “engage with stakeholders on implementation”.