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5 top UK shares I’d buy now in a Stocks and Shares ISA and hold forever

Peter Stephens
·3-min read
Chart displaying growth
Chart displaying growth

Investing in UK shares via a Stocks and Shares ISA is a logical means of capitalising on the stock market’s future growth prospects. ISAs offer tax advantages, since no tax is levied on any capital gains or dividends received through them. Similarly, they’ve no withdrawal penalties, and are cheap and simple to set up.

With many UK stocks offering long-term growth potential, now could be an opportune moment to add them to an ISA. Here are five such companies that may have brighter futures than the stock market is anticipating.

UK shares with uncertain near-term futures

Some UK shares face uncertain near-term futures that could make them attractive buys for long-term investors. For example, companies such as easyJet and Standard Chartered face challenging operating conditions caused by the economic impact of coronavirus. This is likely to have been behind their 45% and 27% respective share price declines in the past year.

However, with easyJet having strengthened its financial position and Standard Chartered having exposure to economies with long-term growth potential, they may deliver stock price recoveries. Although further volatility could be ahead, many of their risks may already be factored into their low prices.

Housebuilding opportunities in the FTSE 350

Housebuilders such as Berkeley and Bellway could also offer improving performances relative to other UK shares in the coming years. They’ve experienced disruption from lockdown measures put in place at various times in the last year. They may also experience a dip in demand for new homes, since a weak UK economic outlook could limit improvements in consumer confidence.

However, their solid balance sheets and low interest rates may offer support during an uncertain period for the housebuilding industry. The sector’s past performance shows it has always recovered from its various downturns in previous decades. Although the current crisis may be more extreme than other challenging periods, investors may be able to capitalise on sustained high demand for new homes as the economy recovers.

Dividend opportunities in a period of low interest rates

Investing in UK shares with high yields could also be a sound move right now. Dividend shares could become increasingly popular in the coming years as a result of low interest rates pushing income investors away from assets such as cash and bonds.

United Utilities currently has a dividend yield of 4.7%. The company’s dividend growth rate could be at risk from regulatory issues. But its high yield relative to other FTSE 100 shares suggests that this may be factored in by investors.

Since the company has a defensive business model, its share price may also gain ground in what is an uncertain period for the UK economy. This could increase demand for its shares and lead to an impressive total return.

The post 5 top UK shares I’d buy now in a Stocks and Shares ISA and hold forever appeared first on The Motley Fool UK.

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Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has recommended Standard Chartered. 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.

Motley Fool UK 2021