What percentage of Brits understand how Stocks and Shares ISAs work? The answer might surprise you.

A 2025 Natwest survey asked 10,000 people across the country a variety of questions on saving and investing. It found the number of people who understood how Cash ISAs work was 50%.

On the other hand, the number of people who understood how a Stocks and Shares ISA works is just 25%. That means that up and down the nation, three out of every four people don’t know how to invest in the stock market while taking advantage of the tax-free benefits of these accounts.

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This is a crying shame, isn’t it? After all, the stock market might not be suitable for all investors but it’s got the best long-term track record of increasing money invested. And, in the Stocks and Shares ISA, Brits have perhaps the best investing vehicle in the world!

Certainty

I imagine something else that might come as a shock to the other 75% in the statistic is that investments can be made in all manner of companies – even ones they use regularly! The nation’s biggest supermarket Tesco (LSE: TSCO) might be one of the best examples for this.

Tesco shares currently change hands for just over £4 a piece. Investors could get started owning the company with even a small starting investment. Those investors could expect (based on current forecasts) to receive 3.22% in dividends in the first year alone.

The share price is less certain. Ups and downs are par for the course here. The last year hasn’t been bad for the big shop, with the shares up 13% in value or so.

Investing in stocks like this always comes with risk as well. In Tesco’s case, the 2014 accounting scandal rocked the company. The value of the shares fell by 50% in the aftermath.

In practice

What might this kind of Stocks and Shares ISA approach look like in practice? Well, it all comes down to a few key variables like savings rate, return rate, and time invested.

The same Natwest study found the average (median) savings in the UK was £226 a month. While many of those surveyed were saving for holidays or house deposits, that’s more than enough to get a Stocks and Shares ISA up and running.

Return rate is trickier because we don’t have a crystal ball to predict the future. Around 9% to 10% is what the long-term yearly return is, but an economic crisis or an AI revolution could shift that figure higher or lower in the decades to come.

As for time invested, the longer the better. Those nearer the start of their investing timeline could easily have 30 years before they want to start withdrawing an income from the Stocks and Shares ISA. This amount of time allows the kind of nest egg to be built up that can deliver serious passive income.