Picking individual stocks can be challenging, especially for beginners with limited funds who might find the process overwhelming. However, several accessible methods are available to simplify the process of choosing the best stocks for beginners with little money.
This guide highlights some of the top UK stocks suitable for beginners and, importantly, outlines key factors and potential pitfalls to be aware of when selecting shares. Beginners should understand a company’s business, evaluate its financial stability, and be mindful of the risks, such as potential losses and market volatility.
eToro Review
- Trade the most popular cryptocurrencies with a simple interface
- Deposit with debit, credit, PayPal or bank transfer
- Invest in stocks, ETFs, gold and bonds from the same account
The best UK stocks for beginners with little money – A quick look
With thousands of stocks to choose from, it’s important for beginners to start with stocks that they understand, offer growth potential, and align with their financial goals. Following are our picks of the best UK stocks for beginners with limited funds:
- AstraZeneca: The largest pharmaceutical company in the UK is based in Cambridge and has a large portfolio of therapies for oncology, cardiovascular and gastrointestinal conditions, neuroscience and inflammation.
- Marks & Spencer: Britain’s fastest-growing supermarket with more than 1,000 stores in the UK and around 430 other locations worldwide.
- Admiral Group: The financial services group, based in Cardiff, Wales, is the leading motor insurance carrier in the UK. It also delivers household, travel and pet insurance, as well as personal lending products.
- Unilever: A fast-moving consumer goods company with around 400 brands, including Lifebuoy, Dove, Axe, and Sunsilk.
- Tesco: The UK’s most popular grocer with a consistent share of more than 28% percent of the market..
- GSK: The London-based pharmaceutical giant, formerly known as GlaxoSmithKline, has a huge pipeline of therapies and is coming off a promising first-quarter.
- British American Tobacco: The second-largest tobacco company in the world is a value stock that has increased its dividend for 27 consecutive years.
- Diageo: One of the largest alcohol companies in the world with more than 200 brands and sales in nearly 180 countries.
Your capital is at risk.
- Show Full Guide
The best UK stocks for beginners with little money: A closer look
Now that you know what we’ve selected as the best UK stocks for beginners with little money, let’s understand what makes them particularly suitable for beginners:
1. AstraZeneca (AZN): Portfolio paying off with increased revenue
Overview
The pharmaceutical company is the second largest on the London Stock Exchange (LSE) by market value and continues to show growth, particularly from its stable of oncology therapies. Its strong success rate among Phase 3 trial candidates has led to 13 new approved therapies since February.
Why AstraZeneca is one of the best UK stocks for beginners with little money
AstraZeneca trades at just over £101.33 per share, with the consensus one-year target price among analysts at £133.77. The was off to a solid start to the fiscal year and has a huge pipeline of therapies. In addition, thanks to the opening of a new $300 million cell therapy manufacturing plant in the US, part of a planned $3.5 billion investment in US facilities, is well-placed to dodge tariff concerns that could trip up its competitors.
One nagging area of concern is China, where the company’s business is under investigation for allegedly illegally importing some of its drugs.
In the first quarter, the company had revenue of $13.6 billion, growing 7% year over year. Earnings per share (EPS) rose 21% $2.49, up 21% The growth was due to improved sales in its oncology and biopharmaceutical therapies.
The drugmaker issued conservative guidance, based on those numbers, to say it expects high single-digit revenue gains this year and low double-digit growth in EPS. The company also raised its total dividend by 7% to $3.10, giving it a yield of around 3.06%.
The company said it has had five positive late-stage, phase III trials in the quarter and is awaiting readouts on other phase III trials on therapies that could be worth as much, combined, as $10 billion in peak annual sales.
Your capital is at risk.
2. Marks & Spencer (MKS): Enjoying investors’ trust despite dip in consumer confidence
Overview
Marks & Spencer Group operates various retail stores that provide deli and dairy products, an in-store bakery, general groceries, womenswear, menswear, kidswear, home products, and financial services.
Why Marks & Spencer is one of the best UK stocks for beginners with little money
Marks & Spencer stock is down about 8% this year but up about 276% over the past five years, far outperforming the FTSE 100. In the first half of fiscal 2024, it posted revenue of £6.5 billion, up 5.8%, year over year, and EPS of 14 pence, up 32% from the same year-earlier period.
Being a consumer company, Marks & Spencer has faced economic challenges, including inflation and low consumer confidence. Still, it has been successful in making changes to push its growth forward, including boosting its in-store and online presence.
The success of Marks & Spencer’s turnaround strategies is evident from the investor confidence it enjoys and the fact that it’s now Britain’s fastest-growing supermarket. According to Kantar figures, the company is beating the competition on both value and volume.
Additionally, data reveals that a third of UK households are now buying groceries at Marks & Spencer following the company’s commitment to improve the quality of its products. The growth is expected to continue as the company continues to reinvent its shelf products to make them better and different from others.
Your capital is at risk.
3. Admiral Group (ADM): Strong growth, great brand presence
Overview
Admiral (LSE:ADM) enjoys strong brand recognition as the leading car insurance company in the UK and markets the Admiral, Bell, Elephant, Diamond and Veygo insurance brands, in addition to price comparison services Confused.com and Compare.com. It has more than 11.1 million customers across the countries of the UK, France, Italy, Spain and the US.
Why Admiral is one of the best UK stocks for beginners with little money
The insurer has only been around for a little more than 30 years but is as stable as it gets. Plus, it’s trading at around £33.30 per share, less than 16 times earnings, about average among industry peers.
Admiral closed fiscal 2024 with record profits, lifted by its motor insurance arm, thanks to competitive pricing that allowed it to add 1.4 million customers last year and mitigate falling premiums.
It said it had pre-tax profit of £839.2 million ($1.08 billion), up 90% from 2023. It’s using AI to cut costs and drive efficiency, partnering with Google Cloud to produce more personalised products and services for customers.
Over the past three years, Admiral has had a total return of 65.77%. The company’s twice-yearly dividend yields 4.29% and it has recently raised its interim dividend by 126% to £1.21. The stock is up more than 25% so far this year.
Your capital is at risk.
4. Unilever (ULVR): A staple brand with more growth to come
Overview
Unilever is a fast-moving consumer goods company that operates through several segments, including Personal Care, Home Care, Beauty & Wellbeing, Nutrition, and Ice Cream.
Why Unilever is one of the best UK stocks for beginners with little money
Unilever stock is up over 2.8% this year and 15.8% over the past five years, suggesting stable investor confidence in this multi-brand company. This year’s first quarter showed that revenue fell 0.9% year over year to €14.8 billion, but the company said it expects 3% to 5% growth in sales this year with minimal impact from tariffs.
Unilever has transcended the status of most companies, with its products having become a necessity for many consumers. The company, which owns several brands, including Knorr soups and sauces, Hellmann’s mayonnaise, Axe, Dove, and more, has shown top-line performance despite global macroeconomic uncertainty.
Unilever’s strategy of increased brand investment and scaling fewer, bigger innovations is paying off well. Though the company is struggling in some markets, such as Indonesia and China, it’s making strides in other key emerging markets.
In addition to strengthening its brand, the company is also focusing on controlling its cost, and this has helped boost its gross margin lately. All such strategies put the company on the right growth track for the foreseeable future.
Your capital is at risk.
5. Tesco (TSCO): UK grocer set to outperform growth expectations
Overview
Tesco is a grocery retailer that operates in the UK, Slovakia, Hungary, Republic of Ireland, and the Czech Republic. The company offers its products offline and online and also deals in food and drink wholesaling activities.
Why Tesco is one of the best UK stocks for beginners with little money
Tesco is an industry leader and a go-to store for 51% of online grocery orders in the UK. Its shares are up about 1.3% this year and around 26% over the past five years. The stock trades for less than 17 times earnings, this is slightly higher than the consumer staples industry average of about 11 times.
This growth comes despite rising interest rates pushing consumers towards low-cost chains such as Aldi and Lidl. Tesco has kept up by adding more than 1,600 new or improved products in 2024.
Tesco has shown excellent stability and resilience despite rising competition and economic uncertainty, making it an excellent stock for beginners to consider. According to Kantar data, its market share is above 28%, well ahead of the UK’s second most popular grocer, Sainsbury’s.
Tesco is also undertaking cost cutting and productivity improvements measures, and this has helped the company grow its full-year sales by 3.5% to £63.6 billion.
EPS rose by 42% to 23.51p, though that includes items that are now discontinued. Still, adjusted EPS was impressive, rising 17% to 27.38 pence. Another thing that makes the grocer popular among investors is its recent 13.2% hike in interim dividend to 13.7 pence, giving it a dividend yield of around 3.63%.
Your capital is at risk.
6. GSK: Pharma giant is a well-priced, stable earner
Overview
The company is the second-largest pharma company in Great Britain, based on market cap. It’s making up for falling vaccine sales with increased revenue from its cancer and respiratory therapies.
Why GSK is one of the best UK stocks for beginners with little money
The well-established pharmaceutical company is trading at less than £13.77, and after falling almost 2% this year, is trading for around 18 times earnings, roughly average among peers. This is in spite of the fact that the company said it expects sales to increase by 3% to 5% in 2025 with core earnings rising 6% to 8%.
In the first quarter, GSK reported revenue of £7.5 billion, up 2%, year over year, with EPS of 39.7 pence, which rose 55% from the same year-earlier period.
The growth drivers include specialty medicines sales of £2.9 billion, up 17% year over year, respiratory, immunology and inflammation drugs sales of £0.8 billion, up 28% on the same period last year, and oncology sales of £0.4 billion, up 53%, year over year.
Another bonus for beginners is GSK has a quarterly dividend of 16 pence that yields around 4.31%. That makes it easier to stick around for the company’s burgeoning pipeline.
It has already had three new FDA drug approvals this year, led by multiple myeloma drug Blenrep, which is said to be worth $1.5 billion a year in sales by next year. The company’s exposure to recent US tariff hikes is small since it is on track for its sixth manufacturing plant in the US.
Your capital is at risk.
7. British American Tobacco (BATS): High-priced stock with potential growth opportunity
Overview
British American Tobacco offers tobacco and nicotine products to consumers worldwide through several popular brands, including Vuse, glo, Velo, Grizzly, Kodiak, Dunhill, Kent, Natural American Spirit and more.
Why British American Tobacco is one of the best UK stocks for beginners with little money
British American Tobacco is one of the largest tobacco companies in the world. Though its share price is on the higher side (above £31.91) for beginners with little money, it’s still on our list of best stocks for beginners because of its potential growth. Its shares are up a little more than 8% so far this year.
With declining global cigarette consumption continuing to be a setback for the world’s second-largest tobacco company, the company is making efforts to offset this decline by investing in next-gen nicotine-related products that pose lower risk.
BATS’ effort seems to be paying off, as its stock is up almost 9% this year. The company reported preliminary 2024 full-year revenue of 25.87 billion, down 4.7%, Even so, EPS grew to 136 pence after a loss per share of 646 pence in 2023.
The company has been able to raise prices, but it is struggling in some markets as buyers are shifting from expensive cigarette brands to cheaper alternatives
Another thing that makes BATS popular among investors is its attractive dividend yield of around 7.66%, which is more than six times the average yield of companies in the S&P 500 index (around 1.27%) and of average consumer-staples stocks. The company raised its quarterly dividend by 2% this year to 58.88 pence.
Though the tobacco firm is raising the prices of its products to offset the decline in volume, we believe its high dividend yield is what makes investors stick to the stock. If the company is able to sustain the yield and revenue, it could become the top choice of investors for many years to come.
Your capital is at risk.
8. Diageo (DGE): A steal at its current price
Overview
Diageo is one of the largest alcohol companies in the world and operates in 132 countries worldwide. The company owns some of the most popular brands in the segment, including Johnnie Walker, Guinness, and Smirnoff.
Why Diageo is one of the best UK stocks for beginners with little money
Diageo’s stock is down more than 14% this year and 21% in five years, but we still believe it’s one of the best shares for beginners. A primary reason for its downfall is the profit warning issued last year following the drop in Latin American & Caribbean sales, but things seem to be slowly improving.
Financial challenges pushed many consumers away from the higher-end brands, including Diageo, towards cheaper alternatives. Though this trend remains a threat, the company seems to be slowly recovering from this. One star is its Guinness brand, which has delivered double-digit growth for eighth consecutive halves.
The stock is attractive because it is trading at less than 18 times earnings, favourable compared to most of its peers. With premium brands under its umbrella, the company promises stable growth in the long term, especially when there are further interest rate cuts, which in turn boost spending. In the meantime, patient investors can enjoy its dividend, which yields roughly 3.57%.
Your capital is at risk.
Stocks and shares refer to units of ownership in publicly listed companies. The owners of stocks and shares are called shareholders, who get voting rights and dividends. Though the term shares and stocks are used interchangeably, there is a technical difference between them.
The term stock usually refers to the portions of ownership in one or more companies. For example, Mr. A owns stock in Apple and Amazon.
Shares, on the other hand, refer to a person’s ownership percentage in a particular company. For example, Mr. A owns 40 Apple shares.
How to invest in UK stocks for beginners
Knowing the best stocks for beginners with little money isn’t enough to start investing. Investors need to consider a few more things to help them invest efficiently in UK stocks.
1. Set achievable financial goals: Having a financial goal is very important. It helps you to focus your investment efforts to achieve those objectives.
2.Select a broker: It is always recommended that you invest in a stock market through a registered broker or a robo-advisor. When selecting a broker or a robo-advisor, selecting a reputed service provider with 24/7 customer support is important.
3. Pick a type of investment account: Whether you are investing through a broker or robo-advisor, you need an investment account. There are several types of investment accounts to choose from, such as a Roth IRA, which offers tax benefits.
4. Set a budget: A new investor always faces this tough question – how much money should I invest in stocks? Thus, you must set a budget beforehand and stick to it.
5. Test with virtual funds: Before you put your hard-earned money at risk, it is recommended that you test your investment strategy with fake money. Several brokers allow users to test their trading skills with virtual money.
Types of stocks to look out for as a beginner
If you are just starting in the stock market, there are a few categories that are well-suited for beginners. Though not all stocks in these areas are good buys, they can serve as a great start in your search for returns.
Dividend stocks
Dividend stocks are shares of companies that offer regular dividends to their shareholders. These stocks provide steady income and potential capital appreciation and are thus appealing to beginners.
Blue chip stocks
Blue-chip stocks are the shares of well-established companies that have stable earnings. Such stocks are usually safe bets as these companies are typically leaders in their respective industries. Moreover, such stocks are reliable and are less volatile than the shares of smaller, less established companies.
Growth stocks
Growth stocks are the shares of companies that are expected to grow at an above-average rate compared to other companies in the same category. Though growth stocks can be more volatile than blue-chip stocks, they offer significant capital appreciation opportunities.
Type of stocks to avoid for beginners
Some share categories may include cheap stocks or ones promising fast price appreciation that beginners would be well advised to avoid due to their risky nature. The following types are best suited for experienced investors with higher tolerance for risk:
Penny stocks
Penny stocks are low-priced stocks with lower market capitalizations. Beginners with a small amount of money can buy a good quantity of penny stocks. These stocks can offer attractive returns even with little appreciation in their value.
Often, though, they are cheap for a reason and these companies are new and untested, have limited trading volume, or lack substantial financial history or information. Therefore, they are highly speculative in nature.
Meme stocks
Meme stocks are the shares that have gained widespread popularity among retail investors because of social media hype. Similarly to penny stocks, they are highly speculative investments and may be too risky for beginners.
The performance of these stocks is primarily influenced by social media and is not backed by their fundamentals. These stocks usually gain popularity among new investors, resulting in short-term gain in their price.
An ISA or Individual Savings Account is a tax-free way to grow your savings, as the interest you earn from this account is not taxable. It is a good way for beginners to save some money while growing their investments. Some of the best stocks and shares ISAs for beginners are:
AJ Bell
AJ Bell stocks and shares ISA allow investors to invest with as little as £25 a month, or invest a lump sum. Investors are free to choose their own investment, or select from AJ Bell’s ready-made portfolios. They also have a mobile app to help investors track their investments.
Vanguard
Vanguard stocks and shares ISA is easy to open and the fees are low as well. Investors can either select their own funds or funds to invest in or choose from Vanguard’s Managed ISA. Additionally, investors get 24/7 access to their funds and help from a UK-based customer service team and more importantly, there are no hidden charges.
Hargreaves Lansdown
Hargreaves Lansdown ISA allows investors to check their investments with its app or website easily. Here also investors can pick their investment or choose from the platform’s ready-made portfolios. Investors can select from over 3,000 funds and can invest as little as £25 a month (or £100 lump sum).
Nutmeg
Nutmeg offers low-cost options compared to other managed investment funds. It is a good option for passive investing and for investors with little knowledge about the workings of the stock market. Nutmeg’s investment portfolios are well-researched and are looked after by prominent investing experts
Methodology – How we chose the best stocks for beginners with little money
When selecting the best stocks for beginners, we scanned the portfolios of many successful beginner investors to get an idea of the type of stocks they considered. Additionally, we considered the following factors when picking the best stocks for beginners with little money:
- Dividend yield: Stocks that offer regular dividends scored high on our list. Dividend-heavy stocks ensure a regular and stable income for investors.
- Growth potential: A company exhibiting above-average growth potential is more likely to earn higher returns for investors. Moreover, a stock with growth potential is usually less risky, and thus, is good for beginners.
- Volatility: Stocks with higher volatility have the ability to offer big returns, but are riskier as well. Thus, we gave preference to stocks with lower volatility as lower price fluctuations help beginners to avoid emotional decision-making.
- Share price: Beginners usually have less money, and thus, may not afford to buy too many shares of companies whose share price is on a higher side. So, we gave more preference to stocks with lower market prices unless they exhibit remarkable growth potential.
- Brand recognition: We considered companies that are well established and well-known. It is very important for beginners to invest in companies that they can easily understand and follow.
FP Markets, a globally recognized CFD multi-asset brokerage, stands out as one of the best places to buy UK stocks in 2025. Offering access to CFD trading on a wide range of financial instruments, FP Markets enables traders to invest in nearly 1,000 London-listed stock CFDs, making it a top choice for those looking to trade UK shares efficiently.
FP Markets provides traders with access to some of the UK’s most well-known companies, including HSBC, Lloyds Banking Group, Vodafone, Barclays, EasyJet, and Tesco. These stocks span multiple industries, allowing investors to diversify their portfolios and take advantage of market movements.
One of the key advantages of trading UK stock CFDs on FP Markets is its competitive commission-based pricing model. The platform charges a transaction fee of 0.10% of the trade value, with a minimum commission of £10 per transaction. This transparent pricing ensures traders can manage their costs effectively while benefiting from FP Markets’ tight spreads and deep liquidity.
Beyond trading, FP Markets supports its users with extensive educational resources, including webinars, market insights, and trading articles, helping traders make informed decisions. Additionally, the platform offers convenient funding options with no deposit fees, accepting PayPal, Skrill, Neteller, and bank transfers, making it an accessible and cost-effective choice for UK stock trading in 2025.
Conclusion
The stocks discussed above may be a great place to start your investing journey and build your portfolio.
However, it’s important to remember that good investing is not always about buying the best stocks. Sometimes, good investing also means avoiding stocks that can compromise your entire portfolio.
Additionally, finding the best stocks for beginners is about figuring out the best investment approach for you, what platform works best for you, and your risk tolerance.
FAQs
Where to invest money in the UK for beginners with little money?
What are the best stocks to buy for beginners with little money?
Can I invest 100 pounds in the stock market?
What questions should beginners ask if they’re interested in a particular stock
Can I invest in stocks without a broker?
References
AstraZeneca first-quarter earnings
Marks & Spencer first-half report
