From the Learn Hub
Learn Hub
Loss definition
When an investment drops in value from its purchase price.
What is a loss in investing?
A loss happens when an investment drops in value, meaning you’d get back less than you originally put in if you sold at this point. Just like with gains, losses can be unrealised or realised:
- Unrealised loss: when your investment is worth less than what you paid, but you haven’t sold it yet. The loss only exists on paper.
- Realised loss: when you sell an investment for less than what you paid, locking in the loss.
For example, if you buy a stock for £100 and its price falls to £80, you have a £20 unrealised loss. If you sell it at £80, that loss becomes realised. While losses aren’t fun, they’re a normal part of investing – many investors hold onto their assets in hopes of a recovery.
Investing glossary
It's important you know
Capital at risk. All investing should be for the longer term. The value of your investments can go up and down, and you may get back less than you invest. Tax treatment depends on individual circumstances and may be subject to change in the future.
A 25% government penalty applies if you withdraw money from a Lifetime ISA for any reason other than buying your first home (up to £450,000) or for retirement, and you may get back less than you paid into your Lifetime ISA.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Payments you make into your pension won’t be accessible until the minimum pension age (currently 55, increasing to age 57 from 2028). Tax treatment depends on individual circumstances and may be subject to change in the future.