13 min Read
27 Sep 2016

Written by Damien

Damien is one of the most widely quoted money and investment experts in the national press and has made numerous radio & TV appearances. He created MoneytotheMasses.com while working in the City when he became disillusioned with the way the public were left to fend for themselves because they could not afford financial advice.

More about Damien

Best and cheapest investment platform for £50,000 savings

Cheapest investment platform for £50,000

Cheapest investment platform for £50,000

How to choose the best and cheapest investment platform and DIY investing ISA

In this article we provide a definitive investment platform comparison including the:

Investment platforms explained

  • An investment platform is a website or smartphone app where you can buy and sell investments, such as funds, investment trusts, ETFs, stocks and shares
  • They allow you to invest in these assets either directly or via products such as Stocks and Shares ISAs, Junior ISAs or a Self Invested Personal Pension (SIPP)
  • As such investment platforms are also known by other names such as fund platforms, online brokers, fund supermarkets, SIPP providers or ISA providers. For the rest of this article we will call them investment platforms for ease
  • Investment platforms are ideal for DIY investors who want to make their own investment decisions (although some offer discretionary management) and keep investment costs to a minimum. The cheapest investment platform will depend on how much you have to invest and the types of investments you plan to hold
  • Over recent years more investment platforms have entered the market providing the DIY investor with a wealth of investment choice and services whilst driving down the costs involved with investing
  • DIY investors can now enjoy a whole range of tools together with up to the minute research, often available on their smartphone, to help improve their investment returns. This article sets out the cheapest investment platforms and the best investment platforms (as they are not necessarily the same)
  • DIY investing is no longer the preserve of the wealthy as investments can be made for as little as £5 per month, thanks to the competition between investment platform providers

Investment platform providers

  • There are currently over 21 investment platform providers in the UK.
  • Some investment platforms offer only a limited range of investments which you can hold through them while others offer a wider range of investment products
  • When you compare investment platforms it is advisable to choose one that allows investment in shares and/or funds both directly and via a Stocks and Shares ISA, Junior ISA (JISA) or Self Invested Personal Pension (SIPP)
  • Even if you are looking to invest via a SIPP you shouldn't just focus on finding cheapest SIPP provider as you may want to take out a Stocks and Shares ISA in the future. If you hold them both on the same platform it can reduce costs and make administration easier
  • Therefore selecting an investment platform with a broad range of investments available will provide you with flexibility going forward
  • Investment platforms are very different in the charges they levy to manage your investment portfolio so make sure you read the information on charges (including SIPP charges) in this article so you can choose the most cost effective investment platform.

Best investment platforms

Deciding on the best investment platform for you will depend on your personal circumstances and your investment goals. Some are best for those wanting a helping hand, as they offer good tools and guidance, while other investment platforms may be better for monthly savers, for example.

We've have compared over 20 investment platform providers to produce a list of the best and cheapest fund platforms .

Best all-round investment platform

Hargreaves Lansdown - (for a combination of cost, investment choice and customer service)

Best investment platform for beginners (someone else manages your money)

Moneyfarm (lowest cost and will run your first £15,000 for free), Hargreaves Lansdown - ready made portfolios

Best investment platform for monthly savers

AJ Bell Youinvest

Best investment platform for low dealing charges

Charles Stanley Direct

Best investment platform for tools and research

Hargreaves LansdownFidelity Fundsnetwork

Best investment platform for passive investors

Moneyfarm (lowest cost and will run your first £15,000 for free) Nutmeg,

Best trading platform for beginners (wanting to trade shares)

Investing in funds, investment trust, exchange traded funds or shares is a long term investment with an element of risk as investments can go down as well as up. However, some investor are attracted to this higher risk due to the higher rewards available if you are successful with you trading strategy.

For any beginner who is looking to get into a more active style of investing, and in particular investing in shares directly, below is a list of the best trading platform for beginners.

For this research I have assumed an investment of £10,000 invested in a maximum of 20 shares with 100 annual trades, all outside of any wrapper such as an ISA. I have only selected investment platforms that provide the following:

  • Tools
  • Research
  • Model portfolios
  • Available on smartphone

The research narrowed down the choice to the following 3 investment platforms. I list them by their net annual cost.

  1. Bestinvest (8.79%)
  2. Interactive investor (11.96%)
  3. Hargreaves Lansdown (15.91%)

Cheapest share ISA provider - for those buying only shares inside an ISA

A number of ISA investment platforms will allow investment directly into company shares. Investing directly in shares will increase the risk element of your investment portfolio as company shares can be more volatile than investing in funds.

To find the cheapest investment platform for investing in shares I assumed a portfolio of £15,240 (ISA allowance 2016/17 tax year) holding 10 shares with 10 annual trades and for this example I have only selected investment platforms that provide the following:

  • Tools
  • Research
  • Model portfolios
  • Available on smartphone

The research narrowed down the choice to the following 3 investment platforms. I have also provided the individual net annual cost.

  1. Interactive Investor (0.56%)
  2. Bestinvest (0.82%)
  3. Hargreaves Lansdown (0.94%)

Best investment platform for £50,000 investment

To find the best investment platform for a portfolio of £50k I have only selected investment platforms that provide the following:

  • Tools
  • Research
  • Model portfolios
  • Available on smartphone

In making the final choice I did not want to be influenced by cost alone as you should also assess each investment platform on the 4 criteria listed above to make sure you choose the best fit for your needs. For the benefit of this research I have also assumed that the investment is in a maximum of 10 funds with a maximum of 10 annual trades invested over 10 years

The research narrowed the choice down to the following 4 investment platforms which I list together with the individual net annual cost.

  1. Interactive Investor (0.18%)
  2. Fidelity (0.35%)
  3. Bestinvest (0.4%)
  4. Hargreaves Lansdown (0.45%)

Cheapest investment platform for £50,000 investment

If you are only interested in keeping costs low, rather than tools and research, you simply need to compare the charges of each investment platform. However, the cheapest investment fund platform depends on the size of your proposed investment and/or existing portfolio as well as the type of investments you want to hold. No one fund platform will be the cheapest for everyone. Therefore you need to compare the charges of every investment platform provider taking the aforementioned factors into account. You can do this easily using this  investment platform comparison calculator to compare over 20 different investment providers to find the cheapest investment platform for you. Simply enter your investment amount as £50,000 and select the types of investments you may want to buy (as well as whether they will be within an ISA or SIPP or both) to find out the investment platform with the lowest charges.

Best way to invest £50,000 short term

Investing in funds or shares is a medium to long term investment (in excess of 5 years). Stock markets can be very volatile and investing for the short term is not advised as your investment could reduce in value due to circumstances beyond your control.

If you are looking to invest for the short term than accounts offered by bank and building societies are probably your best option. Click on this link for more information and useful comparison table - Savings Best Buy Tables.

If you want to invest for the long term and don't know which funds to pick then our 80-20 Investor service will be of interest.

Cheap SIPP providers

Of course you may only be interested in finding the cheapest SIPP provider as you have no intention of investing via a Stocks and Shares ISA as well. A Self Invested Personal Pension (SIPP) is a a popular way of DIY investing to provide an income in retirement. However, trying to choose the best SIPP provider for your circumstances can seem quite daunting.

The cheapest SIPP for you depends on the size of your proposed investment and/or existing pension pot as well as the type of investments you want to hold. Use our SIPP provider comparison tool to compare over 20 different investment providers in order to find the cheapest platform for you.

In the meantime, I have carried out research to highlight the cheapest SIPP providers when focusing primarily on cost.

For the benefit of this research I have assumed a lump sum investment of £15,000 plus regular monthly payments of £250. I have also allowed for 10 annual trades invested over 25 years

The following SIPP providers are the cheapest. The number in brackets represents the net annual cost:

SIPP Provider Comparison Tool

The cheapest SIPP depends on what investments you want to hold within your SIPP as well as the size of your SIPP. Therefore you have to compare SIPP charges for your given pension pot size which isn't easy to do. That's why we provide the best SIPP provider comparison tool online as it compares more SIPP providers than any other. Simply enter your pension size and it carries out a comparison of SIPP charges and fees in seconds

Best SIPP provider

However if you are not just focused on SIPP charges then below is a list of the best SIPP providers:

Best SIPP provider for range of investments

Hargreaves Lansdown

Best SIPP for monthly investors

Bestinvest

Best SIPP provider for low dealing charges

Cavendish Online

Best SIPP provider for tools and research

Hargreaves Lansdown, Fidelity

Best SIPP provider for model portfolios

Nutmeg, Hargreaves Lansdown, Fidelity

 

Looking for a financial adviser near you?

Do you need financial advice? An independent financial adviser can show you how to make the most of your money.

Simply find your nearest qualified and regulated adviser using the UK’s largest adviser search.