Vanguard introduces a monthly minimum account fee
From the 31st January 2025, Vanguard customers who self-manage their Stocks and Shares ISA, General Investment Account or Personal Pension (SIPP) will be charged a minimum fee of £4 per month, irrespective of how much they have invested with Vanguard. Currently, Vanguard customers pay just 0.15% on the total balance of their investments, capped at £375 per year. It means that those with a modest portfolio of £5,000 will see fees rise from £7.50 to £48 per year and those investing their full ISA allowance of £20,000 will see fees rise from £30 per year to £48 per year from 31st January 2025. The account fees for balances over £32,000 are unchanged, meaning those with portfolios larger than £32,000 will not be hit by any additional fees. There are no changes to the Vanguard Junior ISA and account fees remain capped at £375 per year.
Here is how the changes to Vanguard's fees will impact different investment amounts:
| Total balance of investments | Vanguard fees prior to 31st January 2025 (Annual) | Vanguard fees after 31st January 2025 (Annual) |
| £500 | £0.75 | £48.00 |
| £1,000 | £1.50 | £48.00 |
| £5,000 | £7.50 | £48.00 |
| £10,000 | £15.00 | £48.00 |
| £20,000 | £30.00 | £48.00 |
| £50,000 | £75.00 | £75.00 |
| £250,000 | £375.00 | £375.00 |
The way account fees are charged at Vanguard are changing
In addition to introducing a minimum account fee, Vanguard is also changing how the account fees are charged from 31st January 2025. Currently, Vanguard customers who do not pay their fees by direct debit have their fees taken from their General Investment Account, if they have one. From 31st January 2025, account fees will be taken from the different investment accounts in proportion to their invested balances. The image below provided by Vanguard explains how this works in principle.
Vanguard states that setting up a direct debit will help to simplify this process as fees will be deducted directly from the investor's bank account and removes the risk of having to sell funds in the relevant investment accounts in order to cover the fees.
Changes to withdrawals and transferring out of Vanguard
Vanguard will also be changing the way that it processes withdrawals and transfers to other providers from 31st January 2025. Currently, if customers request a full withdrawal or a full transfer to another provider, the full amount is sent and it is up to the customer to fund their account when the fees are next due. From 31st January 2025, Vanguard will first take any fees due, before proceeding with the withdrawal or transfer request. If there is any interest due on any cash held, this will also be paid prior to the full withdrawal or transfer. Vanguard does not charge any withdrawal or transfer fees and this remains unchanged from 31st January 2025.
Closing your Vanguard account
Vanguard has stated that those unhappy with the changes are free to close their account. For invested balances, investors will have to sell the funds before the balance can be withdrawn. The sale of funds can take between 2 and 4 working days and then a further 1 to 3 working days to reach the associated bank account. Once the funds have been withdrawn, you will need to send a secure message to Vanguard via the messages tab. The account will be placed in a 'closing' status for 3 months, so that you can still access documents etc.
Alternatives to Vanguard
Those unhappy with the changes may also want to consider the alternatives. Investors are free to transfer their balance to another provider but be mindful that ISA transfers typically take 30 working days and in some circumstances, can take a little longer. Pension transfers can take between 10 working days and in some cases 10 weeks or more. Below, we provide a comparison table of the best alternatives to Vanguard. For a more in-depth analysis of the best Vanguard alternatives, check out our article 'Top 5 alternatives to Vanguard'.
Stocks and Shares ISA cost comparison table
The table below compares the cost of investing in an ISA via 5 of the top investment platforms in the UK. The costs include Vanguard's minimum monthly fee of £4, which is in effect from 31st January 2025.
| Vanguard fees from 31st January 2025 (Annual) | AJ Bell Dodl* | Interactive Investor* | Freetrade* | InvestEngine* | |
| £500 | £48.00 | £1 | £59.88 | £59.88 | £0.00 |
| £1,000 | £48.00 | £1.50 | £59.88 | £59.88 | £0.00 |
| £5,000 | £48.00 | £7.50 | £59.88 | £59.88 | £0.00 |
| £10,000 | £48.00 | £15.00 | £59.88 | £59.88 | £0.00 |
| £20,000 | £48.00 | £30.00 | £59.88 | £59.88 | £0.00 |
| £50,000 | £75.00 | £75.00 | £59.88 | £59.88 | £0.00 |
| £250,000 | £375.00 | £375.00 | £143.88 | £59.88 | £0.00 |
| Further info | Vanguard currently charges a platform fee of 0.15%, capped at £375 pe year. From 31st January 2025 it will introduce a minimum monthly fee of £4 per month for its ISA, General Investment Account and Personal Pension (SIPP) | AJ Bell Dodl charges a platform fee of 0.15% and has a minimum monthly fee of £1 per product. Unlike Vanguard, it does not cap its monthly fees. Check out our full independent AJ Bell Dodl review | Interactive Investor charges a monthly subscription fee. Those investing less than £50,000 are charged £4.99 per month, those investing over £50,000 pay £11.99 per month. Check out our full independent Interactive Investor review. | Freetrade offers 3 plans; a basic, standard and plus plan. The costs above are for its standard plan which allows you to invest via a Stocks and Shares ISA. Check out our full independent Freetrade review. | InvestEngine does not charge a platform fee to customers investing in its DIY portfolios. Investors can choose a managed ISA or one of its LifePlan portfolios (similar to Vanguard's LifeStrategy funds) and these attract a management fee of 0.25%. Check out our full independent InvestEngine review. |
If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Interactive Investor, AJ Bell Dodl, Freetrade, InvestEngine
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