In this article, we reveal the cheapest Stocks and Shares ISA in the UK, based on a number of different investing scenarios including the cheapest managed Stocks and Shares ISA for beginners, the cheapest Stocks and Shares ISAs based on tools, functionality & investment choice and also the cheapest Stocks and Shares ISAs for share trading.
1 minute summary - The cheapest Stocks and Shares ISA
- Self-invested ISA – If you want to manage your own investments then investment platforms Interactive Investor* and Hargreaves Lansdown* provide an excellent selection of tools and investment choice so you can create your own DIY Stocks and Shares ISA
- Managed ISA – If you'd rather let someone run your money for you at low cost then you may want to consider using a service such as Moneyfarm*, Wealthify, or Nutmeg
- If you want to access your money within the next five years then you would be better off placing your money in a Cash ISA
Cheapest Stocks and Shares ISAs – Our top picks
Below we highlight our top picks for the cheapest Stocks and Shares ISAs. However, we provide full Stocks and Shares ISA comparison tables later in this article in which we compare costs of the major ISA providers to help you determine the cheapest Self-invested ISA or Managed ISA for you. At the foot of this article, we also provide an explanation of how to compare and choose a Stocks and Shares ISA.
Don't forget that if you need access to your money within the next five years then you would be better off placing your money in a Cash ISA. In this instance see our section titled the Best Cash ISA.
Cheapest Stocks and Shares ISA for beginners
Novice investors will most likely be looking for someone to invest and manage their money for them. A managed ISA is a cost-effective way to invest and our top picks include:
Check out our full independent Moneyfarm review
Cheapest Stocks and Shares ISA for tools & investment choice
If you are looking to run your own investments then the following a Self-invested ISAs are among the cheapest. We provide a full cost comparison of all the major ISA providers later in this article.
Check out our full independent Interactive Investor review
Check out our full Hargreaves Lansdown review
Check out our full independent Vanguard Investor review
Cheapest ISA for trading shares
For those wanting to trade shares, our top picks may want to consider:
Check out our full independent Freetrade review
Check out our full independent Trading 212 review
Which is the cheapest Stocks and Shares ISA provider?
Ultimately the cheapest Stocks and Shares ISA for you depends on whether you want to manage your own money or get someone else to do it, what type of investments you want to hold, the frequency at which you want to make changes and the size of your portfolio. Below is a comparison of Stocks and Shares ISA charges from all the major providers taking these factors into account.
I have split the comparison into the:
- Cheapest Managed Stocks and Shares ISA – (where your money is managed for you)
- Cheapest Self-invested Stocks and Shares ISA – (where you pick your own investments)
Cheapest Managed Stocks and Shares ISA – (where your money is invested for you)
Managed Stock and Shares ISAs are usually offered by so-called robo-advisers. Robo-advice is the term that's been given to online investment managers which provide an investment product, such as an ISA ,where they invest your money for you. Technically robo-advisers don't usually give you advice but instead they offer a number of portfolios (from low risk to high risk) from which they help you select one. They then invest your money, usually at low cost using exchange-traded funds (ETFs).
Picking the best robo-adviser isn't just about picking the cheapest one, you need to also consider investment performance. The table below compares costs for different sizes of ISA portfolio. The cost quoted is the charge applied by the robo-adviser to run your money plus the costs of the underlying investments (ETFs) based on portfolio size ranging from £5,000 to £250,000
| £5,000 portfolio | £10,000 portfolio | £20,000 portfolio | £50,000 portfolio | £100,000 portfolio |
£250,000 portfolio
|
|
| Moneybox | £46 | £80 | £148 | £352 | £692 | £1,712 |
| Moneyfarm fully managed* | £48 | £90 | £170 | £400 | £650 | £1,500 |
| Moneyfarm fixed portfolio* | £33 | £65 | £130 | £325 | £550 | £1,250 |
| Moneyfarm socially responsible portfolio* | £48 | £91 | £172 | £405 | £660 | £1,525 |
| £48 | £95 | £190 | £475 | £950 | £1,775 | |
| £34 | £67 | £134 | £335 | £670 | £1,375 | |
| £52 | £103 | £206 | £515 | £1,030 | £1,975 | |
| True Potential | £85 | £170 | £340 | £850 | £1,700 | £4,250 |
| Wealthify | £38 | £76 | £152 | £380 | £760 | £1,900 |
| Wealthify ethical portolio | £65 | £130 | £260 | £650 | £1,300 | £3,250 |
Cheapest Self-invested Stocks and Shares ISA – (where you pick your own investments)
Self-invested Stocks and Shares ISAs are aimed at those wanting to choose their own underlying investments. The first table below assumes that you only invest in unit trust funds and make 10 fund switches a year. Bear in mind that if you are picking your own funds then you need to allow for an additional 1% to 1.5% a year in fund charges on top of the numbers quoted below. Simply look at the column (on either table) that most closely matches the size of your stocks and shares ISA portfolio for an estimate of the annual cost if your investments were held with each fund platform.
The second table assumes that you want to invest in shares, investment trusts or ETFs and that you make 20 trades a year. Again, you will have to pay additional charges levied by the funds you invest in on top of the figures quoted but they will be fairly standard across all platforms.
Cheapest stock and shares ISA if want to invest in unit trusts
Cost based on portfolio size ranging from £5,000 to £250,000 – Assumes 10 fund switches per year
| Cost per fund transaction |
£5,000 portfolio | £10,000 portfolio | £20,000 portfolio | £50,000 portfolio | £100,000 portfolio |
£250,000 portfolio
|
|
| AJ Bell* | £1.50 | £28 | £40 | £65 | £140 | £265 | £640 |
| Barclays Smart Investor | £3 | £78 | £78 | £78 | £130 | £230 | £530 |
| BestInvest* | Free | £20 | £40 | £80 | £200 | £400 | £1,000 |
| Charles Stanley* | £4 (£50 in trading credits applied every 6 months) | £60 | £60 | £60 | £150 | £300 | £750 |
| Fidelity International* | Free | £45 | £45 | £70 | £175 | £350 | £875 |
| £12.50 | £131 | £131 | £131 | £131 | £131 | £131 | |
| Hargreaves Lansdown* | Free | £23 | £45 | £90 | £225 | £450 | £1,125 |
| Interactive Investor* | £3.99 | £140 | £140 | £140 | £140 | £184 | £184 |
| iWeb | £5 | £150 | £150 | £150 | £150 | £150 | £150 |
| Vanguard1 | Free | £8 | £15 | £30 | £75 | £150 | £375 |
| Willis Owen | Free | £20 | £40 | £80 | £200 | £350 | £650 |
1 Vanguard only allows you to invest in Vanguard funds only, iWeb has a £100 upfront fee to open an ISA. Vanguard only allows you to invest in its own funds
Cheapest stock and shares ISA for shares, investment trusts and ETFs
This cost comparison below assumes you only want to invest in shares, investment trusts and ETFs and is based on portfolio size ranging from £5,000 to £250,000. It also assumes 20 trades per year.
| Single Trade cost | Regular Investing cost | £5,000 | £10,000 | £20,000 | £50,000 | £100,000 | £250,000 | |
| AJ Bell* | £5.00 | £1.50 | £113 | £125 | £142 | £142 | £142 | £142 |
| Barclays Smart Investor | £6.00 | £1.00 | £168 | £168 | £168 | £170 | £220 | £370 |
| Bestinvest* | £4.95 | Free | £119 | £139 | £179 | £299 | £499 | £1,099 |
| Charles Stanley* | £10.00 | Free | £160 | £160 | £160 | £250 | £400 | £700 |
| Close Brothers Self Directed Service | £8.95 | Free | £192 | £204 | £229 | £304 | £429 | £804 |
| Equiniti Shareview | £12.50 | £1.75 | £263 | £275 | £295 | £295 | £295 | £295 |
| Fidelity Personal Investing* | £10.00 | Free | £245 | £245 | £245 | £245 | £245 | £245 |
| Freetrade* | £0 | Free | £60 | £60 | £60 | £60 | £60 | £60 |
| Halifax Share's & Dealing Website | £12.50 | £2.00 | £203 | £203 | £203 | £203 | £203 | £203 |
| Hargreaves Lansdown* | £11.95 | £1.50 | £262 | £284 | £284 | £284 | £284 | £284 |
| iDealing | £9.90 | N/A | £218 | £218 | £218 | £218 | £218 | £218 |
| IG | £8.00 | N/A | £160 | £160 | £160 | £160 | £160 | £160 |
| Interactive Investor * | £3.99 | Free | £140 | £140 | £140 | £140 | £184 | £184 |
| iWeb | £5.00 | Free | £200 | £200 | £200 | £200 | £200 | £200 |
| Willis Owen | £7.50 | £1.50 | £170 | £190 | £230 | £350 | £500 | £800 |
| X-O | £5.95 | N/A | £119 | £119 | £119 | £119 | £119 | £119 |
iWeb has a £100 upfront fee to open an ISA.
Best Cash ISAs
If you do not have an investment timeframe of at least 5 years (i.e. you will need access to your cash within 5 years) then you would be better off placing your money in a cash ISA rather than in an investment ISA. That is because when you take out a Stocks and Shares ISA you will be Investing in shares, funds, bonds, investment trust or exchange traded funds (ETFs) all of which carry investment risk and the potential to lose money as well as make it. Below are links to our latest cash ISA best buy tables:
Earn 5.09% AER variable interest on your cash
Put your cash to work. Earn 5.09% (AER variable) interest on uninvested cash in a Dodl investment ISA and investment LISA.
- Earn tax-free interest on money that is not yet invested.
- Interest paid quarterly.
- Investing involves risk.
- T&Cs apply.
How to compare Stocks & Shares ISAs
Under the current ISA rules you can choose to invest some of your ISA allowance in a cash ISA and the balance of your ISA allowance in a Stocks and Shares ISA if you wish.
Step 1 – Do you want to choose your investments or let someone run it for you?
There are two options when it comes to investing in a Stocks and Shares ISA. You can choose to pick the underlying investments (funds or shares) yourself or let someone take care of picking and running the investments for you. If you want to have control over how your money is invested then jump to step 2 below.
If you'd rather let someone run your money for you at low cost while optimising performance then you would be better off choosing what the press has coined a ‘robo-adviser'. Robo-advisers will put your money in a diversified portfolio based on the amount of risk you want to take. They will then manage the investment for you which you can view and monitor online. The ‘Best Managed Stocks and Shares for beginners' shown above is a robo-adviser which has managed to combine strong investment performance with low costs. If you just want to pick the cheapest robo-adviser then you can check out our Managed ISA comparison table above.
Steps 2 and 3 below provide further advice for those investors wanting to invest their own money themselves (so-called DIY investors).
Step 2 – Decide how you want to invest your Stocks and Shares ISA
If you plan to invest your ISA allowance yourself then when you compare Stocks and Shares ISAs the cheapest ISA provider or platform for you will depend on what you want to invest in. When you invest in a stocks and shares ISA there are a range of charges. Firstly there is the charge of the underlying fund or asset you are investing in. Then there are the charges levied by the broker or fund platform (often called a fund supermarket). Every Stocks and Shares investment ISA provider levy different charges based on what you invest in and how much you have invested with them. For example there may be additional charges levied for investing in shares or investment trusts. So what might you invest in?
Funds
Most DIY investors will invest in funds which in turn buy shares and other assets, such as corporate bonds. Funds (a term which includes investment trusts, unit trusts and ETFs) are called collective investments. They pool investors' money together to benefit from economies of scale and then invest that money in assets such as shares or bonds. Actively managed investment funds have a fund manager who chooses the underlying investments.
Meanwhile, passive investments simply track an index such as the FTSE 100 index using computers. If you are considering investing in funds then I recommend downloading this FREE guide to investing in funds. It's the best guide I've come across on the topic and tells you all you need to know including how to get started with buying funds.
Shares
If you want to buy shares within your Stocks and Shares ISA this limits your choices in terms of which would be the best provider for you. Some Stocks and Shares ISA providers do not offer the stockbroking facility required to buy shares directly. Investing directly in shares is a riskier investment strategy as while it can be profitable it increases the chances of a potential loss.
Step 3 – Things to check when choosing the cheapest Stocks and Shares ISA
Once you know what type of investments you wish to buy that makes life a lot easier. If you want to buy shares and investment trusts your options are much more limited. If, like most investors, you want to just invest in Stocks and Shares ISA funds then you need to consider other factors to screen down your choices. For now we will set cost to one side and come back to it later. Competition among funds supermarkets and online brokers is growing increasingly fierce so costs are falling all the time.
Customer service
There has been a mini-explosion in new Stocks and Shares ISA providers, after all it can be a lucrative market if providers get the proposition right. To many of the new online providers that means keeping their own costs low, by that I don't mean the costs you pay but how much time and money they have to spend administering your investments.
As such, the level of service some provide is pretty minimal. You need to decide if being able to speak to someone on the phone if things go wrong is important to you. You need to decide whether you want a slick user experience with the ability to buy and sell investments quickly and easily. Would you like to be able to check your investments via your smartphone, if so do they have a smartphone app?
Does the Stocks and Shares ISA accept transfers in?
If you already have an existing stock and shares ISA portfolio you might want to consolidate them all with one provider. If so check what their rules and charges for doing so are.
Tools and research
Some Stocks and Shares ISA providers offer tools and some research (albeit limited). However most don't. Would you like a tool that can help you to pick the best ISA funds for your objectives? If so check they offer these. I highlight some of the best stocks and shares ISA providers in the next section and detail what they offer.
Charges
As mentioned there are a host of charges that Stocks and Shares ISA providers can levy. They include:
- transfer charges
- dividend reinvestment fees
- buying charges
- selling charges
- fund switch charges
- bid/offer spread
- fund manager charges
- platform charges
- transfer out fees
Make sure you understand these charges and are happy with them. However, you shouldn't just focus on cost but instead, consider value for money as well as the level of service provided.
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 – Hargreaves Lansdown, Interactive Investor, Moneyfarm, AJ Bell, Fidelity, Bestinvest, Freetrade
(image by worradmu. freedigitalphotos.net)