Vanguard was founded in the US in 1975 by John Bogle and currently has over 50 million individual investors worldwide. It offers around 85 of its own low-cost index-tracking funds as well as 5 risk-rated ready-made portfolios. Its popular LifeStrategy fund range gives investors access to 5 blended funds with varying degrees of equity and bond exposure, allowing them to target a level of risk and return that is right for them.
While Vanguard is incredibly cheap - charging a platform fee of just 0.15% (capped at £375) - there are cheaper alternatives, depending on the amount you have to invest and the type of product you wish to invest in. In addition, Vanguard has announced that it will introduce a minimum monthly fee of £4 from January 2025, making it relatively expensive for those with smaller investment portfolios. In this article, we highlight 5 of the best alternatives to Vanguard, giving our reasons, and highlighting any available cashback offers and deals.
Best all-round alternative to Vanguard
- Interactive investor is a good all-round alternative to Vanguard as it offers a range of investment products and can work out cheaper than Vanguard when investing larger sums (see below)
Regular cashback deals. Check out our Interactive Investor review for more information
Cheaper than Vanguard if investing more than £96,000 in a Stocks and Shares ISA or £104,000 in a SIPP
Subscription plans priced at £4.99, £11.99 or £19.99 per month (No annual management charge)
Access around 40,000 investments (Vanguard only allows you to access around 85 of its own funds)
Check out our Interactive Investor review
Best alternative to Vanguard Lifestrategy funds
- InvestEngine* (Capital at risk)
InvestEngine recently launched 'LifePlans', a range of 5 globally diversified portfolios featuring a carefully selected range of funds with a mix of equities and bonds. LifePlans are, in essence, InvestEngine's answer to Vanguard's hugely popular range of LifeStrategy funds.
5 risk-rated, globally diversified portfolios with varying degrees of equity and bond exposure, similar to Vanguard's popular LifeStrategy range
Invest from as little as £100 (compared to £500 with Vanguard) and no minimum monthly fees
Annual charge of 0.25% for managed portfolios and LifePlans (Also offers free DIY investing). Additional ETF costs apply
Check out our full independent InvestEngine review
Best alternative to Vanguard if investing via an app
- Although Vanguard has finally released a mobile app for UK investors, its functionally is fairly limited at present. Those looking for an app-based investment platform should take a look at AJ Bell Dodl. You can invest from as little as £25 per month and access a good range of investments, including the popular Vanguard LifeStrategy funds.
App-only platform meaning it is user-friendly and simple to use
Annual charge of just 0.15% (This is the same as Vanguard, however, it isn't capped at £375)
Access 7 risk-rated ready-made portfolios, 28 themed funds and 80 shares (choice includes the popular Vanguard LifeStrategy 40%, 60% and 80% funds)
Check out our full independent AJ Bell Dodl review
Best alternative to Vanguard if investing in shares
- Vanguard only allows you to invest in its own funds and so investors keen to invest in individual stocks need to look elsewhere. Freetrade is a good alternative to Vanguard and investors can access over 6,000 shares.
Get a FREE SHARE worth up to £100* when you deposit at least £50 into a Freetrade ISA (capital at risk) or Freetrade basic account (capital at risk)
Access over 6,000 shares (Vanguard does not allow you to buy and sell shares)
Simple user-friendly app
Check out our full independent Freetrade review
Best alternative to Vanguard for holding cash
Vanguard only pays 2.35% interest on uninvested cash which is relatively low when compared to many of the top UK investment platforms. Bestinvest currently pays 3.95% interest on uninvested cash, which is the highest of all the platforms mentioned in this article. In our article 'Investment platforms paying the highest interest rate on cash', we provide a handy table where you can easily compare the interest paid.
Good for investors who want to get the best return on their cash
Pays 3.95% interest on uninvested cash (compared to 2.35% with Vanguard)
Invest from as little as £50 (compared to £500 with Vanguard)
Check out our full independent Bestinvest review
If you want to secure the best savings rates on the market, then check out our article, 'Best savings accounts in the UK'.
Summary
If you are simply wanting to invest in Vanguard funds then Vanguard Investor provides the cheapest way to invest, as long as you have less than £96,000 in a Stocks and Shares ISA and £104,000 in a SIPP. Those wishing to invest more may want to look at Interactive Investor* as it can work out cheaper, you can read more in our independent Interactive Investor review.
One of the limitations of investing with Vanguard had been a lack of a mobile app for UK investors, but one was launched in the autumn of 2024. However its functionality is quite limited when compared to those of other propositions out there. So those who prefer to invest and research from their mobile may want to take a look at Aj Bell Dodl* or Freetrade*. Those wishing to regularly invest small amounts each month may want to take a look at Bestinvest*, a platform that pays 3.95% interest on uninvested cash. If you are still not sure which is the best platform for you, check out our article 'The best investment platform: Which is best for you?'.
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, Fidelity, Bestinvest, Freetrade
