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Cheapest stocks and shares ISA hack

A champions cup representing that this is the ultimate stocks and shares ISA cost hack

Our cheapest broker comparison table shows how to cut your platform and trading fees to the bone. But there’s an investment ISA cost hack that even we were too afraid to talk about until now – lest the military-broker complex take us out with a drone strike on Monevator HQ.

Well, no more! It’s time to speak truth to power and to watch how long it takes power to nuke us from orbit.

I’m going to call this ISA cost-optimisation the Alex Manoeuvre in honour of the latest Monevator reader who prompted me to spread the word.

Here’s how the hack works.

Instead of holding your stocks and shares ISA with either a percentage-fee platform or a flat-fee platform, you transfer it between the two to get a best-of-both world’s price.

You can cut your stocks and shares ISA costs by over 55% using this method.

The principle is:

  • Drip-feed your annual ISA allowance into this year’s ISA via the cheapest percentage-fee platform available.
  • Do this every year.

Percentage-fee platforms offer the best deals to small investors. They tend to rake it in once your account swells beyond £25,000 to £50,000. They’re relying on your inertia.

Flat-fee platforms offer the best deals to large investors. They hope to make it up in trading fees. They’re relying on high rollers who treat their portfolios like a night at the casino.

You can arbitrage these cost models provided you’re active in transferring your ISA and then near-comatose once you’ve parked it at your long-stay platform.

Cheapest stocks and shares ISA hack in action

Vanguard Investor offers the cheapest percentage fee stocks and shares ISA.

It charges 0.15% on the value of your assets and zero for trading fees.1

Were you to drip-feed your ISA allowance in evenly every month, you’d pay approximately £16 in platform fees for the year.

Leave your assets with Vanguard forever though and it’d keep charging 0.15% until you hit its £375 cap – the point where your account has accumulated £250,000.

But you’re not going to hang around.

Instead, you transfer your ISA to iWeb for permanent storage.

iWeb charges a one-off account opening fee of £25. You won’t pay it on future transfers though, so we’ll ignore it as the price of a night out that we can’t have anyway.

After that iWeb charge zero for platform fees and £5 per trade.

We’re not trading so we plan on paying pretty much zero pounds to iWeb.

Total cost of your stocks and shares ISAs per year = £16

Now that is cheap.

Cheapest stocks and shares ISA comparisons

Freetrade costs £36 and you’d have to stick to ETFs only.

You’d expect to pay at least £36.50 at Halifax Share Dealing. More if you bought multiple funds per month.

Lloyds Share Dealing costs at least £58. EQI more like £70.

Critically, Vanguard doesn’t charge an exit fee for the transfer and iWeb doesn’t charge an entry fee.

You need to transfer your investments in specie (so they’re not sold to cash) to avoid paying dealing fees to iWeb at the other end.

In Specie or re-registration transfers mean you don’t have to worry about being out of the market either.

The compromise is that Vanguard restricts you to its own-range funds and ETFs. That’s okay because it runs excellent, cost-competitive index trackers.

You’d need to check that iWeb offers the same trackers. It does hold most Vanguard funds and ETFs, so that shouldn’t be a problem.

iWeb’s website is out of the Dark Ages but it’s part of Halifax Share Dealing and is generally fine to deal with.

I’ve ignored rebalancing costs once you’re parked up at iWeb. A small investor should be able to rebalance with new money.

Anyone with an embarrassment of riches can set their rebalancing alarm to once every two or three years. That gives you just as good a chance of being up on the deal as any other rebalancing method.

Or you could invest everything in the Vanguard LifeStrategy fund. That takes care of rebalancing for you.

If you don’t want to be limited to Vanguard index trackers then you can perform the same manoeuvre with another percentage-fee platform, or stick with Freetrade.

No other combo is as cheap as the Vanguard/iWeb hack though. And the nearest rival platforms are all restricted to some degree.

Cheapest SIPP hack

The equivalent hack with SIPPs is Vanguard to Fidelity. The extra compromise here is that your Fidelity holdings must be entirely in ETFs. This caps your platform fees at £45.

There are decent savings to be made if you buy three or more ETFs every month. Fewer than that and there’s probably better things to do with your time.

If you want to hold funds then the cheapest hack axis is Vanguard to Sharedeal Active where you pay a £118.80 flat-rate SIPP fee.

Fidelity’s SIPP is exceptionally cheap though, if you stick to a couple of ETFs.

Cost shavings

If you truly want the cheapest stocks and shares ISA possible then you’ll need to factor in the cost of the cheapest trackers available on any platform versus those available through Vanguard.

Paying slightly higher OCFs than necessary could overwhelm your platform fee / dealing fee savings. Be especially vigilant if you have a very large portfolio.

None of this takes into account the value of your time spent filling in forms. Although when you’re getting this anal then maybe that’s a net positive. (A person’s gotta have a hobby!)

Never let it be said that we conceal the truth at Monevator-leaks. No finance industry black ops goons are going to scare us.

Right-o, must dash, there’s some masked men abseiling through the window.

Take it steady,

The Accumulator

  1. You pay zero for trading ETFs as long as you accept the fixed daily trading times. []

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{ 55 comments… add one }
  • 1 UxR October 20, 2020, 10:31 am

    Yup..did just this two years in a row. Easy-peasy.

  • 2 BadLuck October 20, 2020, 10:38 am

    I lost a large amount of money with a badly timed SIPP transfer this year (just before the madness really started). Far more than I’ll ever recoup in fees sadly. Lesson learned; don’t transfer except in specie.

  • 3 Al Cam October 20, 2020, 11:46 am

    If you decide you need >1 ISA broker/platform (say for FSCS protection, or similar) then you can use variations of this approach to – at least in principle – re-balance your overall Pot at your chosen frequency FoC (other than your time) with no new money.

  • 4 Damian October 20, 2020, 12:03 pm

    Damn just in middle of transfer to Halifax Share Dealing. I’m a bit concerned as it didn’t mention anywhere the ‘in specie’ option and on chat they just said ‘if fund exists at halifax, then it’ll be in specie. If not, it’ll be cash’. The fund does exist at Halifax but I expected it to be a lot more clear and indication that it is actually going to be in-specie, as I wouldn’t want to transfer if it’s cash.

  • 5 Dave October 20, 2020, 1:37 pm

    This is exactly what I do. Been doing it for a few years now. This year’s ISA money is going to HL, to be transferred to Iweb when this year’s done. I keep track of it with Trustnet.

  • 6 Mezzanine October 20, 2020, 1:45 pm

    I’ve also done this successfully to save costs, transferring ISA contributions from Vanguard to Halifax SD where I already pay a fixed annual ISA fee. All worked fine in-specie after some initial Vanguard confusion where they mistook the transfer “pull” request from Halifax as a transfer in rather than out!

    However, I’ve made a bit of a mess of it this FY by attempting to transfer previous years contributions (only) from an ISA that was being actively subscribed to. All of the funds, including those bought this FY and my remaining 2020-21 ISA allowance now appears to be stuck in no-mans land between providers…

  • 7 Dead Duck Donald October 20, 2020, 2:04 pm

    Anyone know approximately how long it takes for the in-specie transfer from Vanguard to iWeb / Halifax to complete? I’ll be kicking one off before the end of this tax year.

  • 8 Fremantle October 20, 2020, 3:01 pm

    Have an ISA and dealing account with iweb holding lump sums from a property sale. I’m migrating the dealing funds to the ISA, selling the LS40 income units, transferring to the ISA and purchasing the equivalent LS40 acc units, £10 for 2 trades. Any income from the income units is covered by my dividend allowance, and any capital gains by similar. My main risk is market movements while out of the market during the bed and ISA process.

  • 9 PUJ October 20, 2020, 3:53 pm

    I’ve been doing this for years.

    Better factor in the hassle of printing a form, an envelope and a stamp.

    I don’t think it’s likely platforms will put in a transfer in fee. A transfer out fee is the risk if this gets too popular. Also an in specie fee is not unheard-of.

  • 10 Jonathan B October 20, 2020, 4:00 pm

    Impressed by @TA’s clever wheeze. But I think I am right in saying, its value is for someone who wants to drip feed (pound cost average) their ISA for whatever reason. A single iWeb investment, assuming there were only 1-3 funds, would not be worse.

    My wife and I, as investors wary of getting timing wrong in times like this year, have settled on spreading investments over 4 points in the year, 2 into my ISA and 2 into hers. Using LifeStrategy at preferred proportion, that means just £10 fees each a year.

  • 11 PopInLouth October 20, 2020, 4:18 pm

    Great idea which works for 4 years: Vanguard £20k x 4 becomes, say, £85k in iWeb and remains within the government protection limit. You have made me think about what I should do about an £150k SIPP (in far too many separate ETF holdings) and £90k ISA, both with AJ Bell. Do I really want to have two SIPP accounts? I can only contribute £3.6k/pa for two more years and do not expect to need to draw it/them down. Suggestions would be welcomed.

  • 12 David October 20, 2020, 8:20 pm

    @TA : If you wanted to do your initial investment using a site that had a wider range of funds (i.e. somewhere other than Vanguard), could you add to the article where would be the next cheapest option for your initial accumulation year? (the article seems to suggest it’s iweb’s brother/sister Halifax Share Trading?) – sorry if i’ve misunderstood or am a bit slow! – thanks!

  • 13 Dan October 20, 2020, 9:44 pm

    What a coincidence. I just worked the maths for this out on the weekend, been building my ISA up over the year and considered transferring to iWeb.

  • 14 Jason October 20, 2020, 10:17 pm

    Has anyone completed an in specie transfer from Best Invest to iWeb? If so did you incur any transfer out charges? I started looking at this at earlier today as I have a World Index Tracker that’s the majority of portfolio which I’d like to move to iWeb to reduce costs.

  • 15 Carl October 20, 2020, 10:50 pm

    Another great tip, thanks! I’ll be using this at the end of the next tax year I think, will make sure it’s the actual index funds I’m transferring across and not moving to cash as others have stated.

  • 16 Vertigo October 21, 2020, 2:28 am

    For situations where transferring in specie isn’t possible (moving to/from the UK, unsupported investment on new platform, etc.), I guess it’d be possible to cover time out of the market with a call option. Does anyone know any reading material on this subject? I.e. an option that would cover lost gains if the global stock market rises during a cash transfer lasting (say) a few weeks. Would this be a feasible thing for an average retail investor to attempt?

  • 17 Dan October 21, 2020, 7:31 am

    So in terms of making the transfer, if you meet your 20k part way through the year I.e now would you be able to make the transfer right away?

    Would this close the vanguard USA and you’d have to make a new one next year?

    As I’ve already met my allowance for the year I instead invest in a general account. If I were to amass 20k into the account by the new tax year could I do an in specie transfer of it to iWeb? With no buying fee?

  • 18 Another David October 21, 2020, 6:49 pm

    Glad to see you’ve found a new hobby now those 14 current accounts aren’t paying their way any more 🙂

  • 19 Matthew October 21, 2020, 9:50 pm

    If you have an isa with the same provider as a sipp, can you have the charges levied entirely to the sipp (ie untaxed money?) Because if vanguard say they are % with a £375 cap, how do they determine what money in what account makes up that £375? – there must be some flexibility in how they allocate the cost

  • 20 Richard Sorrell October 21, 2020, 10:02 pm

    I’m using a trading account with freetrade: £0 trading costs.
    Planning a once a year transfer to Trading 212 ISA which offers £0 ISA fees.
    Total costs = £0
    Am I missing something.

    I could just use Trading 212 for everything but they don’t have all the stocks Im interested in.
    Specie transfers: sometimes you win, sometimes you lose in terms of timing the market, no big deal.

  • 21 Matthew October 21, 2020, 10:25 pm

    @Richard – bid/spread margins? I imagine thar be what ye missing

  • 22 Ryan October 21, 2020, 10:41 pm

    @Matthew Would you not be better paying your costs with cash held outside of SIPP / ISA, save eating away at your protected gains?

  • 23 ermine October 21, 2020, 10:50 pm

    @Dan The rules on transferring a current year ISA are complex. You have to transfer the entire this tax year ISA (so you couldn’t contribute more to that at the old provider) but not all providers accept the extra paperwork. I guess in specie that means everything you’ve bought in the ISA this year.

    For previous years’ ISAs it is simpler – the extra paperwork for the current tax year is to ensure you don’t have two ISAs open in any one year (ie active and contributing to two providers, because that is verboten)

    > could I do an in specie transfer of it to iWeb?

    Depends if you want it in an iWeb ISA. From a general trading account ( ie non ISA) into an ISA, you usually have to bed-and-ISA those, which involves the spread and trading fees, though some firms (TD direct used to) waive the buying fee so you just get to eat the selling fee. And the spread.

    So ask them first so you don’t get any surprises. Explicitly – I have 500 shares of xxx in provider XYZ general trading account. I wish to transfer these into an iWeb ISA (consuming the market value of the stocks at the time of entry into the ISA). Can I do this in specie, and how much will it cost?

    Rough outline on theis MSE post

    If however you are transferring in specie from a general investment account to iWeb’s general trading account then you can do that at no cost, other than the cost of opening your very first iweb account if you have none at the moment.

  • 24 Matthew October 22, 2020, 5:59 am

    @Ryan – it would depend on tax situations, if someone is using their whole sipp allowance then that may make sense, but even if they are if you’re paying fees from your net money you have to expect that what is protected in the sipp will make back the tax paid on all those fees back in returns before you might annuitise/draw down

    I’d also separate it from calculating capital gains in unsheltered assuming that that’s diffused separately although if you can deduct the fees (?) then it might change the calculation

  • 25 Jon B October 22, 2020, 8:49 am

    Just started transferring my old style Scottish Widows pension to a Fidelity Sipp. In specie transfers are not possible as the fund is not available outside SW, so I transferred a small chunk first. Just wondered if there was likely to be any problems moving it over as multiple back to back small chunks to avoid being fully out of the market?

    Also is there much risk to having it all in one place? I plan to move it all but I am now worrying as it is a reasonably large amount.

  • 26 Genghis October 22, 2020, 4:14 pm

    @Jon B. No problem. My wife did 8 back to back transfers from Scottish Widows, all fine, apart from them doing a full transfer of an active workplace pension on the final tranche instead of a partial transfer, as instructed. They set up the pension again swiftly but not without valuable time wasted on our part. Complaint still being processed.

  • 27 Merlotman October 22, 2020, 6:35 pm

    Don’t know whether this answers your question but I have SIPPs and ISAs with HL
    The charges applied are completely separate so I pay £16.66 pm for the SIPP and £3.75 pm for the ISA. These are the maximums so long as you avoid funds which I do religiously.

    I am in drawdown for annual allowance reasons and the divi yield on my SIPP is just about enough to generate the cash for an annual ISA allowance which I am now doing with iWeb as I wanted som platform diversification

    An interesting question has just occurred to me however. Will HL charge me separately for my remaining SIPP and SIPP income drawdown. I am currently assuming these will be continue to be viewed on a consolidated basis….

  • 28 Matthew October 22, 2020, 9:58 pm

    @merlot – I’m not overly familiar with HL to be honest, I wasn’t aware of / couldn’t see any sort of price caps. They may by default charge them individually but I wonder if you do have the option to choose where you pay it/ what constitutes it, especially if you had one overall price cap that covered all accounts like vanguard – I know that with the AJ Bell Lisa you can pay management fees (but not dealing charges) from outside of the wrapper if you want to – so to me that implies that it can be done to alter the tax treatment. Hl can tell you how they’ll charge your drawdown, I imagine it’d be charged at source.

    Agree about platform diversification, even if they don’t go bust they may have an IT meltdown and either be unable to pay or unable to remember what you have (keep statements!)

  • 29 Bob October 22, 2020, 11:19 pm

    What are peoples view on Trading 212? No platform fees. Reasonable selection of etfs for most passive investors. But not mentioned in this article…

  • 30 Matthew October 23, 2020, 10:28 am

    With the Vanguard to iWeb example. How does this need to be timed regarding having 2 separate ISAs open, when you can only open 1 a year? Say I open a new iWeb ISA to transfer my current Vanguard ISA funds to, when am I then able to open another Vanguard ISA to start again?

  • 31 Factor October 23, 2020, 1:33 pm

    @Matthew #28

    As a trigger, each time I receive an IT dividend (always at least one in any one month) I print out and file the full details of all my current iWeb IT holdings. Better safe than sorry.

  • 32 UxR October 23, 2020, 2:04 pm


    when doing the transfers, you need to pre-agree with both parties to keep the old ISA open and they won’t close it then. Make sure this is understood with both prior to starting the process and keep note of it in case they mess it up.

  • 33 UxR October 23, 2020, 2:05 pm

    (previous comment meant at Matthew)

  • 34 Matthew October 23, 2020, 6:52 pm

    So you can keep both ISAs open when you transfer? Does this need to be timed with the change of tax year then somehow, or can be done anytime (once per year)?

  • 35 spacebadger99 . October 23, 2020, 8:35 pm

    Bob re: Trading 212,
    I’ve being using them for just 2 years now as a trading account and no major issues. Sometimes I note they have a reduced share coverage but have a iweb account if the share is really required.
    I was thinking of migrating my cavendish-online/fidelity ISA but that’s a much larger sum so I opened the trading account to see how it and they perform. The one fly in the ointment is they don’t do in specie transfers.

  • 36 Krage October 23, 2020, 10:32 pm

    It is a bit silly to care about GBP50 per year where the right fund selection can make you GBP5000

  • 37 The Accumulator October 24, 2020, 12:12 pm

    @ David – Freetrade if they have the right ETFs for you, or next lowest percentage fee broker that best suits your needs. Due to broker confusion marketing it… depends:

    @ Another David – that did make me chuckle. You’re spot on 🙂

    @ Dan – yes, you can transfer when you like.

    @ Matthew – see ISA transfer ins and outs here:

    @ Richard – very nice. As long as you don’t make a stupendous capital gain or end up trading contracts for difference then you win.

    @ Jon B – These posts may help:


  • 38 Abby November 2, 2020, 10:25 pm

    Does this apply to Vanguard general account —> iWeb Share dealing account too?

  • 39 Fidel Sippity November 28, 2020, 12:11 am

    The Vanguard to Fidelity Sipp hustle doesn’t look cheaper unless I am misinterpreting something here.
    “Benefit from our low 0.35% service fee if you invest more than £7,500, or set up a regular savings plan.”
    “If you hold less than £7,500 with Fidelity and do not have a regular savings plan, our service fee is £45 for the year.”
    It doesn’t say it’s capped at £45 and has a service fee of 0.35% to Vanguard’s 0.15%.

    The Sharedeal Active blag where funds are transferred is £90 with the first year fee knocked off. I can’t see £118.80 anywhere on the fees/sipp section of the site.

    I have an LISA with AJ Bell, which unfortunately permits each in specie fund transfer for a fee of £25 (cash is free!)
    I think I’ll have to work out how often to do your excellent iWeb transfer ploy from using some big maths, methinks.

  • 40 Ruth December 6, 2020, 8:08 pm

    I was just looking at the iweb account to find the best fixed fee account and noticed that the £25 one off opening fee is changing to £100 from 1st January 2021.

  • 41 Royston December 12, 2020, 1:25 pm

    One thing to watch out for, when you sign up to iWeb, it asks you as part of the application what you want to do with dividends, reinvest, leave as cash, pay to nominated account.

    Presumably if you choose reinvest it will hit you with the £5 fee each time, which if you have multiple funds possibly paying out at slightly different times could mount up considerably.

    What are people thinking with this, I ticked the ‘leave as cash’ option and then plan to reinvest the lump sum once a year to only pay once, although that leaves the money out the market for the year or so duration, am I missing something here, presume everyone who wants to reinvest their dividends want them back in the market asap?!

  • 42 Alan John December 12, 2020, 5:20 pm

    I guess you would avoid this if you invest only in Accumulation Funds?

  • 43 Marc December 19, 2020, 4:41 pm

    Superb tip, thanks TA. Would that still be beneficial if you have other accounts with Vanguards that you can’t move such as Junior ISA and a general account?

  • 44 Mark January 11, 2021, 3:24 pm

    iWeb account opening fee increased to £100 from £25 at the begining of 2021

  • 45 LouiseC January 13, 2021, 3:11 pm

    Oddly, iWeb do not offer the ESG Vanguard funds via their ISA wrapper, but they are available via their Sharedealing account. I was one button-click away from committing to the transfer from Vanguard when I thought to check this.

    And now I’m really conflicted. Their set up seems senseless to me.

  • 46 Cornelius February 3, 2021, 5:14 pm

    Thanks for this very useful guide (and associated links). A couple of questions or requests:
    1) any reason why you haven’t mentioned the commission-free broker ‘eToro?’
    2) Investors Chronicle have published a review of actual costs for using commission-free brokers but I was unable to view it as I am not a subscriber. Any chance of publishing a resume of their findings?

  • 47 Simon Bassett February 9, 2021, 1:25 pm

    Just been looking into this again for the new financial year and note that iWeb now charge an opening fee of £100 for ISAS and share dealing accounts. Thought this might be useful info!

  • 48 Shadow Love February 16, 2021, 9:42 pm


    Firstly, a massive thank-you for enlightening me on this hack. It’s ingenious, and boy, do I love such loopholes (if you can call it one).

    Secondly, a question – I have an ISA with HL now, and I wish to transfer the wrapper over to iWeb to save on platform charges. Once I have transferred it, and my HL account is empty, can I carry on investing in the same HL account, but from April 21 tax year? Or do I have to close the account down, and open another with HL to do so?

    Thanks in advance.

  • 49 cat10 March 3, 2021, 1:04 pm

    I am not entitled to SIPP or ISA because I’m not UK tax resident. My investments are in GBP.

    Which sites/trading hacks could I use to either drip feed amounts or deposit yearly lump sums, and after a year leave these for ten years?

  • 50 sokat1 March 3, 2021, 1:21 pm


    Firstly a massive thank-you for removing my earlier post that asked similar advice to those that had gone before me. Do I smell?

  • 51 The Investor March 3, 2021, 5:24 pm

    @sokat1 – Your comment wasn’t deleted. As you’re a brand new poster it goes into moderation, because the site is spammed literally thousands of times a day. Most of these are caught by software but some are left for me to read and approve. Within the couple of hours between your two posts I hadn’t had a chance to check the comment approvals, hence why I’m seeing them both now. Cheers.

  • 52 sokat1 March 3, 2021, 5:34 pm

    Thank-you for letting me know.

    I thought that because the link gave me a 404, that the post had been pulled.

    Thank-you for approving my post.

  • 53 The Investor March 4, 2021, 10:25 am

    @sokat1 — No worries. However it’s hard for us to say anything intelligent about your situation because being offshore your circumstances will be different depending on your tax regime and so on.

    In your situation I’d probably set up an account in the country where I’m taxed. I expect it’d save me a lot of hassle in the long-term. But please note this is definitely not personal advice to you. You could talk to a qualified financial advisor to find out what works best in your scenario. Good luck!

  • 54 sokat1 March 4, 2021, 10:51 am

    I’m paid in GBP into the UK.
    I am tax resident in the EU where my earnings are declared. I am loathed to change all my sterling into EUR only to pay exorbitant management fees from the limited brokers available.

  • 55 sokat1 March 4, 2021, 12:45 pm

    Also, I did not ask tax advise. I wish to know the funds/etf broker with the cheapest fees. I have had my funds held in a standard Funds & Shares acc with HL for decades. I still pay in monthly GBP in a direct debit. It just wish to reduce their fees.

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