Broker comparison: cheap investment platforms UK

Find the cheapest investment platforms in the UK and make broker comparison easier with our tables below. Investment costs are all-important, so we’ve placed the cheapest brokers at the top of each table.

^{Disclosure: Links to platforms may be affiliate links, where we may earn a small commission. It doesn’t affect the price you pay nor how we judge the brokers. This article and the comparison table are not personal financial advice. Your capital is at risk when you invest.}

You can get cashback with transfers and new accounts

So-called ‘ISA season’ is the busiest time of the year for special offers.

The 5 April deadline for using up this tax year’s £20,000 ISA allowance fast approaching. Hence all the investing platforms ramp up their marketing efforts to try to secure our cash.

People are more minded to transfer existing ISAs in the final few months of the tax year, too. Therefore the brokers are ready to pay big bonuses to win chunky accounts.

And there are invariably deals for transferring SIPPS as well.

I guess everything is up for grabs in ISA season! 

Terms and conditions apply with all offers, and your capital is at risk when you invest.

Offers do get rotated by the platforms. And there’s often a deadline to create a bit of urgency amongst the target customers. (Um, that’s you and me…) 

Make sure then to check the dates when you review the conditions. You’ll want to be sure you can complete your deposit or transfer in time to qualify for any cashback or other perks.

Current offers include:

• Get up to £1,500 cashback when you transfer your cash and/or investments through this link. Terms apply – Charles Stanley

• Open an account with low-cost platform InvestEngine via our link and get up to £100 when you invest at least £100 (T&Cs apply. Capital at risk) – InvestEngine

• You can get up to £3,000 cashback when you transfer your pension to Interactive Investor. Terms and fees apply. – Interactive Investor

Follow the affiliate links to jump to the relevant promotions. Please remember, sign-up bonuses should be seen as just a bonus – not the only reason to choose a broker.

How to compare brokers using our table below

The table shows the most important costs charged by the main brokers / investment platforms serving the UK market. 

Brokers often charge additional fees for ancillary services. These may or may not apply to you, so always check your chosen platform’s fee schedule before you commit. 

The UK brokerage market is diverse and fiercely contested. To make things easier, we’ve split the field into three tables based on the main dividing lines:

• Percentage-fee brokers charge account fees as a percentage of your portfolio’s value. For example, if a broker’s fee is 0.2% and your portfolio is worth £1,000, then you’d pay £2 in annual fees. (This maths assumes the portfolio’s value remained unchanged for simplicity’s sake. Obviously you hope it will grow in practice!) Percentage-fee brokers are usually a good deal for people with small portfolios. 

• Flat-fee brokers typically levy a fixed charge for their services. Say £100 a year, regardless of whether your portfolio is worth £1,000 or £1,000,000. Such a flat fee is a bad deal for an investor with a small portfolio. But it’s much better value for somebody with a large holding. Our millionaire portfolio owner would pay £2,000 to the percentage-fee broker in the percentage-fee example above! (Competition among UK brokers has caused the lines to blur between percentage-fee and flat-fee brokers in recent years. Some brokers now combine the two fee models. In this case, we place the broker in the table best aligned to their fee schedule.)

• Trading platforms – these brokers primarily cater for day traders and active stock pickers. The user interfaces are typically complex, with little guidance for beginners. There may be a wide range of exotic securities available to trade. These platforms are strictly for people who really know what they’re doing, or who can afford to lose a lot of money. 

• Zero-fee brokers are gaining in prominence in the UK. They require a deeper discussion. There’s more info on these market disruptors in the text below our tables, along with additional tips to help you compare brokers.

• Trading fees are the other main revenue stream for brokers. Estimate how often you’re likely to trade to calculate which platform is best for you. For example, one buy per month and around six sales per year. Don’t worry about precision. You just need a number that’s in the rough ballpark. Also, look out for regular investing schemes that reduce the cost of trades at many brokers. 

• Mobile users: to see all the columns of our broker comparison table, please rotate your phone to landscape view.

Flat-fee investment platforms charge a fixed cost for their services. This pricing model is typically better for investors with large portfolios.

That’s because percentage fees can carve off huge chunks of cash from your wealth if your platform doesn’t cap them.

Percentage-fee platforms are best for people starting out with relatively little money invested. That’s because you’re only losing a modest amount of cash when a percentage charge is skimmed from your small pot.

Conversely, flat fees take a disproportionately large bite out of a diminutive portfolio. That sets you back because you’ve got less wealth left to compound.

We’ve explained how to calculate whether or not you should use a flat-fee or percentage-fee broker.

Trading fees are also typically charged at a fixed rate. Try to keep such costs under 1% of your monthly investment contributions. Look out for cheap regular investing plans and zero commission trading in funds or ETFs to staunch your percentage loss to dealing fees.

We define a trading platform as a stock broker that encourages its users to buy and sell frequently.

To this end, some trading platforms promote speculative instruments such as Contracts For Difference (CFDs), currencies, and crypto.

They also provide a fast-moving, information-saturated environment that emphasises hyperactivity.

Platform fees are low-to-zero in this space. Revenue is instead generated by trading fees, spreads, and other methods.

Stick to the top two tables if your focus is on investing for the long-term in funds and ETFs.

Investment platforms comparison notes

Charges may actually be due per month, quarter, six-monthly, or annually. Our broker comparison tables simplify that into an annual cost of service, including VAT.

Other charges may be applicable that aren’t included.

Asterisked (*) trading fees indicate that a frequent trader rate is available. (**) Indicates that the price is cheaper when account balance passes certain thresholds.

Accounts held with Halifax / Bank Of Scotland, Lloyds Bank, and iWeb count as one for the purposes of the Financial Services Compensation Scheme (FSCS).

To reiterate, like other price comparison websites we may be paid a bonus if you sign-up via a link. This does not affect what you pay.

This table is edited by fallible human beings. Do your own research. We fix mistakes as soon as possible but we cannot be held liable or accountable for any errors. Please add updates or erratas in the comments below.

Cheap investment platforms: Good for column

The Good for column indicates a broker’s key strength, if any. 

In particular we pick out brokers which are cheapest for fund portfolios and ETF portfolios.

Zero fee brokers are obviously tough to beat on price. 

Thus InvestEngine currently tops the table for zero-fee ETF portfolios while Prosper does the same for fund portfolios. 

Some investors are nervous about the sustainability of businesses that don’t charge explicit fees. 

However, zero fee brokers generally make money from spreads, foreign exchange fees, and cross-selling of other services. (You’re not getting something for nothing!)

Zero fees may also be offered by firms seeking scale. In that case, they may plan to levy more fees later, when they switch their focus to profitability, and their backers demand a return on their investment.   

Zero fee brokers are suited to small investors for two reasons:

• A small investor’s return can quickly be eaten up by fixed fees
• A small portfolio is easily covered by the Financial Services Compensation Scheme’s (FSCS) £85,000 limit should a broker fail. (See below for more.)

For these reasons, we’ve name-checked brokers in the ‘Good for’ column that are excellent value for money and sustained directly by transparent account and trading fees. 

If you’re diversifying across two or more brokers, you may also find it advantageous to look at the best value percentage-fee brokers if your portfolio is split into small enough pieces. 

Finally, note that our ‘Good for’ cheapest broker calculations assume one purchase per month and four sales per year. We also assume that you take advantage of lower-priced regular investment schemes when available.

Naturally, the cheapest non-zero fee broker for you may well be different, depending on your actual trading costs. 

Cheapest broker FX fees

Foreign exchange charges are paid for trading in securities that are listed in currencies other than sterling (GBP). Typically those securities are international shares and some ETFs.

FX fees are also due when a broker converts overseas dividends and interest into GBP.

• These costs are levied as a percentage of each transaction.

• Assume they’re layered on top of the FOREX spot price.

• If we list an FX fee of £0, you’ll still pay the spot price where FX fees are applicable.

Please see our tips for avoiding FX fees. If your fund’s base currency is GBP then this cost won’t apply at the broker level.

Variable FX fees means you’ll have to contact the broker for its in-house rate before every trade if you want to know exactly how much you’ll pay in advance.

Not disclosed in the table means the platform does not disclose FX fees prominently on its website. It has also not responded to our enquiries about its rates.

FX fees aren’t an issue if a broker only stocks funds with a GBP base currency. This should be noted on a fund’s factsheet.

Some brokers use a tiered FX fee rate card. In other words, the percentage rate decreases on the amount of a transaction that falls into higher tiers. Please refer to your broker’s website for its full schedule where our table indicates it operates tiered pricing.

What matters when comparing brokers

Investment platforms, stock brokers, and share dealing services are interchangeable names for websites or apps that enable you to trade and manage your portfolio of shares, funds, ETFs, and other investments online.

When you compare brokers, bear in mind that there isn’t a best investment platform out there that suits everybody. The stock broker market is competitive. Players try to standout by offering different pricing models and market niches.

The total price you pay for brokerage services is critical. That’s because controlling costs is a crucial factor in determining your long-term investment performance.

As investing luminary John Bogle said:

The two greatest enemies of the equity fund investor are expenses and emotions.

Our UK stockbrokers list can’t take the emotion out of investing but it can help you find the cheapest investment platform.

The best UK broker for you is likely to provide:

• Low fees for the services you use most.

• The shares, funds, ETFs, and other investments you want. Platforms do not all carry the same range of products.

• The right level of customer service for your needs. Don’t expect the lowest-cost platform to respond like lightning when you want it to handle complicated arrangements over the phone.

• The right user experience. If you want a flashy website and app then you’ll be able to tell who provides that from its home page. A broker with a clunky website and dirt-cheap fees is unlikely to prioritise investing in cutting-edge tech.

Check your investment platform is authorised by the FCA

If your investment platform is authorised by the Financial Conduct Authority (FCA) then you may be entitled to compensation using the Financial Services Compensation Scheme (FSCS).

Check a broker’s status using the FCA register.

Some platforms are owned by the same financial group. You do not diversify your risk by splitting assets across brands owned by the same group. Our investor compensation scheme guide (linked to above) explains how you can identify these brands.

Some brokers are based abroad – especially those listed in the Trading platforms table. Double-check they’re eligible for the FSCS compensation scheme.

Most investments are not covered by the FSCS. They’ll step in if your broker goes bust, but not if your ETF provider or Investment Trust does.

However, you can build a portfolio from funds that are protected by the FSCS scheme, if you use UK-domiciled OEICs and Unit Trusts.  

Broker comparison: costs and fees

The annual fee category is intended to capture the various types of service fee typically levied by investment platforms. For example custody fees, platform charges, administration fees, inactivity fees and so on, until the end of time / your tether.

Fee notes includes extra charges, options, inclusions, and exclusions that make a material difference to the price you pay.

A tiered fee means you’ll pay different amounts depending on the total value of your account(s).

For example:

• 0.25% up to £250,000 (tier 1)
• 0.1% £250,000 – £500,000 (tier 2)

If your account was worth £250,500 then you’d only benefit from the lower charge on the £500 that fell into tier 2. The remaining £250,000 would still be charged at the tier 1 rate of 0.25%.

Some brokers add up the total value of all your accounts with them when applying their tiers.

However others assess each account separately.

In this scenario (still using our tiered example rate above), you’d pay the tier 1 rate of 0.25% on your entire balance if you had £200,000 in an ISA and £200,000 in a SIPP.

Most brokers count joint accounts separately from your individual account balances.

SIPP charges on the table don’t necessarily include all the various additional fees levied for services once you’re in drawdown.

The drawdown fee we do include is the annual charge you’ll pay for flexi-access drawdown. We’ll also include the fee for taking 25% tax-free uncrystallised funds pension lump sum (UFPLS) payments, if available.

Platforms levy various additional costs for extras such as telephone trading.

Check their full rates and charges schedule before committing.

Brokers also run temporary offers and discounts from time-to-time. Don’t let these sway your decision.

(Obviously they’re a lovely “How Do You Do?” if you were going to choose that platform anyway.)

Investment fees for funds, ETFs, and other products

Stockbroker charges add to the investment fees you pay to fund providers for the management of their funds, ETFs, and investment trusts.

To ensure you’re paying competitive management fees, compare:

• Low-cost index funds and ETFs
• Best global tracker funds
• Best bond funds and ETFs
• Best multi-asset funds
• Vanguard LifeStrategy funds

Certain big name brokers sometimes negotiate small discounts on fund charges. If you’re tempted by those ‘bargain’ offers then make sure that your total cost of investment isn’t more expensive once you load on the investment platform’s fees.

This post shows you how to calculate a total portfolio cost for all the products you own.

Understanding account names

Accounts names vary across the online broker universe. However they typically conform to the following types:

• Trading – a taxable account often known as a General Investment Account (GIA) or brokerage account. Your investments are not tax-sheltered as they would be in a stocks and shares ISA or a SIPP. You will incur dividend income tax and capital gains tax on your investments if you exceed your allowances.

• Shares ISA / Flexible Shares ISA – a stocks and shares ISA. Tax-sheltered. Sometimes known as a Self-select ISA. A Lifetime ISA (LISA) is a special variant of a stocks and shares ISA.

• SIPP – Self-Invested Personal Pension. Tax-sheltered.

• JISA/JSIPP – A JISA is an ISA for kids. A JSIPP is the same for a SIPP.

Switching investment platform

Once you’ve decided to move, it’s fair to say that switching investment platforms isn’t as simple as it is with bank accounts.

For starters, beware of entry and exit fees when transferring your investments. These charges are shown in our broker comparison tables.

Entry fees may be charged by your new platform and exit fees may be charged by your old one.

You can expect a transfer to take several weeks and involve some form filling.

• Always tick the box that requests your investments are transferred ‘in specie’ rather than sold down to cash as part of the switch.

• Make a record of everything you own in your portfolio, including how many shares / units you have.

• Finally, double-check your instructions have been carried out to the letter. Mistakes are surprisingly common.

Take a look at our specialised guides before you make a move:

• Stocks and shares ISA transfers 
• Pension transfers 

Why are there only links to some brokers?

Links to brokers and investment platforms are affiliate links, where we may be paid a fee if you go on to open an account with them.

However we do not choose to include platforms in our table based on whether such affiliate fees are on offer, nor does the existence of such an arrangement change the fees you pay. It is a marketing payment made by the companies as an incentive for websites to drive traffic to their site.

We’d like more brokers to pay us when we introduce new customers. It helps us pay our way on Monevator!

Including all brokers – but only linking where an affiliate agreement is in place – is our best compromise.

What this UK stockbrokers list won’t tell you

For in-depth customer feedback on individual platforms, ask in our comments below or at Money Saving Expert’s Savings & Investments board, the ex-Motley Foolers on the Lemon Fool board, or Reddit for a broader opinion.

We also have no insight into the solvency, trustworthiness, or competence of any broker. 

Where is my missing trading platform?

We haven’t included every last option in our broker comparison table but we have included the most competitive players in the market.

We filter out any broker that:

• Is too expensive

• Excludes index funds and London Stock Exchange ETFs

• Provides an extremely narrow investment range to the point that diversification is hampered

We also don’t currently include platforms that exclusively provide managed investment services such as ‘robo-advisors’.

That’s because we believe most people are better off managing their own investments at a lower cost using a DIY passive investing strategy.

Do let us know if you think we’ve missed anyone or anything important.