In this article we review the 5 cheapest investment platforms for your £20,000 ISA. Many of you will think that £20,000 is a lot of money as a first-time investment and you’d be right, but it’s the annual limit you can invest in a tax-free ISA.
An ISA is effectively a tax-break allowing your investment to avoid any tax as it grows, like capital gains or dividend tax, so when it’s time to cash in, the money is all yours.
Most online investment services allow you to invest much less than £20,000, both as a one off or as a monthly investment. Typically, providers let you invest £500 as a one-off or £25 per month, helping you start your investment journey more affordably.
We want you to choose the very best investment provider for your needs, because making the wrong decision now can cost you thousands of pounds in the longer run.
Which provider to choose?
If you’re looking to start investing now, make sure you do some research before you leap. That’s where Compare+Invest comes in, as it can be really difficult comparing the service and costs of the 50+ online investment firms out there. Here, we’ll look at the cheapest Do It Yourself investment platforms – where you choose the investments and manage your choices on an ongoing basis.
It’s not scary to do and most providers offer ready-made solutions for those who feel a little daunted at picking funds and shares. Investment platforms all charge a fee for their services on top of the cost of the fund itself.
We will be comparing this annual administration cost in this feature and remember that as the value of your investments rise, so too will your annual charges, unless you pick a fixed-fee provider like interactive investor.
And of course, if you’re looking at investing a different amount, whether it’s for a financial goal or retirement, there are various calculators to help you at Compare+Invest.
Drum roll…. The results are in for the lowest cost £20,000 ISA!
Fifth place: Close Brothers
Close Bothers offers a DIY investing service as well as its better-known wealth management offering and is priced favourably for smaller portfolios but can get a bit pricey as your investments grow.
The annual cost of a £20,000 ISA portfolio is £103.70.*
Compare the Platform rating: 3/5.
Fourth place: Barclays Smart Investor
Barclays Smart Investor is competitively priced for smaller portfolios and has a decent – if not spectacular – range of value-added features, backed by a major institution.
The annual cost of a £20,000 ISA portfolio is £84.00.*
Compare the Platform rating: 3/5
Third place: Tillit
Tillit is a relatively new, modern and innovative market entrant and definitely worth a look for those who don’t want to be overwhelmed with complex features.
The annual cost of a £20,000 ISA portfolio is £80.00.*
Compare the Platform rating: 4/5
Second place: Vanguard Investor
Vanguard – a huge US fund manager – has taken the UK by storm with its low-cost, simple-to-use investment service, but be aware they only sell their own funds. For many this is not a problem, as they are low-cost, super popular funds.
The annual cost of a £20,000 ISA portfolio is £75.00.*
Compare the Platform rating: 4/5.
First place: AJBell YouInvest
Our cheapest provider is AJ Bell Youinvest, one of the biggest and most fully featured investment platforms in the UK, with competitive charges across the board. They have worked hard on making investing accessible for all levels of investor, although you might find the site a little overwhelming at first.
The annual cost of a £20,000 ISA portfolio is £71.70 *
Compare the Platform rating: 5/5.
*Pricing comparisons are based on a £20,000 ISA account, invested in passive funds/ETFs, with three trades per annum, at an average of £1,000 per trade.