There is plenty of choice around for investors when it comes to opening a stocks and shares Isa. DIY investing platforms such as Hargreaves Lansdown, AJ Bell and Interactive Investor have helped users to build and manage portfolios worth hundreds of billions of pounds.
They have built strong reputations for research and offer their own fund lists and portfolio management tools. However, they can have high trading fees, especially if you want to buy and sell shares for your Isa, and some may require you to purchase full shares rather than buying small or fractional units.
That can be pricey if you want to hold large stocks such as Amazon or Google owner Alphabet. New players have entered the market in recent years to offer investors different pricing models, flexibility and functionality, such as snazzy apps or the ability to invest your spare change.
Here, we look at some of the best apps and new platforms offering Isa options for this tax year, along with details of how much it would cost to invest with them.
Freetrade launched in the UK in 2018 and aims to make stock market investing more accessible and affordable for users. The Freetrade app can be downloaded on Apple and Android smartphones and lets investors buy and sell shares commission free.
You still have to pay 0.5 per cent stamp duty when purchasing UK shares plus there is a fee of 0.45 per cent on top of the exchange rate when buying international shares. The app doesn’t offer any of the vast research tools or calculators that you can get on the major investing platforms but it costs just £3 per month to hold your shares in an Isa wrapper.
Rather than buying full shares – which can be expensive when purchasing a stake in larger companies – Freetrade lets users get a portion of a stock, known as fractional shares.
There is a choice of more than 6,000 companies in Britain, the US and Europe on Freetrade. However, not all shares are available to everyone and you will need to pay £9.99 for Freetrade Plus if you also want to purchase other stocks, such as companies on the Alternative Investment Market and smaller American shares.
For a minimum investment of £1, Freetrade lets users invest in exchange traded funds and investment trusts but, unlike mainstream platforms, mutual funds aren’t available. A £5,000 Isa portfolio with Freetrade would cost £36 a year on the free option, or £119.88 when you include the £9.99 monthly fee for Freetrade Plus.
Moneybox has been around since 2015 and its app rounds up your spending to put aside spare change, encouraging you to start a savings habit. For example, if you spend £1.50 on a linked card, the Moneybox app will round this up to £2 and put the 50p in a savings account.
Users can hold their spare change in a stocks and shares Isa with Moneybox. It offers three fund portfolios – cautious, balanced and adventurous – depending on your individual investment attitude. There is also a range of tracker and exchange traded funds to choose from. Management of the Isa is left to the underlying fund managers, so you cannot buy and sell your own funds and shares.
The app charges a monthly subscription of £1, but it’s free for the first three months. There is also a Moneybox annual platform fee of 0.45 per cent, and fund charges can range from 0.12 per cent to 0.58 per cent.
A £5,000 portfolio after the first three months would cost £34.50 for a year, including the subscription and platform charge but before fund fees. Moneybox has a minimum investment of just £1 and also offers a Lifetime Isa and Junior Isa.
Launched in 2019, the Wombat Invest app lets users select from a range of themed funds and individual shares to create a personalised portfolio
that reflects their interests, lifestyle and beliefs. You can trade full or fractional shares and invest in more than 25 thematic exchange traded funds (ETFs) within an Isa.
ETF Investment themes include space, energy storage, computer games and snacks. Wombat Invest also lets users round up their everyday purchases to the nearest pound and add the difference or spare change into their investments.
The app charges £1 per month for unlimited trading plus a platform fee of 0.10 per cent. ETF charges can range from 0.07 per cent to 0.75 per cent. There is a minimum investment of £10 and a £5,000 Isa portfolio would cost £17 in the first year before ETF fees.
Investors can back climate impact-focused portfolios and earn tax-free returns through an Isa on the Clim8 app. Clim8 only launched last year, offering cautious, balanced and adventurous portfolios focused on sustainable stocks and funds tackling climate solutions, such as green energy and food production.
The portfolios have minimum investment of £25 and can be held in an Isa. Clim8 charges an annual platform fee of 0.6 per cent and the portfolios cost between 0.35 per cent and 0.5 per cent on average per year. A £5,000 Isa portfolio would cost £30 a year with Clim8, before portfolio fees are applied.
Chip’s savings app launched in 2017 and uses artificial intelligence and open banking technology to analyse your income and spending from your bank account, in order to assess how much you can afford to save each month.
This money can be put in an easy access cash savings account for free under the standard Chip account, or you can invest through a stocks and shares Isa for £3 every 28 days using ChipX. You can also choose your own amount to put into the Isa.
The investments are run by BlackRock and include three core funds – cautious, balanced and adventurous – as well as specialist clean energy, healthcare and emerging markets products. There is a 0.25 per cent annual platform fee on top of the £3 fee every 28 days for the ChipX account. Each portfolio will also have
a fund fee.
Chip has a minimum investment of £1 and a £5,000 investment would cost £51.50 with ChipX before fund fees.
Finding the right platform for you
Minimum Isa investment: £100 lump sum or £25 monthly for regular investing. Platform fee: Funds: 0.45% on the first £250,000, 0.25% on £250,000 to £1m, 0.1% on £1m to £2m. Extra 0.45% platform charge capped at £45 per year for holding shares. Trading fees: No charge for fund dealing; £11.95 for up to nine share trades per month, £8.95 for 10 to 19 and £5.95 for 20 or more; £1.50 for regular share investing.
AJ Bell Youinvest
Minimum investment: £500 lump sum or £25 monthly for regular investing Annual platform fee: Funds: 0.25% on the first £250,000, 0.10% on £250,000 to £1m, 0.05% on £1m to £2m, no charge on values over £2m. Shares: 0.25% of the value of shares, max £3.50 per month. Trading fees: £1.50 per month for funds; £9.95 for shares, reduced to £4.95 if 10 or more each month; £1.50 for regular investing.
Bestinvest (self-select option)
Minimum investment: £100 (dropping to zero in April). Annual platform fee: 0.4% up to £250,000, 0.2% £250,000 to £500,000, 0.1% £500,000 to £1m, free over £1m. Trading fees: Free for funds; £4.95 per share trade.
Minimum investment: £500 lump sum or £50 monthly for regular investing. Annual platform fee: Funds: 0.35%. Shares: 0.35%, min £2 a month, max £20 a month (Free platform charges if one share trade is made each month). Trading fees: Free for funds; £11.50 per share trade.
Minimum Isa investment: £100 for new investors or £25 to top up existing holding; £25 monthly for regular investing. Platform fee: Investor plan: £9.99 per month (one free trade per month and £7.99 after). Super Investor plan: £19.99 per month (two free trades per month, £3.99 for additional UK trades and US shares). Invest £25 per month and avoid trading fees. Regular monthly investing is free for all accounts.
Minimum investment: £1,000 lump sum or £25 monthly for regular investing. Annual platform fee: Less than £7,500: 0.35% if you have a regular savings plan or £45 if you don’t. Then 0.35% on £7,500 to £250,000, 0.20% on £250,000 to £1m and 0.20% on £1m+ Trading fees: Free for funds; £10 per online share trade; £1.50 for regular share investments.
Nutmeg (fully managed Isa portfolio)
Minimum investment: £500 Annual platform fee: 0.75% up to £100,000 and 0.35% beyond. Trading fees: n/a Moneyfarm Minimum investment: £500 Annual platform fee: 0.75% on the first £10,000, 0.6% on £10,000 to £50,000, 0.5% on £50,000 to £100,000, 0.35% above £100,000. Trading fees: n/a Wealthify Minimum investment: £1 Annual platform fee: 0.6% Trading fees: n/a M