Hargreaves Lansdown, the UK’s largest platform for private investors, is cutting the fees on its Lifetime ISA (LISA) and getting rid of them altogether for its Junior ISA in a bid to attract investors looking to pass on generational wealth.
Around 80% of UK wealth is held by those over 45. Younger people have become increasingly disadvantaged when it comes to investing and saving. Wages are rising, but failing to keep up with inflation which is also making it more difficult to save.
First time buyers are also struggling to get onto the property ladder due to higher mortgage rates and record rents, which make it harder to save for a deposit.
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The platform estimates over a third of Britain will receive an intergenerational wealth transfer over the next 30 years – but the tax implications that come with these can make it difficult for younger generations to fully benefit.
However younger generations can protect their wealth through the Lifetime ISA, which is aimed at those under 40 to help them save for their first property or a pension.
Savers can store up to £4,000 per tax year in a LISA, and the government will add a 25% bonus to this up to a maximum of £1,000 a year.
Furthermore parents or grandparents wanting to set up a nest egg for their children can make use of the £9,000 allowance that comes with a Junior ISA.
Hargreaves Lansdown’s new fees
To attract more customers to its platform Hargreaves Lansdown has cut the fee on its LISA, from 0.45% to 0.25% – meaning the first £1m of fund investments will be charged at 0.25%.
Equities are charged at 0.25%, and capped at £45 per year. The changes will apply to new and existing LISAs.
Junior ISAs will not be subject to any platform fees. HL is also removing trading commission and FX charges for online lump sum trading. Regular savings, dividend reinvestment and telephone dealing charges remain.
The changes come into effect from 13 March, and will also apply to new and existing JISAs.
HL charges 1% for automatic reinvestment with a minimum of £1 and a maximum of £10 per deal.
It’s estimated that a third of Britain will receive an intergenerational wealth transfer over the next 30 years, and protecting as much of this from tax will be a priority for many, especially as inheritance tax payments rise and the thresholds remain frozen.
How do other platforms compare?
These are the charges for other major platforms in the UK:
| Platform | Junior ISA Fee | Lifetime ISA fee |
| Hargreaves Lansdown | No fee, no FX charges. Regular savings, dividend reinvestment and telephone dealing charges remain. | 0.25% on the first £1m. Equities charged at 0.25%, capped at £45. |
| AJ Bell | 0.25%. Buy and sell investments for £1.50. | 0.25% on the first £250,000. 0.10% on anything between £250,000 and no charge on funds over £500,000. |
| interactive investor | Fee-free regular investing service. Trade shares from £5.99-£19.99. Reinvest your dividends for 99p. | ii does not offer a LISA. |
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