Hargreaves Lansdown slashes fees on ISA products
Hargreaves Lansdown has cut its fees for Lifetime ISAs and Junior ISA products in a bid to draw in younger investors.
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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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. |
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
Nic studied for a BA in journalism at Cardiff University, and has an MA in magazine journalism from City University. She joined MoneyWeek in 2019.
-
Three gold mining stocks with strong green credentials
Personal View Tom Bailey of HANetf highlights three gold and precious metal miners to consider.
By Tom Bailey Published
-
Autumn Budget 2024: chancellor scraps high income child benefit reforms
Plans to move child benefit eligibility to a household income system have been shelved
By Marc Shoffman Published
-
Act now to bag NatWest-owned Ulster Bank's 5.2% easy access savings account
Ulster Bank is offering savers the chance to earn 5.2% on their cash savings, but you need to act fast as easy access rates are falling. We have all the details
By Marc Shoffman Last updated
-
Moneybox raises market-leading cash ISA to 5%
Savings and investing app MoneyBox has boosted the rate on its cash ISA again, hiking it from 4.75% to 5% making it one of top rates. We have all the details.
By Ruth Emery Published
-
October NS&I Premium Bonds winners - check now to see what you won
NS&I Premium Bonds holders can check now to see if they have won a prize this month. We explain how to check your premium bonds
By Kalpana Fitzpatrick Published
-
Bank of Baroda closes doors to UK retail banking
After almost 70 years of operating in the UK, one of India’s largest bank is shutting up shop in the UK retail banking market. We explain everything you need to know if you have savings or a current account with Bank of Baroda
By Vaishali Varu Published
-
How to earn cashback on spending
From credit cards and current accounts to cashback websites, there are plenty of ways to earn cashback on the money you spend
By Vaishali Varu Last updated
-
John Lewis mulls buy now, pay later scheme
The CEO of John Lewis has said the retailer will consider introducing buy now, pay later initiatives for lower-priced items.
By Pedro Gonçalves Published
-
State pension triple lock at risk as cost balloons
The cost of the state pension triple lock could be far higher than expected due to record wage growth. Will the government keep the policy in place in 2024?
By Nicole García Mérida Last updated
-
Paragon raises rate on one-year fixed cash ISA to 5.75%
Paragon Bank ups its one-year fixed cash ISA rate to 5.75% - is it enough to top the table?
By Vaishali Varu Published