Investment Platforms and Fees
Fees are one of the few things in investing you control. These guides explain how platforms charge and how small percentages compound over decades.
The charges most people pay
Most investors pay a platform fee for holding the account, fund charges taken inside each fund, and, depending on how they invest, dealing charges, currency fees and charges on cash. Our guide to platform fees explains each one, with worked examples.
Flat fee or percentage?
Platforms charge either a fixed amount or a percentage of your balance. Which costs less depends mainly on how much you hold: below a certain balance a percentage fee is usually cheaper, above it a flat fee is. The break-even point is simply the flat fee divided by the percentage rate.
Why it matters over decades
Charges are taken every year, whether your investments rise or fall, and money paid in fees loses all the growth it would have earned later. Try different charge levels in our compound interest calculator to see the difference on your own numbers.
How much difference does a 1% fee make?
In our worked example, someone invests £10,000 and then £200 a month for 30 years, and their investments grow 5% a year before charges. With no charges at all, they would end up with about £206,295. With charges of 0.3% a year, they would have about £193,803. At 1.0% it falls to about £167,854, and at 1.5% to about £151,750. So a 1.0% charge costs about £38,400 compared with paying nothing, almost half of the £82,000 they paid in, and 1.5% costs more than £54,000. These are illustrations, not predictions. The platform fees guide shows the full chart.
What to check before choosing a platform
Start with what you need the platform to do, then compare the costs for that. Check:
- which accounts it offers, such as a stocks and shares ISA, a Lifetime ISA, a Junior ISA, a SIPP or a general account
- whether its platform fee is a flat amount or a percentage, and whether there's a cap
- dealing charges for buying and selling funds and shares, and whether regular investing is cheaper
- the currency exchange fee if you'll buy overseas shares
- the interest it pays on uninvested cash
- any charges for transferring out
Finally, confirm the firm is on the FCA register.
Is your money protected if a platform fails?
FCA rules require platforms to keep clients' investments and money separate from the firm's own, so they shouldn't be used to pay the firm's debts. If an authorised investment firm fails and can't return what it holds for you, the Financial Services Compensation Scheme may pay up to £85,000 per person, per firm. That protection doesn't cover your investments falling in value.
Explore other topics
- Investing for BeginnersStart investing in the UK with plain-English guides on how investing works, the risks, what it costs and the tax-free accounts you can use.
- ISAs ExplainedHow ISAs work in the UK: the annual allowance, the different types of ISA, the tax rules and how cash ISAs differ from stocks and shares ISAs.
- Funds, ETFs and Index FundsWhat funds, ETFs, index funds and investment trusts are, how they differ, what they cost and how to read the key numbers on a fund factsheet.
- Pensions and SIPPsHow UK pensions and SIPPs work: tax relief, contribution limits, when you can access your money and how a SIPP differs from a workplace pension.
- Compound interest calculatorSee how regular investing grows over time, and how much difference fees make.