Halifax ISA at a glance
With so many options for UK residents to save and invest tax-efficiently, it can be hard to find the right platform to use. So, we’ve created this Halifax ISA review to give you an insight into what this particular bank can offer you.
The Halifax ISA offers an affordable way to save and invest for yourself or your child.
Looking at the competition, Halifax’s investment and cash ISA offering stands out because of:
- The ability to hold a stocks and shares ISA, a JISA, and a cash ISA.
- With the investment ISAs, you can use DIY or ready-made portfolios.
- Open a stocks and shares ISA before 31st May 2024, and get up to £1,000 cashback on your first 5 transfers of £5,000 or more (Ts & Cs).
- No commission on international shares.
- Lower commissions for regular scheduled investments.
- A platform fee of just £3 per month.
Want to know more about the Halifax ISA? To ensure you completely understand this account, we’ll explain everything you need to know throughout this Halifax ISA review. This will include all the fees involved, the types of accounts available, how it compares against competitors, and the steps you need to take to transfer your ISA.
What is an ISA?
An ISA (individual savings account), is a tax-efficient account for saving or investing. There are a number of types of tax-efficient ISA accounts available to adult UK residents.
The main types of ISA accounts are:
- Cash ISA (£20,000 limit)
- Stocks and shares ISA (£20,000 limit)
- Lifetime ISA (£4,000 limit)
- Innovative Finance ISA (£20,000 limit)
- Junior ISA (£9,000 limit)
Each tax year, you get a £20,000 allowance that can be used for saving and investing with your ISA account. If you like, you can use this whole amount for your stocks and shares ISA, or split it across multiple types of ISAs. But keep in mind that the allowances can change yearly.
The main benefit of using an ISA is that you don’t have to pay dividend or capital gains (CGT) tax on any income or growth for most investments held within the tax wrapper. This allows your portfolio to grow and compound over the years without being held back by a tax burden.
If you use a cash ISA, you don’t have to pay any tax on interest earned. Again, this has the same benefit of allowing your savings to grow without a tax burden slowing things down. It also removes the need for you to have to report any interest received on a tax return.
Another significant benefit is that when you want to withdraw funds from your ISA, unlike with a pension, any money you take out doesn’t count towards your income for that year – meaning you pay no additional tax on your funds in future.
Halifax ISA at a glance
|🗺️ Supported Countries||UK|
|💰 Platform Fee||£36 per year|
|💰 Share Dealing Fees||£9.50 UK investments and funds|
|💰 International Share Dealing Fees||£0|
|💰 Cash ISA Fee||£0|
|💰 Inactivity Fee||£0|
|🎮 Demo Account||No|
|📈 Portfolio Rebalancing||Yes (with ready-made portfolios)|
|💵 Minimum deposit for Stocks and Shares ISA||£20 per month (£50 per month or £500 lump sum for ready-made)|
|💵 Minimum deposit for Cash ISA||£1 for variable rate/junior (£500 for fixed rate)|
|📍Investment Instruments||Funds, UK & international shares, investment trusts, bonds & gilts, ETFs, SPACs, ready-made portfolios|
Types of Halifax ISA accounts
There are four types of ISA accounts available with Halifax:
- Halifax stocks and shares ISA account: this is for adults over 18 based in the UK, and you can invest up to £20,000 into this type of ISA during the tax year. You can use this to become a DIY investor.
- Halifax investment ISA account: works similarly to the stocks and shares ISA account except that you can only choose from three ready-made portfolios. The platform fee is the same, but you’ll pay extra ongoing fees for portfolio management.
- Halifax cash ISA account: with the cash ISA, you can choose between a variable rate, fixed rate, or bonus saver. The ‘ISA Saver Variable’ lets you take money out whenever you want, and the deposit minimum is only £1, but the interest rate is lower. The ‘ISA Saver Fixed’ option means locking away your money for 1 or 2 years, and the minimum deposit is £500, but you get a higher interest rate. The ‘ISA Reward Bonus Saver’ can be opened with £1 and is only for ‘Reward Current Account’ or ‘Ultimate Reward Current Account’ holders. You get additional bonus interest if you make 3 or less withdrawals.
- Halifax junior cash ISA (JISA) account: allows you to save on behalf of someone under 18. You can save up to £9,000 each tax year, which doesn’t count towards your annual allowance. You can open the account with just £1 and the child can only access the account once they turn 18.
How does the Halifax ISA work?
The sign-up process is relatively straightforward, but more complex than with some other platforms. If you head to the Halifax homepage on your phone or desktop and navigate to the specific ISA page, you want to open and follow the instructions. During the registration process, it’s best to have:
- Your national insurance (NI) number.
- Current address.
- A debit card or bank details.
One major difference to some other ISA providers is that Halifax requires you to have some kind of account with the bank. So, you’ll need to have internet banking set up with them before opening an ISA online. You can also head to a Halifax branch and do in-person things if that’s easier. But, needing a bank or savings account can make opening a Halifax ISA more hassle than with some other providers.
Halifax investment ISA portfolio options
The investing strategy of Halifax involves using a mixture of equities, bonds, property, and cash. There are three ready-made portfolios available, organised by risk level and managed by the experts at Scottish Widows:
- Cautious: ~60% bonds, ~27% equities, ~7% property, ~6% other.
- Balanced: ~55% equities, ~29% bonds, ~7% property, ~9% other.
- Progressive: ~80% equities, ~9% bonds, ~7% property, ~4% other.
Keep in mind that these allocations can change, this is just to give you an idea of how the portfolios are currently arranged.
Halifax ISA fees
The costs and fees for the Halifax ISAs are pretty straightforward and good value compared to some other providers. How you invest will determine if it suits you because it’s cheapest for those who buy international shares or invest regularly. Here’s a table with everything laid out so that you can review the costs and fees yourself:
|Halifax ISA Fee||Cost|
|Platform fee||£36 per year (equal to £3 per month)|
|Cash ISA fee||£0|
|UK Share dealing||£9.50|
|International share dealing||£0 (plus fx fee)|
|Ready-made portfolio ongoing charge||0.21% – 0.23% (plus 0.05% – 0.14% transaction costs)|
|FX (foreign exchange) fee||1.25%|
How the fees for Halifax work
Here’s a bit more detail on the fees:
- How fees are paid – you have to pay for your account upfront yearly, and then individual trades are charged as you place each deal. For the ready-made options, the fees are baked in. So, depending on your choice, you’ll pay £36 plus a percentage fee (based on your portfolio and how much you’ve invested).
- Platform fees – this is called the ‘customer administration fee’; unlike other ISAs, this isn’t paid monthly. Instead, the full £36 is billed in April and collected in full each May. If there’s cash in your account, this will be used to pay it, if there’s not enough cash, Halifax will try and use your debit card, and if this fails – they’ll sell investments to cover the cost.
- Share dealing fees – if you plan on buying individual stocks and shares, there’s no commission for international shares – but for all other investments, there’s quite an expensive £9.50 commission. One way to get around this is to use the scheduled investment service, which reduces this commission to just £2 (perhaps a good option if you invest in ETFs or a select number of stocks regularly).
- FX fee – the foreign exchange fee applies to any international shares you buy and sell.
Pros and cons of the Halifax ISA
Here’s a quick summary of the main advantages and disadvantages of the Halifax ISAs available:
- Wide choice of investment options with the stocks and shares ISA.
- The investment ISA lets you use ready-made portfolios for a low fee.
- Free international share dealing.
- Invest from just £20 a month.
- The ability to use a stocks and shares ISA, JISA, and a cash ISA.
- No fees or charges for a cash ISA and just a £1 deposit (with some accounts).
- A reputable bank that’s part of Lloyds Banking Group.
- You can create a DIY portfolio or use a ready-made portfolio.
- Lower share dealing fees for regular traders.
- Competitive platform fee equivalent to £3 per month.
- Free withdrawals and no inactivity fees.
- Platform fee has to be paid in full each year.
- Buying or selling UK shares and investments is expensive compared to other ISA providers.
- FX fee for international trades is higher than other platforms.
- No app for investing.
- You need to be a Halifax banking customer.
- The bank doesn’t have a great customer service track record.
How it compares with other ISA providers
Throughout this Halifax investment and cash ISA review, we’ve run you through most of the key benefits and downsides, but let’s take a look at how the Halifax platform and its fees stack up against alternative stocks and shares ISA providers:
|Fees||Halifax||Hargreaves Lansdown||Freetrade||Interactive Brokers||AJ Bell||Vanguard||iWeb||Barclays||InvestEngine||Interactive Investor||NatWest||Moneybox||Nutmeg|
|Minimum investment||£20/month (or £50 per month/£500 lump sum for ready-made portfolios||£100 or £25/month||£2||£1||£500 or £25/month||£500 or £100/month||£1||£50||£100||£1 (or no tradings fees with £25/month min)||£50||£1||£500 (£100 for LISA & JISA)|
|Platform fees||£36/year (£3/month)||0.45%/year||From £4.99/month||£3/month (or free if your trade fees are more)||0.25%/year (max £3.50/month)||0.15%/year (+0.3% for managed portfolios)||£100 (one-off fee)||£4/month min (or 0.2% funds + 0.1% other investments) – capped at £125/month||£0||£4.99/month||0.15%||£1/month (plus 0.45%/month)||0.75% up to £100k then 0.35% after (for the fixed allocation portfolio it’s 0.45% up to £100k and 0.25% beyond)|
|Share dealing fees||£9.50 for UK trades & funds (£0 for international trading and £2 for scheduled regular investments)||£0 for funds/£11.95 for stocks and shares (reducing to £8.95 and £5.95 with more trades)||£0||£3 UK shares/€3 European shares/from $0.005 US shares||£1.5 for funds/£9.95 for stocks and shares||£0 (only funds available, no individual stocks and shares)||£5||£3 funds/£6 other investments + £1 transaction charge||£0; 0.25% fee for managed portfolios||£3.99 (you get 1 free trade a month, and some international shares cost £9.99)||0.07% maximum (plus a maximum ongoing charge of 0.4%)||£0 (ongoing fund charges of 0.12% – 0.58% depending on choice and 0% for US stocks)||0.21% – 0.3% average fund charge (plus 0.07% average market spread)|
|Foreign exchange fees (FX)||1.25%||1% (reducing to 0.75%/0.5%/0.25% for large trades)||0.45%||0.03%||0.75% (reducing to 0.5% and 0.25% for large trades)||None||1.5%||1% (reducing to 0.75%/0.5%/0.25%/0.1% for large trades)||None||1.5% (reducing to 1.25%/1%/0.5%/0.25% for large trades)||None||0.45%||None|
Transfer your ISA to Halifax
It is possible to transfer your existing ISA over to Halifax, and they do not charge to transfer in or out. You can transfer existing stocks and shares or cash ISA over to a new account with Halifax. Here’s how you can make a switch:
- Open and create an account with Halifax.
- Complete their online ISA transfer form.
- Once the transfer is complete, Halifax will send you a letter, and your investments will be shown online.
For most transfers, the process will take 4 to 6 weeks. However, some ISA transfers can take just 30 days to complete. You can also transfer over a LISA or Innovative Finance ISA, but you must go to a branch in person to discuss this.
If you are moving investments also available with Halifax, an ‘in-specie’ transfer is possible. Any stocks or shares that aren’t supported will be liquidated into cash during the transfer and moved over as funds for you to spend on new investments.
Always make sure that you use the official Halifax ISA transfer service. Don’t withdraw everything from your current provider and move it yourself because you could lose the tax protection you’ve built up over time.
How safe is the Halifax ISA?
Halifax is regulated by the FCA (Financial Conduct Authority), and is covered by the Financial Services Compensation Scheme (FSCS), which protects up to £85,000 of your deposits.
On top of this, Halifax is a major UK bank and part of the Lloyds Banking Group (the largest retail banking company in Britain).
How to pick the right stocks and shares ISA
Finding the right ISA for you depends on what you’re looking for and how regularly you invest. Here are some things to look out for and questions to ask yourself when you’re trying to find the best stocks and shares ISA:
- Does the platform offer commission-free trading in the UK, and how cheap is the platform and share dealing fees?
- Is there a discount for frequent investors?
- What is the investment choice like?
- Can you access multiple accounts, such as a LISA or JISA?
- How easy is it to use the platform, is there a mobile app?
- Do you have to pick all the investments, or are there ready-made portfolios?
- Is there a cheap FX fee if you plan on buying international shares?
- How reputable is the provider?
- Does the platform offer good customer service?
- Are there any incentives like free stocks or cashback for joining?
The truth is, there’s no single ‘best’ ISA provider. It’s all about finding the one that fits your needs as an investor. Many platforms structure costs and fees differently. So some will work out cheaper for you depending on what you invest in and how frequently.
As mentioned, you can open and pay into one stocks and shares ISA each tax year. So, if you try one out for a while and don’t like it or find it expensive for your needs, you can always transfer to another platform down the line.
How much interest do Halifax ISA investors get?
It depends on your account. If you have an investment ISA, your rate of return will depend on the investments you hold. If you have a cash ISA with Halifax, you can read about the various interest rates available here.
Is Halifax good for investing?
Yes! For some investors, the platform will be very cheap. Also, there’s a wide choice of investments and assets available for DIY investors, and Halifax also provides ready-made portfolios for beginners or passive investors.
What is a Halifax investment ISA?
The bank refers to its ready-made portfolios service as the ‘Halifax investment ISA’ and calls its DIY service the ‘Halifax stocks and shares ISA’ – but both are essentially just different versions of a stocks and shares ISA that allows you to invest using alternative methods.