Hargreaves Lansdown 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 Hargreaves Lansdown ISA review to give you an insight into what this particular brokerage can offer you.
The Hargreaves Lansdown ISA offers an affordable way to save and invest for yourself, for your child, to retire or buy a new home.
Looking at the competition, Hargreaves Lansdown’s ISA offering stands out because of:
- The ability to hold a stocks and shares ISA, a LISA, a JISA, and a cash ISA.
- Hargreaves Lansdown (HL) is a reputable company that looks after over £120bn of client assets.
- A platform fee of just 0.45%.
- Free fund investing.
- A 12 month account satisfaction guarantee.
Want to know more about the Hargreaves Lansdown ISA? To ensure you completely understand this account, throughout this Hargreaves Lansdown ISA review, we’ll explain everything you need to know. 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 for most investments held within the tax wrapper, you don’t have to pay dividend or capital gains (CGT) tax on any income or growth. 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 down the line.
Lifetime ISA (LISA)
A Lifetime ISA (LISA) works slightly differently. You can only use £4,000 of your allowance towards this type of account. The main benefit is that you’ll get an automatic boost of 25%, so you can automatically earn a £1,000 bonus each year (plus any interest or investment gains).
However, a LISA can only be used for retirement savings or to buy your first house. Any other reason and the UK government will penalise you by 25%, which would actually leave you worse off than when you began. Any money also has to remain in the account for at least 12 months before you can use it.
Hargreaves Lansdown ISA at a glance
|🗺️ Supported Countries||UK|
|💰 Fund Investing Fees||£0|
|💰 Share Dealing Fees||£11.95 (reducing with more trading activity)|
|💰 Platform Fee||0.45% for funds (reducing based on portfolio size) + 0.45% for shares (capped at £45 per year)|
|💰 Cash ISA Fee||£0|
|💰 Inactivity fee||£0|
|🎮 Demo Account||No|
|📈 Portfolio Rebalancing||No|
|💵 Minimum deposit for S&S ISA/LISA/JISA||£100 (or £25/month)|
|💵 Minimum deposit for Cash ISA||£1|
|📍Investment Instruments||Funds, UK & international shares, investment trusts, bonds, ETFs, ready-made portfolios|
Types of Hargreaves Lansdown ISA accounts
There are four types of ISA accounts available with Hargreaves Lansdown:
- 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 or choose from the ready-made portfolios available.
- Investment LISA account: allows you to invest up to £4,000 each tax year. The fees and investment choices are the same as the regular S&S ISA, but with the LISA you also get the 25% government bonus.
- Cash ISA account: the cash ISA is held with Hargreaves Lansdown, but you can choose savings products from individual banks and building societies. You only need £1 to open some accounts and Hargreaves Lansdown doesn’t charge you anything, instead charging its banking partners.
- Junior ISA (JISA) account: allows you to invest on behalf of someone under 18. You can invest up to £9,000 each tax year, which doesn’t count towards your annual allowance. The child can only access the account once they turn 18. The fees and investment selection are the same as with the HL S&S ISA/LISA.
How the platform works
The sign-up process is relatively straightforward. If you head to the Hargreaves Lansdown homepage, select ‘our services’ at the top of the page and then navigate to the particular type of ISA account you want – just follow the on-screen instructions to get set up.
You can open up a stocks and shares ISA, LISA, or JISA with a £100 lump sum. Alternatively, you can set up a £25 monthly direct debit. If you want a cash ISA, the current account available only requires a £1 minimum (but this could change if a different product is used).
During the registration process, it’s best to have:
- Your national insurance (NI) number.
- Current address.
- A debit card or bank details.
So, you’re able to open up an investment ISA/LISA/JISA or cash ISA account quite easily. Just keep in mind that you can only open and pay into one type of ISA account each year. This means you’re able to open each type of account HL offers, but you couldn’t open the same types of account on other platforms and also pay into them both during the tax year.
Hargreaves Lansdown ISA fees
The costs and fees for the Hargreaves Lansdown ISAs aren’t the cheapest, and whether its good value will depend on how you like to invest. Here’s a table with everything laid out so that you can review the costs and fees yourself:
|Hargreaves Lansdown ISA Fee||Cost|
|Platform fee for funds||0.45% (up to £250,000)
0.25% (from £250,000 – £1m)
0.1% (from £1m – £2m)
Free (from £2m+)
|Platform fee for shares||0.45% (capped at £45 per year)|
|Share dealing||£11.95 (0 – 9 trades)
£8.95 (10 – 19 trades)
£5.95 (20+ trades)
|FX (foreign exchange) fee||1% (first £5,000)
0.75% (next £5,000)
0.5% (next £10,000)
0.25% (over £20,000)
How the Hargreaves Lansdown fees work
- How fees are paid – if you have cash in your account, this will be used. If you don’t have an active cash balance, HL will sell some of your investments to cover the fees – but they won’t charge you anything for doing this.
- Platform fees – there are essentially two platform fees, one based on the value of funds you hold and the other based on the value of your stocks and shares. For both fees, it’s a yearly percentage charged to your account on a monthly basis. With funds, there’s a tiered system, so the bigger your portfolio, the lower your fees (but with no overall cap). With stocks and shares, there’s a cap of £45 per year (£3.75 per month). If you only own funds, you won’t get charged the additional stocks and shares platform fee and vice versa.
- Share dealing fees – if you plan on buying stocks and shares (rather than just funds), the fee structure also works on a tiered basis. The more you trade, the lower your costs become. For the trade brackets shown, these are based on your previous month’s trading activity. So it best suits those who plan on making lots of trades on a frequent basis.
- FX fee – the foreign exchange fee also works on a tiered system and is based on the size of the international trade you’re making. The larger the trade, the lower your total FX fee will be.
Pros and cons of the Hargreaves Lansdown ISA
Here’s a quick summary of the main advantages and disadvantages of the HL ISAs available:
- Wide choice of investment options and research resources.
- Free fund trading.
- If you’re not satisfied with your account after 12 months, HL will refund your annual account charge.
- The ability to use a stocks and shares ISA, LISA, JISA, and a cash ISA.
- No fees or charges for a cash ISA and just a £1 deposit.
- You can invest and control your portfolio using the desktop service or mobile app.
- Reputable FTSE 100 company that’s well trusted.
- You can create a DIY portfolio or use a ready-made portfolio.
- Lower share dealing fees for regular traders.
- Competitive platform fees.
- Free withdrawals and no inactivity fees.
- Good customer service track record.
- Fee structure is quite confusing because everything is tiered.
- Expensive to buy or sell shares compared to some other ISA providers.
- FX fee for international trades is higher than other platforms.
- The minimum investment amount is quite high.
How it compares with other ISA providers
Throughout this HL ISA review, we’ve run you through most of the key benefits and downsides, but let’s take a look at how the Hargreaves Lansdown platform and its fees stack up against alternative ISA providers:
|Fees||Hargreaves Lansdown||Freetrade||Interactive Brokers||AJ Bell||Vanguard||iWeb||Barclays||InvestEngine||Interactive Investor||Halifax|
|Minimum investment||£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)||£2,000 or £100/month|
|Platform fees||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||£3/month|
|Share dealing fees||£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)||£9.50 for UK trades & funds (£0 for international trading and £2 for scheduled regular investments)|
|Foreign exchange fees (FX)||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)||1.25%|
Transfer your ISA with Hargreaves Lansdown
It is possible to transfer your existing ISA over to Hargreaves Lansdown. You might also qualify for cashback when doing so.
It’s possible to transfer:
- An existing stocks and shares ISA or a cash ISA to a new HL stocks and shares ISA.
- An existing JISA to a new Hargreaves Lansdown Junior ISA
- Other types of transfers aren’t currently supported.
Stocks and shares ISA transfer
The fastest way to carry out a stocks and shares transfer is online, but you can do it by post if you prefer. Here are the steps to follow using the online service:
- Open your stocks and shares ISA account.
- Register for the cashback offer here, and make sure the details match up with your account.
- Apply for a transfer with HL.
- Hargreaves Lansdown will contact your existing provider and start the transfer process.
- The transfer should take between 2 to 6 weeks to complete.
If you are moving investments that are also available with Hargreaves Lansdown, 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 Hargreaves Lansdown 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.
Hargreaves Lansdown ISA transfer cashback offer
HL is currently running a promotion that allows you to earn cashback based on the size of your ISA transfer. To qualify for the offer, you need to be registered and start your transfer before 16th March 2023.
Here’s how much cashback you could get depending on how much you transfer over:
|Your ISA transfer||Cashback|
|£4,000 – £9,999||£50|
|£10,000 – £19,999||£100|
|£20,000 – £39,999||£150|
|£40,000 – £59,999||£300|
|£60,000 – £79,000||£500|
|£80,000 or more||£1,000|
You can read the full terms and conditions for the offer at the bottom of this page.
Junior ISA transfer
The process of transferring an existing JISA is slightly different:
- To request a transfer, you’ll need to be the registered contact for the Child Trust Fund or Junior ISA.
- Transfers can be made as cash or as stock, although Child Trust Fund providers don’t always allow stock transfers.
- You need to read the HL key features and terms and conditions, including the tariff of charges pages.
- Download and complete the transfer form.
- Return the form to ‘Freepost HARGREAVES LANSDOWN’.
Again, you can transfer existing investments if they’re supported, or you can transfer cash. Just make sure to follow all the steps and use the official HL transfer service.
How safe is the Hargreaves Lansdown ISA?
Hargreaves Lansdown 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, HL is a public company on the FTSE 100 that’s been in business for over 40 years. So everything is very transparent and well-regulated. Hargreaves Lansdown is also responsible for over £120bn worth of assets held by its +1.7 million clients.
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 are 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.