If you commonly get your finance-related content from social media platforms like YouTube, then you will most likely have come across terms such as a Traditional 401(k), Roth 401(k), and Roth IRA quite regularly, especially if you follow US content creators. These are retirement accounts under US tax law, so they are not available to you as a UK investor.
Their appeal comes from the tax benefits, but also from the control they give you over your investments, unlike many pension products where your only input is telling the provider your risk tolerance.
In the UK, you can get similar benefits from Individual Savings Accounts (ISAs), Self-Invested Personal Pensions (SIPPs) and your workplace pension.
In this article, we explain how each account works, which UK account is closest to each US account, and which online providers offer ISAs and SIPPs in the UK, with their fees as of October 2026.
Key differences between a 401(k) and equivalents in the UK
If you would like to place your funds into an investment vehicle that is as similar as possible to a Traditional 401(k), Roth 401(k), or a Roth IRA, then it is firstly important to know how each of them compares in terms of their tax benefits and how quickly you can access your funds.
Here is a comparison of the key characteristics of a Roth IRA (Individual Retirement Account), a Roth 401(k) and a Traditional 401(k), using the 2026 limits set by the IRS):
| Differences | Roth IRA | Roth 401(k) | Traditional 401(k) |
| Tax on contributions | Made with after-tax dollars | Made with after-tax dollars | Usually made before tax |
| Contribution limits | $7,500 a year, or $8,600 if you are 50 or over (income limits apply) | $24,500, or $32,500 if you are 50 or over ($35,750 at ages 60 to 63) | $24,500, or $32,500 if you are 50 or over ($35,750 at ages 60 to 63) |
| Tax-free growth? | Tax-free | Tax-free | Tax-deferred: growth is only taxed when you withdraw |
| When can you withdraw? | Contributions at any time. Earnings are tax-free once the account is at least 5 years old and you are 59½ or older | From 59½ (a 5-year rule also applies) | From 59½ |
| Tax on withdrawals | None on qualified withdrawals | None on qualified withdrawals | Ordinary federal income tax, plus state tax where it applies |
| Can your employer contribute? | No, IRAs are individual accounts (employers use SEP or SIMPLE IRAs instead) | Yes. Employer matches made as Roth contributions are taxable when made | Yes, and employer contributions are generally not taxed when made |
| Can you choose your own investments? | Yes | Yes, within the investment menu of your employer’s plan | Yes, within the investment menu of your employer’s plan |
US retirement accounts, 2026 limits. Source: IRS. Roth IRA contributions phase out between $153,000 and $168,000 of income for single filers and $242,000 to $252,000 for married couples filing jointly.
Here is how the equivalent accounts work in the UK (2026/27 tax year):
| Differences | ISAs | SIPP |
| Tax on contributions | Paid from income that has already been taxed | Tax relief of 20% to 45% depending on your income (up to 48% in Scotland) |
| Contribution limits | £20,000 a year in total across Cash, Stocks and Shares, Innovative Finance and Lifetime ISAs. Lifetime ISA: £4,000 (within the £20,000). Junior ISA: £9,000 (separate allowance). From 6 April 2027, Cash ISAs are capped at £12,000 for under-65s | Up to 100% of your earnings, capped by the £60,000 annual allowance (£3,600 gross if you have no earnings) |
| Tax-free growth? | No capital gains tax or income tax on dividends and interest | No capital gains tax or income tax on dividends and interest |
| When can you withdraw? | At any time (Lifetime ISA withdrawals before 60, other than for a first home, carry a 25% charge) | From 55, rising to 57 from 6 April 2028 |
| Tax on withdrawals | None | Usually 25% tax-free (up to £268,275 in total), the rest taxed as income |
| Can your employer contribute? | Not directly. Money from your employer arrives as taxed salary | Yes, if the provider accepts employer contributions |
| Inheritance tax | Part of your estate | Unused pensions fall into your estate from 6 April 2027 |
| Can you choose your own investments? | Yes | Yes |
UK tax wrappers, 2026/27 tax year. Sources: GOV.UK (ISAs) and GOV.UK (pensions).
Which UK account is closest to each US account?
There is no exact copy of a 401(k) in the UK, but each US account has a close match:
| US account | Closest UK equivalent | Why |
| Roth IRA | Stocks and Shares ISA | After-tax money goes in, and growth and withdrawals are tax-free |
| Traditional 401(k) | Workplace pension or SIPP | Tax relief on the way in, taxed as income on the way out (apart from the 25% tax-free part) |
| Employer 401(k) match | Workplace pension (auto-enrolment) | Employers must contribute at least 3% of qualifying earnings, with a minimum of 8% in total |
| Roth 401(k) | No direct match | The closest set-up is a Stocks and Shares ISA alongside your workplace pension |
Source: InvestingInTheWeb analysis based on IRS and GOV.UK rules. Auto-enrolment minimums from GOV.UK.
An explanation of each type of ISA
There are five types of ISA: Cash ISA, Stocks and Shares ISA, Innovative Finance ISA, Lifetime ISA and Junior ISA.
In the 2026/27 tax year, your ISA allowance is £20,000. You can either split your annual allowance across multiple ISAs (for example, £10,000 in a stocks and shares ISA and £10,000 in a cash ISA) or keep it all in one. Since April 2024, you can also pay into more than one ISA of the same type in the same tax year (the exceptions are Lifetime ISAs and Junior ISAs).
You cannot carry over your ISA allowance. If you don’t use your whole allowance in a tax year, it will be lost.
Note that a change announced in the Autumn Budget 2025 takes effect on 6 April 2027: savers under 65 will only be able to pay up to £12,000 per year into a Cash ISA, while the overall £20,000 allowance stays the same. Savers aged 65 and over keep the full £20,000 Cash ISA limit.
- Cash ISA: a savings account for short-term or emergency money.
- Stocks and Shares ISA: an investment account used to buy shares, ETFs (exchange-traded funds), funds and bonds.
- Innovative Finance ISA: available since 2016 and designed for peer-to-peer (P2P) lending, where you lend money to businesses or individuals through a platform. P2P loans are not covered by the FSCS.
- Lifetime ISA: for a first home or retirement. You can open one between 18 and 39 and pay in up to £4,000 a year until you turn 50, and the government adds a 25% bonus (up to £1,000 a year). It is the most restricted type of ISA, and the government has announced plans to replace it with a new ISA for first-time buyers, so check the latest rules before opening one.
- Junior ISA: a cash or investment account for children under 18. You can pay in up to £9,000 a year, which does not reduce your own ISA allowance, and the money belongs to the child at 18.
Keep reading to see which online providers offer each type of ISA.
What is a SIPP (Self-Invested Personal Pension) and how does it work?
A SIPP (Self-Invested Personal Pension) is a personal pension where you choose the investments yourself, from funds and ETFs to individual shares and bonds.
Like any pension, your contributions get tax relief at your marginal rate, from 20% to 45% (up to 48% in Scotland). The provider claims basic-rate relief for you, so a £80 payment becomes £100 in your SIPP, and higher and additional-rate taxpayers claim the rest through their tax return. You can contribute up to 100% of your earnings each tax year, capped by the £60,000 annual allowance, and you can carry forward unused allowance from the previous three tax years.
There are a few limits to know about:
- Tapered allowance: if your adjusted income is above £260,000, your annual allowance falls gradually to as little as £10,000.
- Money purchase annual allowance: once you start taking taxable income from a pension, your allowance for further contributions drops to £10,000.
- Inheritance tax: from 6 April 2027, unused pension funds will count towards your estate for inheritance tax purposes.
Below, we go through the main online providers that offer SIPPs and ISAs in the UK.
Online brokerages that offer ISAs/SIPPs in the UK
| Broker | Stocks and Shares ISA | Cash ISA | Lifetime ISA | Innovative Finance ISA | Junior ISA | SIPP |
| Interactive Brokers | ✔ | ✘ | ✘ | ✘ | ✔ | ✔ |
| Trading 212 | ✔ | ✔ | ✘ | ✘ | ✘ | ✔ |
| XTB | ✔ | ✔ | ✘ | ✘ | ✘ | ✘ |
| Freetrade | ✔ | ✘ | ✘ | ✘ | ✔ | ✔ |
| Vanguard | ✔ | ✘ | ✘ | ✘ | ✔ | ✔ |
| Fidelity | ✔ | ✘ | ✘ | ✘ | ✔ | ✔ |
| Saxo | ✔ | ✘ | ✘ | ✘ | ✘ | ✔ |
| Hargreaves Lansdown | ✔ | ✔ | ✔ | ✘ | ✔ | ✔ |
| Interactive Investor | ✔ | ✘ | ✘ | ✘ | ✔ | ✔ |
| AJ Bell | ✔ | ✘ | ✔ | ✘ | ✔ | ✔ |
Accounts available as of October 2026. Source: providers’ websites.
Interactive Brokers (IBKR)
Accounts on offer: Stocks and Shares ISA, Junior ISA and SIPP (through third-party SIPP administrators).
Fees: there is no platform or custody fee on any account type.
UK shares cost £3 per trade up to £6,000 and 0.05% of the trade value above that. US shares cost $0.005 per share (minimum $1), and currency conversion costs 0.002% (minimum $2). A minimum monthly activity fee of £3 applies to the ISA, which is covered as soon as you pay £3 in commissions in the month. SIPP administration fees depend on the third-party administrator you choose.
Interactive Brokers has one of the most complete platforms in terms of markets and tools, such as Trader Workstation. It suits experienced investors best, as it can feel daunting for beginners. Note that IBKR does not accept US citizens or US residents trading through a SIPP.
Trading 212
Accounts on offer: Stocks and Shares ISA, Cash ISA and SIPP.
Fees: the Stocks and Shares ISA has no platform fee and no commission (other fees may apply, see terms and fees). A 0.15% FX fee applies when converting funds. Other fees may apply. The Cash ISA is a flexible savings account with a variable interest rate (check Trading 212’s website for the current rate).
Trading 212 launched its SIPP in 2026, with no platform fee. It currently accepts personal contributions only and does not offer flexi-access drawdown, so it suits the saving years better than retirement itself. Trading 212 does not accept US citizens or US tax residents.
Trading 212 has a user-friendly mobile app and web platform, with features such as Pies and AutoInvest that make it easier to build a diversified portfolio and invest on a schedule.
Sponsored Link: To get free fractional shares worth up to £100, you can open an account with Trading 212 through this link. Terms apply.
Disclaimer: Pies & AutoInvest is an execution-only service. Not investment advice or portfolio management. Automatic investing refers to executing scheduled deposits. You are responsible for all investment and rebalancing decisions. When investing, your capital is at risk and you may get back less than invested. Past performance doesn’t guarantee future results.
XTB
Accounts on offer: Stocks and Shares ISA and Cash ISA.
Fees: no platform or account fees. Other fees may apply (see below).
XTB offers a Flexible Stocks & Shares ISA in the UK, as well as a Flexible Cash ISA, where you can:
- Invest in stocks and ETFs with 0% commission up to a monthly trading volume equivalent to €100,000 (after that, 0.2% with a minimum of £10). A 0.5% currency conversion fee may apply.
- Earn a variable rate of interest on uninvested GBP cash (check XTB’s website for the current rate).
- Withdraw money and replace it within the same tax year without using up more of your annual allowance (the ISAs are flexible). Note that XTB does not currently accept Cash ISA transfers in.
Hargreaves Lansdown
Accounts on offer: Stocks and Shares ISA, Cash ISA, Lifetime ISA, Junior ISA and SIPP.
Fees: Hargreaves Lansdown charges an annual platform fee and dealing charges. Its pricing was overhauled on 1 March 2026, when the platform fee fell from 0.45% to 0.35% and online share dealing fell from £11.95 to £6.95.
For shares, ETFs, investment trusts and bonds, the annual charge is 0.35%, capped at £150 a year in the Stocks and Shares ISA, the SIPP and the Fund and Share Account. For funds, the charge is 0.35% on the first £250,000, with lower rates on larger balances. Buying and selling funds now costs £1.95 per deal, while monthly regular investing remains free.
| Charge | Cost |
| Platform fee (shares, ETFs) | 0.35% (max. £150 a year) |
| Platform fee (funds) | 0.35% on the first £250,000 |
| Online share dealing | £6.95 |
| Online fund dealing | £1.95 |
| Regular investing | Free |
| FX fee | 0.99% on the first £10,000 |
Hargreaves Lansdown charges from 1 March 2026. Source: Hargreaves Lansdown.
The same fee structure applies to the SIPP.
Even after the cut, Hargreaves Lansdown is one of the more expensive platforms for share investors, and its 0.99% FX fee makes international shares costly. In return, it offers a broad range of investments, research and a paid financial advice service, which many execution-only brokers do not.
Freetrade
Accounts on offer: Stocks and Shares ISA, Junior ISA (paid plans only) and SIPP.
Fees: the Stocks and Shares ISA and the SIPP are included in Freetrade’s free Basic plan, with no platform fee and no dealing commission.
The main cost to watch is the FX fee on non-GBP trades: 0.99% on the Basic plan, reduced to 0.59% on the Standard plan (£5.99 p/m, or £4.99 p/m with annual billing) and 0.39% on the Plus plan (£11.99 p/m, or £9.99 p/m with annual billing). The paid plans also add higher interest on uninvested cash and access to a Junior ISA. Note that the SIPP does not offer drawdown, so you would need to transfer to another provider to take an income.
Founded by Adam Dodds, a former KPMG employee, Freetrade raised its early funding through equity crowdfunding. It was acquired by IG Group in April 2025 and continues to operate as a separate brand.
Freetrade’s app is simple to use, which makes it a good starting point for beginners, especially if you mostly buy UK shares and avoid the FX fee.
Saxo
Accounts on offer: Stocks and Shares ISA (flexible) and SIPP.
Fees: These are the main fees on a Saxo ISA or SIPP:
- Custody fee: 0.15% a year on Classic accounts, 0.12% on Platinum and 0.09% on VIP.
- Currency conversion: 0.25%.
- Trading fees: a percentage of the trade value that depends on your tier. UK stocks and ETFs cost 0.08% (minimum £3) on a Classic account, 0.05% on Platinum (from £200,000) and 0.03% on VIP (from £1 million).
- Entry and exit fees: none.
Saxo is a Danish investment bank with around 1.7 million clients, majority-owned by the Swiss group J. Safra Sarasin since 2026. Its SaxoTrader platform (which replaced SaxoTraderGO and SaxoTraderPRO in November 2025) is one of the most complete on the market. However, because its percentage-based fees are uncapped, Saxo is one of the more expensive ISA and SIPP providers for smaller portfolios.
Fidelity
Accounts on offer: Stocks and Shares ISA, Junior ISA and SIPP (including a Junior SIPP).
Fees: The service fee is 0.35% up to £250,000, 0.20% from £250,000 to £1 million and nothing above £1 million. Accounts under £25,000 pay a flat £90 a year instead, unless you have a regular savings plan.
The fee on exchange-traded investments (shares, ETFs and investment trusts) in an ISA or SIPP is capped at £90 a year (£7.50 a month). There are no service fees on Junior ISAs, and fund dealing is free.
Share dealing is charged per transaction:
- Regular savings and dividend reinvestment: £1.50 per deal.
- Online deals: £7.50 per deal.
- FX fee: 0.75% up to £10,000, 0.50% up to £20,000 and 0.25% above that.
With Fidelity, you can manage your investments, get paid advice and plan your retirement in one place.
Fidelity is a good fit for fund investors, as fund dealing is free. Note that international shares are not available in the SIPP.
Vanguard
Accounts on offer: Stocks and Shares ISA, Junior ISA and SIPP.
Fees: The following is a list of fees you will encounter when you use Vanguard as your ISA or SIPP provider.
- Account fee: 0.15% a year, capped at £375. A minimum fee of £4 a month applies to self-managed accounts, which makes Vanguard proportionally more expensive for portfolios under £32,000 (Junior ISAs are exempt from the minimum).
- Fund costs: each fund’s ongoing charge, which varies by fund.
- Transaction costs: charged inside each fund and varying by fund.
Vanguard is one of the largest providers of funds and ETFs in the world. On its UK platform, you can only invest in Vanguard’s own funds and ETFs.
If you want to keep things simple with index funds tracking markets such as the S&P 500 or the FTSE 100, Vanguard is a good fit.
Interactive Investor
Accounts on offer: Stocks and Shares ISA, Junior ISA and SIPP.
Fees: Interactive Investor moved to a new flat-fee structure on 1 February 2026, with three plans that each include an ISA, a SIPP and a Trading Account:
- Core: £5.99 a month, for portfolios up to £100,000.
- Plus: £14.99 a month, with no portfolio limit, one free trade a month, free Junior ISAs and £1.49 fund dealing.
- Premium: £39.99 a month, with two free trades a month, free fund dealing and £2.99 share dealing.
On the Core and Plus plans, online trading costs:
- UK and US shares: £3.99.
- Other international shares: £9.99.
- FX fee: 0.75% (on Plus, 0.25% above £50,000, and 0.25% on Premium).
Because the fee is flat, Interactive Investor gets cheaper in percentage terms as your portfolio grows. It is poor value for small portfolios but one of the cheapest options for large fund portfolios, and the single fee covers both your ISA and your SIPP.
AJ Bell
Accounts on offer: Stocks and Shares ISA, Lifetime ISA, Junior ISA and SIPP.
Fees: a 0.25% annual custody charge on funds (up to £250,000, lower above). For shares, ETFs, investment trusts, gilts and bonds, the charge is capped at £3.50 a month in the ISA and £10 a month in the SIPP.
Dealing costs £5 for shares and £1.50 for funds, while regular investing (scheduled monthly buys from £25) is free.
FX charges also apply at 0.75% on the first £10k, 0.50% on the next £10k, and 0.25% for values over £20k.
AJ Bell pays tiered, variable interest on uninvested cash, so check its website for the current rates.
With more than half a million customers, AJ Bell is a UK company with a straightforward approach to investing. It also runs Dodl, a simpler app for beginners.
Government levies
On top of each provider’s fees, you may also pay government taxes and regulatory levies on some trades.
- Stamp duty: 0.5% when you buy most UK shares, even inside an ISA or SIPP. ETFs and shares listed on AIM (the Alternative Investment Market) are exempt.
- PTM levy: a small Panel on Takeovers and Mergers levy applies when you buy or sell UK shares worth more than £10,000.
- US regulatory fees: when you sell US shares, an SEC fee of $20.60 per million dollars of sale value (0.00206%, since 4 April 2026) applies, plus a small FINRA (Financial Industry Regulatory Authority) trading activity fee per share sold. Both rates are reviewed regularly.
Is your money protected in an ISA or SIPP?
If the provider goes bust, you are protected under the Financial Services Compensation Scheme (FSCS). For investments held with an authorised investment firm (such as a stocks and shares ISA or a SIPP), the protection is up to £85,000 per person, per institution. For cash deposits (such as a Cash ISA held with a bank or building society), the limit rose to £120,000 per person, per institution on 1 December 2025.
The FSCS does not protect you against investment losses, only against the provider failing. If you have a large portfolio, you can split it between providers so more of it is covered. Note that P2P loans in an Innovative Finance ISA are not covered.
Are you a US citizen living in the UK?
If you are a US citizen or green card holder in the UK, you stay taxable in the US, and the UK wrappers work differently for you:
- ISAs: the US does not recognise ISAs, so the income and gains are taxable on your US return. UK funds and ETFs can also be treated as PFICs (Passive Foreign Investment Companies), which carry punitive US tax treatment.
- Pensions: under the US-UK tax treaty, growth in a UK pension such as a SIPP is generally not taxed in the US until you withdraw it.
- Providers: several UK platforms do not accept US citizens or limit what they can hold. For example, Trading 212 does not accept US citizens or US tax residents, and IBKR does not accept US persons trading through a SIPP.
Cross-border tax rules are complex, so speak to an adviser who knows both systems before you open an account.
FAQs
Is there a 401(k) equivalent in the UK?
The closest equivalent is a workplace pension: you and your employer contribute, you get tax relief on your contributions and you are taxed on withdrawals (apart from the 25% tax-free part). A SIPP works in a similar way but lets you choose your own investments, while a Stocks and Shares ISA is the closest match to a Roth IRA.
Should I use an ISA or a SIPP?
Many people use both. A SIPP gives you tax relief upfront, which is especially valuable for higher-rate taxpayers, but you cannot access the money until 55 (57 from April 2028). An ISA has no upfront tax relief, but you can withdraw at any time without paying tax, which makes it more flexible for goals before retirement.
Can I have an ISA and a SIPP at the same time?
Yes. The ISA allowance (£20,000) and the pension annual allowance (£60,000) are separate, so you can pay into both in the same tax year.
Can I transfer my 401(k) to a UK pension or ISA?
In most cases, no. US rules generally only allow rollovers into other US retirement plans or IRAs, so people who move to the UK usually leave the money in the 401(k) or roll it into an IRA. Get cross-border tax advice before moving any money.
What happens to my SIPP when I die?
Before 6 April 2027, unused pension funds generally sit outside your estate for inheritance tax. From 6 April 2027, they will count towards your estate, and your beneficiaries may also pay income tax on what they inherit if you die after 75.
Final thoughts
There is no 401(k) in the UK, but between your workplace pension, a SIPP and a Stocks and Shares ISA, you can get the same mix of tax relief, tax-free growth and control over your investments. Fees vary a lot between providers, so it pays to compare them.
As a rule of thumb, app-based brokers such as Trading 212 and Freetrade are cheapest for small ETF and share portfolios, flat-fee platforms such as Interactive Investor get cheaper as your portfolio grows, and IBKR suits experienced investors who want access to global markets. Start by deciding what you want to hold, from a single global ETF each month to shares from around the world, and pick the provider whose fees fit that.
