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 401K, Roth 401K, and Roth IRA quite regularly, especially if you follow US content creators. These are specialised retirement accounts for US citizens and are completely irrelevant to you if you are based in the UK.
The major appeal of these accounts is not only the tax benefits they bring but they also allow you to have full autonomy over the investments you choose, unlike many pension-related products where the individual has minimal input besides telling the pension provider what their risk tolerance is.
In the UK, there is also a range of solutions that will give you the equivalent benefits that you can get from a 401k, such as Individual Savings Accounts (ISAs) and Self-Invested Personal Pensions (SIPPs).
In this blog post, we will explain the differences between each account type and tell you about some of the best providers of online SIPPs and ISAs in the UK.
Key differences between a 401k 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 401K, Roth 401k, 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.
Firstly, here is a comparison of the key characteristics of a Roth IRA, Roth 401K, and Traditional 401K (2026 limits, as set by the IRS):
| Differences | United States | ||
| Roth IRA | Roth 401K | Traditional 401K | |
| Tax on Contributions | Roth IRA contributions are made with after-tax dollars | Roth 401K contributions are made with after-tax dollars | Typically made on a pre-tax basis |
| Contribution Limits | $7,500 per year; if you are 50 or over, this increases to $8,600 | $24,500; if you are 50 or over, this increases to $32,500 | $24,500; if you are 50 or over, this increases to $32,500 |
| Tax-Free Growth? | Tax-free | Tax-free | Tax-deferred: growth is only taxed when you withdraw |
| When can you withdraw? | Contributions can be withdrawn at any time; earnings are tax-free once the account has been open for at least 5 years and you are 59 ½ or older | You can start drawing down your pension at 59 ½ or older (a 5-year rule also applies) | You can start drawing down your pension at 59 ½ or older |
| Tax on withdrawals | No taxes or penalties on qualified withdrawals | Not taxable (qualified withdrawals) | Ordinary income tax rates and state taxes |
| Can your Employer Contribute? | No, IRAs are individual accounts; employers can only contribute through workplace arrangements such as SEP or SIMPLE IRAs | Yes; employer matches made as Roth contributions are taxable when they are made | Yes, employer contributions to a traditional 401K are generally not taxed when they are made |
| Can you manage your own self-directed pension? | Yes | Yes, but limited to the investment menu offered by your employer’s plan | Yes, but limited to the investment menu offered by your employer’s plan |
Now that we know how 401Ks and Roth IRAs work, here is how the equivalent accounts in the UK work:
| Differences | United Kingdom | |
| ISAs | SIPP | |
| Tax on Contributions | Contributions are made from income post taxation | Depending on your income, you could receive tax relief up to 45% on contributions made to your SIPP |
| Contribution Limits | Overall allowance of £20,000 per year, which you can split across Cash, Stocks and Shares and Innovative Finance ISAs; Lifetime ISA £4,000 per year (within the £20,000); Junior ISA £9,000 per year (separate allowance). From 6 April 2027, Cash ISA contributions will be capped at £12,000 per year for under-65s | Up to 100% of your annual income to your SIPP each tax year, but this is capped annually at £60,000 |
| Tax-Free Growth? | No capital gains tax or income tax on dividends/interest | No capital gains tax or income tax on dividends/interest |
| When can you withdraw? | Funds can be released at any time (Lifetime ISA withdrawals before age 60 for anything other than a first home incur a 25% charge) | You need to be at least 55 (rising to 57 from April 2028) |
| Tax on withdrawals | Withdraw anytime with no tax impact | Once you reach the minimum pension age, you can usually withdraw 25% of your SIPP tax-free (capped at £268,275); all subsequent withdrawals are subject to income taxation |
| Can your Employer Contribute? | Yes, but you or your employer will not receive any tax relief on this contribution | Yes |
| Can you manage your own investments? | Yes | Yes |
An explanation of each type of ISA
There are a couple of different variants of Individual Savings Accounts (ISAs), 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: Savings account for short-term and/or emergency needs.
- Stocks & Shares ISA: An investment account used to buy stocks, ETFs, bonds, etc.
- Innovative finance ISA: Available only since 2016, this account is designed for peer-to-peer (P2P) lending investments, a form of investing where you directly lend money to businesses.
- Lifetime ISA: With this alternative, your incentive is to save for a first home or retirement. You may invest in cash and/or securities. The government offers a 25% bonus on deposits. It is the most restricted type of ISA.
- Junior ISA: this is a savings account that will allow you to plan for children’s future needs, such as education. You can contribute up to £9,000 per annum to this ISA, which will not reduce your contribution limits to your own personal ISAs.
Keep reading if you are interested in learning where you can find an online provider offering 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 method of saving for retirement like any other pension, the only difference being you can have full autonomy over what investments you want to be part of your pension if you so choose.
Like a regular pension, any contributions you make to the SIPP will be eligible for tax relief of anywhere between 20-45% depending on your income. You can contribute up to 100% of your annual income to your SIPP each tax year, but this is capped annually at £60,000.
Shortly, we will take you through a couple of providers that are currently offering SIPPs to their customers.
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 | ✔ | ✘ | ✘ | ✘ | ✔ | ✔ |
| AJBell | ✔ | ✘ | ✔ | ✘ | ✔ | ✔ |
Interactive Brokers (IBKR)
Accounts on offer: Stocks and shares ISA, Junior ISA, and SIPPs.
Fees: Compared to their general investing account, the fee structure for ISAs and SIPPs is very straightforward.
The fees on IBKR’s ISAs and SIPPs are as follows: £3 per trade for UK and Western European stocks, with no added spreads or platform fees. For larger trades (those over £6,000), the cost is 0.05% of trade value. Pricing on US stocks starts at just USD 0.005 per share. Note that a minimum monthly activity fee of £3 applies to the ISA, which is covered as soon as you generate £3 in commissions in the month.
Interactive Brokers is available worldwide and has one of the most comprehensive platforms in terms of choice and tools (such as Trader Workstation) that you can use for your investing. IBKR may be more suited to seasoned investors with some prior experience, as it can be a little daunting for beginners.
Trading 212
Accounts on offer: Stocks and shares ISA, Cash ISA and SIPP
Fees: Trading 212 is a low-cost brokerage. Its stocks and shares ISA has no platform fee and no commissions. A 0.15% FX fee applies when converting funds; other fees may apply. The Cash ISA is a flexible savings account with no fees and a variable interest rate that tracks the Bank of England base rate (check Trading 212’s website for the current rate). In 2025, Trading 212 also launched a SIPP with no platform fee.
Trading 212 has one of the best online general investing platforms in the UK with its user-friendly mobile app and web design. Many added features make Trading 212 a good choice, such as AutoInvest and Pies, which can simplify your investing life by making diversification and automation simple. Pies & AutoInvest is an execution-only service, not investment advice or portfolio management, and you are responsible for all investment and rebalancing decisions.
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: 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 more than 3,000 stocks and more than 700 ETFs with 0% commission up to a monthly trading volume equivalent to 100,000 EUR (after that, 0.2% with a minimum of 10 GBP). A 0.5% currency conversion fee may apply.
- Earn interest on GBP uninvested cash (4% AER variable at the time of writing, calculated daily and paid out monthly).
- Earn interest or returns without paying tax on them. Withdraw the money and replace it within the same tax year without affecting your annual allowance.
Hargreaves Lansdown
Accounts on offer: Stocks and shares ISA, Cash ISA, Lifetime ISA, Junior ISA, and SIPPs.
Fees: There are two different types of fees you will face if you use one of Hargreaves Lansdown’s ISA accounts; annual account charges and dealing charges. Hargreaves Lansdown overhauled its pricing on 1 March 2026.
The annual charges will depend on whether you hold funds or shares. For shares, ETFs, investment trusts and bonds, there is an annual charge of 0.35%, capped at £12.50 per month (£150 per year) in the Stocks and Shares ISA, the SIPP and the Fund and Share Account.
For funds, there is a 0.35% annual charge on the first £250k; this then decreases to 0.25% on amounts in excess of £250k up to £1m, 0.10% on amounts in excess of £1m up to £2m and no charge above £2m.
You can also be charged dealing fees on your account. Buying and selling funds online now costs £1.95 per trade, although it remains free via monthly regular investing.
| Number of share deals in the previous month | Charge per deal |
| 0-19 | £6.95 |
| 20+ | £3.95 |
Hargreaves Lansdown has the same fee structure for their SIPPs, where you will also pay annual account charges and dealing fees, with the same £150 annual cap on charges for holding shares.
Although the Hargreaves Lansdown fees are still on the higher side, they do offer a full suite of services, including expert financial advice, compared to many other brokers who are just execution only and will not help you in any advisory capacity, which could be a selling point for many potential clients.
Freetrade
Accounts on offer: Stocks and shares ISA, Junior ISA and SIPPs.
Fees: Since January 2026, both 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 benefits such as higher interest on uninvested cash, access to a Junior ISA and priority customer service.
Founded by Adam Dodds, who was a former KPMG employee, Freetrade had relatively humble beginnings, they raised their initial funding through an equity crowdfunding scheme and because of this, they had thousands of retail shareholders. Freetrade was acquired by IG Group in April 2025 and continues to operate as a standalone brand.
Even if you are not interested in opening an ISA or SIPP, Freetrade’s no-fee Basic plan is very easy to use for a beginner.
Saxo
Accounts on offer: Stocks and shares ISA (flexible) and SIPPs.
Fees: There are a number of different fees to be aware of when you use Saxo as your provider for either a stocks and shares ISA or a SIPP.
- Custody fees: A fee of 0.12% p.a. (Classic/Platinum accounts) or 0.08% (VIP accounts).
- Currency conversion fees: 0.25%.
- Trading fees: a percentage of trade value depending on your account tier. For example, the cost per trade for stocks and ETFs is 0.08% for a Classic account, 0.05% for a Platinum account (balances above £200,000) and 0.03% for a VIP account (balances above £1 million).
- Entry and exit fees: none.
Saxo is a leading Danish investment bank with over 1 million clients, providing a wide range of financial services worldwide. With its innovative trading platforms, such as SaxoTraderGO and SaxoTraderPRO, you can trade like someone on Wall Street. But Saxo would still be one of the more expensive brokers on the market offering ISAs and SIPPs for smaller portfolios if cost is your primary concern, since its percentage-based fees are uncapped.
Fidelity
Accounts on offer: Stocks and shares ISA, Junior ISAs, and SIPPs (inc Junior SIPP)
Fees: The service fee is 0.35% for investments with a value of £250k or less, and 0.20% if the value of your investments is in excess of £250k.
The portion of the fee you pay on exchange-traded investments (shares, exchange-traded funds (ETFs), etc.) within an ISA or SIPP is capped at £90 (£7.50 a month). Some funds may also have a performance fee and buy/sell charge. There are no service fees for Junior ISAs.
There are additional charges for each buy/sell transaction you place (including switches and dividend reinvestments).
- £1.50 for deals as part of a regular savings or withdrawal plan or for reinvestment of income or a dividend.
- Simple charge of £7.50 for each deal placed online.
Fidelity offers a wide variety of services; with Fidelity, you can manage your general investments, get wealth management advice, and plan for your retirement all in one place.
Another thing we really like about Fidelity is how they seamlessly embed expert advice and research tools into their offering. But please note Fidelity’s advice service is targeted at people with a minimum of £100k to invest.
Vanguard
Accounts on offer: Stocks and shares ISA, Junior ISAs, and SIPPs.
Fees: The following is a list of fees you will encounter when you use Vanguard as your ISA or SIPP provider.
- Account fee of 0.15% per year, capped at £375. A minimum fee of £4 per month applies to self-managed accounts, which makes Vanguard proportionally more expensive for portfolios under £32,000 (Junior ISAs are exempt from the minimum).
- Ongoing fund management costs of around 0.20% for ready-made portfolios (such as LifeStrategy) and roughly 0.06%-0.78% for individual funds.
- Fund transaction costs, which vary by fund.
Vanguard is a household name for investors around the world; you’ve probably invested in one of their funds before, as they are one of the largest providers of mutual funds and ETFs worldwide. Note that on Vanguard’s UK platform you can only invest in Vanguard’s own funds and ETFs.
You can keep things very simple with Vanguard; if you are the type of investor who likes to put their money into a fund that tracks indexes such as the S&P 500 or FTSE 100, then Vanguard will have the perfect solution for you.
Interactive Investor
Accounts on offer: Stocks and shares ISA, Junior ISAs, and SIPPs.
Fees: Interactive Investor moved to a new flat-fee structure on 1 February 2026, with three plans that all include an ISA, a SIPP and a Trading Account: the Core plan, which costs £5.99 per month (for combined portfolios up to £100k); the Plus plan, which costs £14.99 per month (no investment limit, one free trade per month, free Junior ISAs and cheaper fund and international dealing); and the Premium plan, which costs £39.99 per month and is aimed at frequent traders (two free trades per month, free fund dealing and discounted share trading rates).
Besides the monthly fees, Interactive Investor’s online trading fees on the Core plan are as follows:
- UK Shares & Funds, US Shares £3.99
- Other International Shares £9.99
- FX fee of 0.75%
Interactive Investor has a strong focus on the UK market and a large share of UK retail share trading is executed on its platform. Another stamp of approval is that a large portion of Interactive Investor’s customers have been with them for 10 years or more. You can only achieve stats like that if you run a tight ship and Interactive Investor has a great customer satisfaction rate.
AJBell
Accounts on offer: Stocks and shares ISA, Lifetime ISA, Junior ISAs, and SIPPs.
Fees: 0.25% annual custody charge (capped at £3.50 per month for investment trusts, ETFs, gilts, and bonds).
There are additional trading fees of £1.50 for funds/dividend reinvestments and £5.00 for shares. 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.
If you have any cash sitting in your account, AJBell pays tiered interest depending on the balance; the rates are variable, so check AJBell’s website for the current figures.
With more than half a million customers, AJBell is a homegrown UK company that takes a no-nonsense approach to its investment services. They even have a separate platform called Dodl, suitable for beginners who may find the whole world of investing intimidating.
Government levies
On top of the fees we have already discussed for each of the providers in this blog post, you may also have to pay additional government taxes and levies on certain transactions.
- UK stamp duty of 0.5% will be applied when you buy UK shares.
- A PTM (Panel on Takeovers and Mergers) levy of £1.50 is applied when buying or selling UK shares where the value of the shares is worth more than £10k.
- SEC fees are applied by the US government when selling US shares at a rate of $20.60 per million dollars of sale value (0.00206%), alongside a FINRA trading activity fee of $0.000166 per share sold. Both rates are reviewed regularly by the US regulators.
Is your money safe when you invest it in an ISA?
If the provider goes bankrupt, 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.
For those with large amounts of capital to invest, it may be wise to split this investment out between a couple of providers so you can ensure all of it is covered by the FSCS.
Final thoughts
It can be quite overwhelming when choosing which provider to use when setting up an ISA or a SIPP. The fees and quality of service can vary greatly from provider to provider. One thing you can be guaranteed is that setting up an ISA or SIPP can greatly help you grow your wealth tax-efficiently.
One way to whittle down the list of providers is to assess exactly what type of investments you want to be included in your ISA or SIPP. Do you want a wide variety of stocks from all over the world, or would you be happy to allocate an amount to a single ETF each month? This should help guide you in the right direction.
