By: Matt Koppenheffer | Updated: 29th March, 2019.
Hargreaves Lansdown Stocks and Shares ISA
Good for: Tax-free investing in funds and shares
On Hargreaves Lansdown Stocks and Shares ISA’s secure website.
Our Bottom Line
Hargreaves Lansdown is the UK’s market leading share dealing broker, providing easy access to an extensive range of funds, ETFS, UK and overseas shares. HL offers a robust service with an easy-to-use website and plenty of free information to help make your investment decisions. For investors looking to maximize tax efficiency on an easy-to-use platform, Hargreaves could be a great choice.
Share dealing fee:
Monthly account fee*:
The value of your investments can go down as well as up and you may not get back all the money you put in. All investments carry a varying degree of risk and it’s important you understand the nature of these risks. Remember that taxes can be complicated and the tax benefits of this product depends on your personal circumstances. Tax rules are subject to change.
*Account fees based on assumed account holdings for comparability. Your individual charges may differ.
For those familiar with the Hargreaves Lansdown online share dealing platform, the good news is that with the stocks and shares ISA, you get to use the same great service. For those less familiar with the HL platform, you can visit our full review of the Hargreaves share dealing account.
What you want to focus on, then, is what’s different with the stocks and shares ISA versus the standard share dealing account.
Investing in stocks and shares… tax free
For starters, the big difference is the tax advantage that you get with an ISA. As of this writing, the yearly ISA allowance is £20,000. Once you put this £20,000 into the “tax free wrapper” that is an ISA, you should no longer have to worry about taxes on those investments. That means capital gains from share-price increases and dividends… you get to keep every last penny.
That said, it’s important to point out that the tax benefits and advisability of an ISA depend on personal circumstances. So if you have questions about the tax applicability for your situation, it could be a good idea to talk with your tax professional.
The Hargreaves Lansdown stocks and shares ISA fees
Beyond the likely tax benefits of the ISA account, the other main difference in the Hargreaves stocks and shares ISA account comes in the fee department.
For the most part, the fees remain the same as with a standard share dealing account. For share dealing, you’ll pay a maximum of £11.95 per deal online, unless you trade more than nine times in the previous month, in which it case it falls to £8.95 (and it falls still further if you trade more than 19 times in the previous month). Also similar to the standard share dealing account, you’ll pay 0.45% annually on the value of the fund investments that you have in your account up to £250,000 (on amounts above that, you pay a lower percentage).
What’s different on the fee front is the platform charge on share investments. Here, you’ll pay a similar 0.45% per year on the value of your share investments, up to a maximum of £45 per year. So if you have, for example, £5,000 in shares in your stocks and shares ISA, you’ll pay £22.50 per year. If you have £10,000, you’ll pay £45. And if you have £20,000, you’ll pay that same £45.
There are other fees that may apply to you — automatic investments, telephone-placed trades, paper statements, etc. I’ve generally found HL to be transparent about its fees, so it’s easy to find the costs for these on Hargreaves’ website.
To ISA or not to ISA?
As noted above, the tax advantages of an ISA can vary based on your personal circumstances. For many people though, the tax benefit of an ISA can make a lot of sense. And when you combine the long-term potential of investing in shares with those tax advantages, the advantages can multiply.
For investors that opt for a stocks and shares ISA, Hargreaves can be a great match for those looking for an easy-to-use and robust platform with a transparent fee structure, all backed by a financially strong company.
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