During my time as a personal financial advisor, one of the questions I was often asked was if a client should overpay on their mortgage.

Doing so will reduce how long it takes to repay what you have borrowed. It will also cut the amount of interest you pay. You could save thousands, and become financially independent, faster.

The decision would seem like a no-brainer, but it’s not always clear cut. There are circumstances in which overpaying your mortgage could be a big mistake that could cost you dearly instead of accelerating you toward your financial goals.

What Is Mortgage Overpayment?

Mortgage overpayment is simply paying more than the amount required by the terms of your mortgage. You can do this by making extra payments each month, or by irregular payments – for example, when you get a bonus at work.

When you pay more than is required into your mortgage account, your overpayment comes off the amount of capital you owe. In turn, this reduces the amount of interest you pay (because interest is calculated on the outstanding debt).

You’ll shorten the time it takes to pay off your mortgage, and therefore also reduce the amount of interest you pay.

There are other financial consequences that may not be quite so obvious.

First, because you are reducing the capital you owe on your mortgage, the equity you have builds up faster. Should you find yourself needing to remortgage in the future, the extra equity you have in your home should make it easier to do so.

Second, this higher home equity could make it easier to find cheaper mortgage deals – thus saving you even more money. This is because the loan to value (LTV) is smaller, and the smaller the LTV, the lower the interest rate you are likely to be charged.

Another hidden benefit is that, by paying off your mortgage earlier, you’ll have more money to do other things with after your mortgage has been repaid. I’ll run through how this could benefit you later in this article.

How Much Could You Save By Overpaying Your Mortgage?

The amount you could save depends on several factors:

• The amount of your mortgage
• Your mortgage interest rate
• How much you are overpaying by
• How long you overpay for
• The frequency of your overpayments

Let’s say you have a £200,000 repayment mortgage, with an interest rate of 5% and a repayment term of 25 years. Overpaying by £50, £100, and £200 each month would have the following effect:

Pretty impressive, eh? It gets even better.

The Real Benefit Of Repaying Your Mortgage Early

By overpaying your mortgage, you will become financially independent faster. What does this really mean?

Using our example above, if you overpay by £200 per month, you’ll reduce your original mortgage term of 25 years by six years and two months. That’s six whole years and two months where you can start keeping your money for yourself.

Now, let’s suppose that you redirect what you would have been paying on your mortgage into a SIPP (there will be contribution rules to follow, but this is for illustrative purposes only).

You’ll pay a net amount of £1,369.18 per month into a SIPP for that six years and two months (74 months), and benefit from tax relief on your contributions. If you pay tax at 20%, tax relief will gross up your pension contribution to £1,711.47 per month.

Over the 74 months, you would contribute a total of £126,649.17 into your pension. Compare that to the average UK pension pot – it’s more than most people have saved in a pension during their whole working life!

Add in investment growth, and the figures could be even better (depending upon fund performance).

Excited about making overpayments to your mortgage? You should be. But before you rush to make them, there are some considerations to make first.

Are Mortgage Overpayments Right For You?

Before you start making overpayments on your mortgage, you’ll need to make sure you can afford to do so – sensible budget planning is crucial, and financial stability is critical. You mustn’t jeopardise your overarching financial goals or your current financial wellbeing.

Here are three questions to answer:

1. Are You Maintaining An Effective Emergency Fund?

An emergency fund is your safety net in case of unforeseen circumstances. It’s the cushion that prevents you falling into financial crisis.

With a properly funded and maintained emergency fund, you are much less likely to need to borrow money on expensive credit terms to get over what would otherwise be a financial inconvenience, not a catastrophe.

2. Should You Repay Other Debts First?

I class a mortgage as a good debt. It’s among the cheapest forms of borrowing, puts a roof over your head, and (hopefully) the money you borrow is invested in an appreciating asset.

If you have bad debts that charge high interest rates – credit cards, for example – it could be more beneficial to pay these off first, because you’ll be saving more in interest payments.

3. Will You Incur Penalties On Overpayments?

Before making overpayments, make sure you read the terms of your mortgage. Some mortgages won’t allow you to make an overpayment, or will limit how much you can overpay.

Break these terms (if they exist) and you could face hefty penalty charges that might outweigh any benefits of overpaying.

Final Thoughts

Before you decide to overpay on your mortgage, you should carefully consider your personal situation and financial wellbeing. The potential benefits are extremely tempting, but you should first ensure your financial stability – that you have an effective emergency fund saved, have repaid expensive debts, and that you can afford to make overpayments.

You should also consider if your money might work harder for you by investing it. You’ll need to consider the pros and cons of saving rather than paying off your mortgage, such as potential investment returns in place of guaranteed interest savings when overpaying on your mortgage.

When you understand all the implications, pros and cons of overpaying on your mortgage, and have weighed doing so against the alternatives, you’ll make the right decision – a decision that will help you stride toward financial freedom.

Moneyfarm and Nutmeg are two of the UK’s most popular investment platforms for both novice investors.

Both are designed for the modern digital era, operating on a ‘set-and-forget’ investment model. After setting up your account and direct debits, these platforms take over the management of your investments.

They are accessible via both mobile apps (iOS and Android) and web-based platforms, providing convenience and flexibility.

The question is, do they deserve their popularity? If they do, which is best for you?

You’ll find the answers in this comprehensive comparison, in which I look at everything from products and services to asset choice, funds, and fees.

How Do They Work?

Moneyfarm and Nutmeg are what we call ‘robo-advisors’. They use technology to simplify the investment process, offering professional portfolio management and other services at highly competitive fees.

Moneyfarm

Moneyfarm launched in the UK in 2016, and is backed by several major investors, including Allianz Global Investors and M&G. It has more than 125,000 active investors in Europe and manages over £3.5 billion in assets.

Its process focuses on understanding your investment goals and risk tolerance through a detailed questionnaire. The information you provide is then used to match you to a portfolio that works well with your investor profile.

Its portfolios are managed by an in-house team of investment experts who analyse markets and portfolio performance, continually adjusting holdings accordingly to pivot from your goals and risk level.

In addition to this, Moneyfarm also offers the guidance of investment consultants who can provide personalised advice if you need extra help.

Nutmeg

Founded in 2011, Nutmeg builds and manages diversified portfolios tailored to investors’ needs.

You don’t need to choose investments yourself; Nutmeg handles everything for you. It manages around £5 billion in assets for more than 230,000 investors.

Once registered, you can set up a portfolio in less than 10 minutes. Nutmeg uses mostly ETFs (Exchange Traded Funds) to construct 20 different portfolios that range in risk level and offer ethical investment opportunities, too.

You can also receive advice from Nutmeg’s team, though this is restricted to their own products.

Product & Service Offerings

You’ll have a range of investment options available with both Moneyfarm and Nutmeg: General Investment Accounts (GIAs), tax-efficient ISAs and Junior ISAs, and SIPPs for retirement planning.

In addition, Nutmeg also offers a Lifetime ISA (LISA), which is designed for those saving a deposit for their first home or for retirement.

Nutmeg also offers a personal financial advice service, provided by its team. This service is free, though you’ll only receive general advice about its products. For more personalised financial guidance you could use Nutmeg’s personal financial planning service, which costs £575.

Like Nutmeg, Moneyfarm offers a free financial guidance service. While this is aimed at helping you make more informed investment decisions, it does not provide the depth of advice provided by Nutmeg’s paid-for financial planning service.

Portfolios, Funds, & Other Assets

Moneyfarm and Nutmeg construct their portfolios using cost-efficient ETFs, meaning their fund charges are among the lowest in the market (more about this in a moment).

Moneyfarm offers a range of portfolio types: fixed allocation, actively managed, and liquidity+. Its fixed allocation portfolios are lower cost and follow the market.

The actively managed portfolios are constantly monitored by a professional investment team with the goal of outperforming markets. Liquidity+ portfolios are ideal for shorter time horizons of less than two years.

The questionnaire you complete when you register for an account helps the tech to select which type of portfolio is best for you, as well as determining which of seven risk levels is most appropriate. You can also choose to invest in ethical funds or other thematic options.

If you want a more hands-on investment experience, you can also select your own investments and buy shares into an ISA or GIA through the Moneyfarm platform.

Nutmeg’s approach is similar, but with a few key differences.

Rather than seven risk levels, its portfolio range covers up to 10 risk profiles. These are based on five investment styles with ETFs used for diversification across shares, bonds, industrial sectors, and geographies.

Unlike Moneyfarm, with Nutmeg you must select your risk level and investment style yourself, with technology then managing your investments.

Its fixed allocation portfolios are managed by technology, while an investment team monitors its fully managed and socially responsible portfolios daily. It also offers Smart Alpha portfolios that are managed by JP Morgan.

Like Moneyfarm, Nutmeg offers thematic investing, though this is only available at risk levels 5 to 10.

Their Apps

Moneyfarm’s investment app is designed to make investing accessible, convenient, and user-friendly, for both novice and experienced investors.

The app allows you to track your investments in real time, providing a detailed breakdown of your portfolio’s allocation by asset class and giving insights about performance and market trends. If you need to adjust your strategy, it’s easy to do so.

Overall, the app is designed with a clean, intuitive interface that makes it easy to navigate through its features and access the information you need.

Nutmeg’s investment app makes it easy for you to manage your investments on the go. You’ll be able to monitor your investment performance, as well as access updates about investment strategies and market news.

It’s an intuitive, user-friendly interface that provides detailed reports on demand.

Both Moneyfarm and Nutmeg provide various tools to help you invest more effectively. These include investment calculators, and advice and guidance via articles, eBooks, and more.

Overall, Nutmeg’s app provides a tad more functionality than the Moneyfarm app. This is reflected in ratings on Apple’s app store – while both score highly, Nutmeg scores 4.8/5 and Moneyfarm scores 4.6/5.

Comparing Fees

Both Moneyfarm and Nutmeg operate a tiered pricing structure, meaning the more you invest the lower the charge. Fees also depend upon your style of investment/portfolio choice.

Moneyfarm Fees

Moneyfarm’s charges reduce the larger your portfolio, with the reduced fee charged on the entire value of your portfolio:

Should you invest in a Liquidity+ portfolio, you’ll be charged a 0.30% Moneyfarm fee and an underlying fund fee of 0.10%, irrespective of the size of your portfolio.

Share dealing is charged at £3.95 per trade.

Nutmeg Fees

Nutmeg’s fee structure is less complex. On all its portfolios except fixed allocation, it charges a Nutmeg fee of 0.75% up to £100k and 0.35% on the portion above this.

The Nutmeg fee on its fixed allocation portfolio is 0.45% up to a value of £100k, and 0.25% on the portion above this. In addition to this fee, you’ll also pay fund costs and a spread as follows:

Comparisons

Let’s compare total Moneyfarm Active Management to Nutmeg Fully Managed, for a portfolio size of £25k, £100k, and £250k:

Which Is Best For Beginners?

If you’re just starting out with investment, platform choice is crucial. I like both Moneyfarm and Nutmeg for beginners, though there are a few key differences.

You’ll find it easy to open an account with both companies, and both use technology to help you on your investment journey.

If you’re happy with a technology-led approach, Nutmeg offers a range of portfolios to cater for you whatever your investment and risk profile. If you want the comfort of personalised guidance, Moneyfarm’s approach of combining technology with access to human consultants may be more reassuring.

The best way to sum up is that both are ideal platforms for beginners – simply distinct types of beginners.

Is Your Money Safe?

Whenever you’re investing, your capital is at risk – investments go down as well as up. But what about your money, your personal data, and your account?

Both Moneyfarm and Nutmeg are regulated by the Financial Conduct Authority (FCA) and covered by the Financial Services Compensation Scheme (FSCS). This means they must both adhere to strict standards like other regulated financial companies in the UK and, if they were to go bankrupt, up to £85,000 of your money/investments that you have with them is protected.

They both use custodian services to keep your funds separate to their own, and employ layered protection such as advanced encryption and secure login processes to protect your personal information and account details.

They’re also backed by some big players – JP Morgan Chase own Nutmeg, and Moneyfarm is supported by significant investors such as Allianz Global Investors and M&G.

In summary, whether you choose Moneyfarm or Nutmeg, you can be confident that both platforms have robust measures in place to protect your money, providing a safe environment for your investments.

How they perform, of course, depends on the ebbs and flows of financial markets.

How To Get Started

It’s an equally effortless process to get started with both Moneyfarm and Nutmeg.

Start by visiting their respective websites or downloading their apps. You’ll then need to fill out an online questionnaire, after which a diversified portfolio will be suggested to you.

Create an account, make your deposit, and select your portfolio to get started.

Weighing Up The Pros & Cons

No investment platform can be perfect for all. Before deciding on which is ideal for you, it’s a good strategy to consider the pros and cons of each platform.

Moneyfarm

Moneyfarm offers several advantages for investors, especially if you’re new to investing. You can receive personalised guidance from its investment experts, as well as benefit from active portfolio management with continuous monitoring of portfolios to ensure investments are optimised to current financial market trends.

On top of this, you can change your portfolio to match your evolving investor profile to make sure that your investments align with changing financial goals. Additionally, you’ll need a low initial investment to get started.

However, Moneyfarm does have some drawbacks. For example, there are fewer portfolio options compered to Nutmeg and, while its fees are competitive, they may be higher than some other robo-advisors.

Nutmeg

Turning to Nutmeg, a range of benefits make it a popular choice. Its diverse portfolio options are a real plus point, letting you select a portfolio that more closely aligns with your investor profile and your values.

It’s fast to set up your portfolio, and offers an extremely simplified investment process. Using low-cost ETFs to construct its portfolios, investment charges are kept low, which maximises your returns.

On the downside, you’ll need a minimum of £500 to get started and, while its automated guidance is excellent, you won’t have access to the same level of personalised human advice that you have at Moneyfarm.

Tips To Get The Most Out Of These Platforms

Whatever your level of investment experience, there are a few ‘rules of engagement’ that will help you get the most out of whichever investment platform you choose.

These tips add up to a range of sensible and sound investment habits, as you develop a strategy that suits you and helps to move you toward your investment goals:

Know Your Risk Tolerance & Goals

Take your time when answering the questionnaires set by Moneyfarm and Nutmeg – and be honest with yourself when doing so! This will ensure that the recommended portfolios align with your long-term investment objectives’ risk profile.

Regularly Review & Adjust Your Portfolio

Over time, your life will change. You might move house, get married, have children, change jobs, receive a pay rise or bonuses, etc.

As your financial situation shifts, it’s crucial to take stock and review your investment strategy so it remains aligned with your evolving investment goals.

Leverage Educational Resources

Don’t ever stop learning! I was employed in the financial markets for around a quarter of a century, and there’s always something new to learn. Use the investment platform’s resources to your full advantage – stay informed about market trends, investment strategies, and how your portfolio is performing.

They say that knowledge is power – when you’re investing, knowledge is profit.

Take Advantage Of Expert Guidance

Moneyfarm provides access to investment consultants, while Nutmeg offers detailed guidance through its platform.

Don’t hesitate to reach out for advice or clarification on your investment strategy – you’ll become more confident in your approach and make better investment decisions.

Monitor Fees & Costs

Both platforms offer low costs, but this doesn’t mean you shouldn’t understand how these affect your investment returns. When you review your portfolio, make sure to also review the cost structure and measure how it might affect your returns going forward.

Stay Diversified

Diversification is key to successful, long-term investing – assets, economies, and industrial sectors rarely move in the same direction.

Maintaining a diverse portfolio in line with your investor profile will help to smooth market shocks, reducing volatility in your investment performance, and making investing less stressful and more successful.

Embrace Pound-Cost Averaging

Invest your money steadily, adding to your portfolio with regular investments. This will help to smooth out volatility in the markets.

Timing the market is not only almost impossible; it’s a pitfall that often leads to poor emotional investment decision-making.

Moneyfarm Vs Nutmeg – The Bottom Line

Both Moneyfarm and Nutmeg are excellent investment platforms. While they both leverage technology to help simplify the investment process as well as optimise your investment strategy to your investor profile, risk tolerance, and investment goals, each platform offers unique advantages, too.

For example, you’ll have access to more personalised investment guidance with Moneyfarm, while Nutmeg stands out for its range of diverse portfolio options and fast set-up.

Both platforms offer robust tools and services to help you achieve your investment objectives. With so little to choose between them, when deciding which is best for you, ensure that you fully consider your individual needs, preferences, and financial goals.

If you’re looking to save for your first home or toward your retirement, one of the investment vehicles that should be on your radar is a Lifetime Individual Savings Account (LISA).

Though the amount you can invest is limited, the tax efficiency of ISAs plus the government bonuses you’ll receive make the LISA an incredibly attractive investment for many.

Can You Invest In A LISA?

To invest in a LISA, you must be between 18 and 39 years of age, and be a UK resident (or what’s called a Crown servant, such as an armed forces member serving abroad). Once opened, you can carry on investing through to your 50^th birthday.

You should also be investing toward buying your first home, or toward your retirement.

If you fit into this eligibility criteria, then read on.

How Much Can You Contribute Into A LISA?

You can contribute up to £20,000 into ISAs in any tax year. Of this, you can invest up to £4,000 into a LISA – leaving you £16,000 to invest in other types of ISA, such as a cash ISA, stocks and shares ISA, or an innovative finance ISA.

What Is The LISA Government Bonus?

Here’s where investing in a LISA becomes immediately profitable, and the reason there’s such a strict limit on contributions.

For every pound you put in, the government gives you a 25% bonus. Contribute the maximum £4,000 in a tax year, and you’ll have another £1,000 deposited into your LISA.

However, this government bonus comes at a cost – with the cost being how you can withdraw money from your LISA.

How Can You Use A LISA?

There are two ways to use a LISA:

1. Buying Your First Home

You can use the funds from your Lifetime ISA, including the bonus, to buy your first home, providing the purchase meets the following criteria:

• The property costs more than £450,000
• You are a first-time buyer and have never owned a home in the UK or abroad
• The property is purchased with a traditional repayment mortgage
• The Lifetime ISA has been open for at least 12 months

2. Saving for Retirement

Though you can only contribute to a LISA and receive government bonuses until you are 50, if you’re using it for retirement you cannot withdraw from it until you are 60.

You can, of course, choose to stay invested and continue to benefit from tax-free income and growth.

Can You Withdraw For Other Reasons?

LISAs don’t have the same flexibility as other types of ISA. Sure, you can withdraw money from a LISA at any time and for any reason, but if it’s not for buying a first home or retiring, you’ll be charged 25% on the amount you withdraw.

Therefore, you may get back less than you initially deposited.

However, there are exceptions to this rule – for example, this charge will not apply if the reason for withdrawal is terminal illness or death.

Cash LISAs Vs Stocks & Shares ISAs

You can invest in two types of LISA:

Cash LISA

A Cash LISA is like a high-yield savings account, except that you’ll earn interest tax-free.

Stocks & Shares LISA

A Stocks and Shares LISA let’s you invest your contributions into investment assets such as government bonds, shares, mutual funds, and ETFs.

This gives your money greater opportunity to grow, but you should remember that the value of investments can go down as well as up. Any income and growth within a LISA is tax free.

You could also opt to have a combination of the two types of LISA.

LISA – FAQs

Six questions that I’m regularly asked when discussing LISAs are:

Does The Government Bonus Count Towards My ISA Allowance?

No, any bonus you earn from a Lifetime ISA does not count towards your annual ISA allowance.

Where Can I Open A Lifetime ISA?

Any bank, investment manager or building society that offers the product.

Can I Hold Multiple Lifetime ISAs?

Yes, you can hold more than one Lifetime ISA. However, you can only contribute to a single Lifetime ISA per tax year.

You can also move your Lifetime ISA to another provider – for example, to get a better interest rate.

How Are Bonus Payments Treated In An Investment Lifetime ISA?

If you have an investment Lifetime ISA, it’s important to check with your provider how they treat bonus payments.

Some providers may automatically reinvest bonus payments, which can take advantage of potential growth and increase the value of your fund. Others might place your bonus into non-interest-earning cash accounts, which means you could miss out on interest or potential growth.

What Happens To My Lifetime ISA If I Die?

If you pass away, all money in your Lifetime ISA will be received by your beneficiaries, including bonuses and interest, without penalty.

However, the funds will lose their ISA tax-free status and will become part of your estate for Inheritance Tax purposes.

How Does A Lifetime ISA Affect My Entitlement To Benefits?

Money kept in a Lifetime ISA is treated like money held in other types of ISAs. The 25% bonus is usually considered when calculating the cash-in value. This means it could affect your entitlement to certain benefits.

For example, funds within a Lifetime ISA are treated as savings and could impact eligibility for means-tested benefits.

LISAs – The Bottom Line

If you’re looking to save toward buying your first home or retirement, a LISA offers the incredible incentive of a government bonus. But you must understand the rules. The potential penalties payable if you withdraw for other reasons can mean you receive less than you put in.

Bear this in mind when you invest, and that 25% bonus on your contributions could be the boost your savings need to get you closer to your first home faster or a more financially healthy retirement.

When considering investment platforms in the UK, two names that you may have come across regularly will be Interactive Investor and InvestEngine. They each offer something unique for individual investors – a range of features and benefits that will appeal to different investment profiles.

Whether you’re a seasoned investor or just starting out, your choice of trading platform can have a significant impact on your user experience and investment outcomes.

Which is why I’ve taken my slide rule to both, to help you figure out which is best for your investment approach and financial goals as I pit Interactive Investor Vs InvestEngine.

How Do Interactive Investor and InvestEngine Work?

In summarising how these two platforms work, you get your first look at the key differences between them.

Interactive Investor

Interactive Investor offers a straightforward approach to investing with a flat fee structure, which is more likely to appeal to you if you have a larger investment portfolio.

More akin to a classic broker, you choose the assets you wish to invest in, and buy and sell these on its trading platform.

Because Interactive Investor charges a flat fee rather than a percentage of the value of the assets, it’s more economical if you own (or are buying and holding) a more substantially sized portfolio.

If you prefer a more hands-off approach to investing, Interactive Investor also offers a range of ready-made portfolios.

These provide instant diversification across various assets and are professionally managed to fit your investor and risk profile.

You’ll have a choice of account types that include a General Investment Account (GIA), Individual Savings Accounts (ISAs), and Self-Invested personal Pensions (SIPPs), – so, whatever your investment goals, you’ll have an investment wrapper designed to help you achieve them.

InvestEngine

InvestEngine will appeal most to you if you like simplicity on a cost-effective platform.

It focuses on ETFs (Exchange Traded Funds), and you have two options for your investment.

First, you can invest in one of its managed portfolios, at a low fee of 0.25% of fund value.

If you prefer a DIY approach, you can create your own portfolio by investing in its range of ETFs.

With this dual approach, the instant diversification that ETFs provide, and its ease of use, this is a great platform for novices and more experienced investors.

As with Interactive Investor, you can invest via a GIA, ISA, or SIPP to enhance your tax efficiency and meet your financial objectives.

Product & Service Offerings

The commitment of both Interactive Investor and InvestEngine to provide their customers with a range of investment options is evident in the types of financial products and services they offer.

Interactive Investor’s Investment Options

Interactive Investor provides a variety of account types designed to meet different financial goals and tax considerations:

General Investment Account (GIA)

This account offers you the flexibility to invest in a wide range of securities with no annual limits on contributions or withdrawals.

Stocks and Shares ISA

You can invest up to £20,000 per year into ISAs. Offering you a way to grow investments within the fund and when you withdraw money from it, without paying tax on gains or income.

Self-Invested Personal Pension (SIPP)

If you are investing for retirement, you’ll also have the option to open a SIPP, with tax relief on your contributions and on the growth and income within your fund.

Lifetime ISA

Available to open for those aged 18 to 39, helping you to save for retirement or a first home with the advantage of a government bonus. You can only invest a maximum of £4,000 into this type of ISA each tax year.

Junior ISA

Enables tax-free saving for children’s future, with an annual contribution limit set by the government (currently £9,000).

Cash Savings Accounts

If you have cash savings, or want to park your cash for a period before investing, Interactive Investor’s Cash Savings Facility provides a way to hold between £10,000 and £250,000, with competitive interest rates for savings plans between six months and three years.

InvestEngine’s Investment Options

Like Interactive Investor, InvestEngine offers:

• A GIA
• Stocks and shares ISAs
• A SIPP

In addition, you can also open an investment account in a business name. If you own a limited company, this allows you to invest spare cash in your business to help you improve your profits in the longer term, while maintaining fast (and free) access to your funds.

Portfolios, Funds & Other Assets

When you invest – whether in a GIA, ISA, or SIPP – you’ll invest in funds, managed portfolios, of other securities inside your chosen investment vehicle.

This is another key point of difference between the two platforms. You’ll have access to a broader range of assets and ready-made solutions with Interactive Investor, while InvestEngine offers only ETF investment (DIY and ready-made solutions).

Interactive Investor

Through Interactive Investor, you’ll have access to a wide and diverse range of investment assets, which is broad enough to satisfy the needs of most investors, catering to individual risk tolerances and financial goals.

The assets you can invest in include:

Model Portfolios

You can choose from several model portfolios, each designed to align with different investment and risk profiles, from low-cost, low-income to active growth.

Whether you’re a conservative or aggressive investor, these portfolios should help you achieve your financial goals in actively or passively managed funds.

Super 60 and Ace 40 Lists

These lists are designed to take the strain out of investment selection. The Super 60 list is a list of 60 hand-picked funds, investment trusts, and ETFs giving quality investment opportunities across different regions and economic sectors.

The Ace 40 is selected from a list of 200 funds, investment trusts, and ETFs selected for their sustainability.

Quick-Start Funds

Ideal for novice investors, the six Quick-Start Funds offer a low-cost entry according to your investment and risk profile, with funds provided by Vanguard and Columbia Threadneedle.

In addition, you’ll also be able to trade in around 12,000 stocks around the world, as well as ETFs and bonds.

InvestEngine

InvestEngine’s investment options are not as broad as those offered by Interactive Investor, but still deliver plenty of choice for investors:

DIY Portfolios

You can create your own portfolio from a range of up to 600 ETFs. These allow you to invest in a diversified manner across a range of economic sectors, asset types, and geographies.

With no management fees and no platform fees, this is a terrific way to build a low-cost, diversified, self-managed investment portfolio.

Managed Portfolios

InvestEngine also offers 10 managed portfolios, with each positioned to cater for a different level of risk from Growth 1 being the lowest and Growth 10 the highest.

To ensure you invest at the right level of risk, you’ll be asked to complete a questionnaire like you would were you to use a robo-advisor.

Their Apps

In a mobile and app-driven world, the quality and usability of a broker’s app is one of the key considerations. Neither Interactive Investor nor InvestEngine disappoint.

Interactive Investor’s App

This is a great app no matter your investment experience. It offers comprehensive functionality that allows you to easily trade in and manage your investment portfolio.

You’ll have access to the latest financial news and research, which is crucial when making investment decisions. You can set up price alerts, too.

Overall, the Interactive Investor app offers a user-friendly experience on a robust platform that makes investing on the go a breeze.

InvestEngine’s App

InvestEngine’s app mirrors its investment offering – clean, simple, and cost-effective. You’ll benefit from a streamlined app that enable you to manage your investments easily.

It includes all the essential tools you need to manage your investments, plus it includes access to automated investing – you select your investment criteria, and the app manages buying and allocation of your ETF selection.

Together with automated rebalancing, your portfolio should never get out of kilter against your investment profile.

Comparing Fees

Another notable difference between Interactive Investor and InvestEngine is the fee and charging structure. Both platforms are low cost when compared to many of their peers.

Interactive Investor offers a range of subscription plans, with dealing charges on top of this. InvestEngine charges annual fees based on the size of your portfolio and the style of investment.

Interactive Investor

Interactive Investor charges a flat fee – a monthly subscription which does not alter as your investment pot increases in value. On top of this fee, you will pay dealing charges.

GIA and ISA Charges

The lowest-cost Investor Essentials Plan is for portfolio values of less than £50,000.

SIPP Charges

Across all buying and selling of investments within your Interactive Investor accounts, you may also incur other unavoidable charges, such as exchange fees and taxes.

If you invest in funds, applicable fund management fees according on the fund will be charged as a cost levied by the fund manager.

InvestEngine

InvestEngine’s charges depend on how you are investing, and it charges as a percentage of your find value – a platform charge. On top of this, there will be annual charges levied by the ETF fund manager, as well as a market spread:

Because of the difference in charging structures, a direct comparison of costs between Interactive Investor and InvestEngine is difficult – it depends on the value of your portfolio, what type of assets you invest in, and how often you deal.

However, Interactive Investor’s fixed fee structure is likely to make it more cost efficient for larger portfolios. For smaller portfolios, and if you only wish to invest in ETFs on a DIY basis, InvestEngine will be less costly.

Minimum Investment

There is no minimum investment to open an account with Interactive Investor, though regular investments must be at least £25 per month.

To open an account with InvestEngine, you’ll need to make a minimum investment of £100. Regular ‘savings plans’ can be started with as little as £20 per month.

Which Is Best For Beginners?

Both Interactive Investor and InvestEngine could be an excellent choice for beginners, as they both offer managed portfolio options. However, there are caveats.

Interactive Investor’s robust app with a comprehensive range of investment options is ideal if you’re a more active trader who wants various vehicles to invest tax efficiently.

You might find the cost structure and complexity of investment choice more daunting if you are a complete novice with a smaller portfolio.

InvestEngine is great for investors who prefer a straightforward approach using only ETFs to construct their portfolio.

Its low-cost approach is ideal if you are just dipping your toes into the investment pond – though if you have a larger, managed portfolio the costs can soon build up, but are still likely to be lower than many competitors.

Is Your Money Safe?

Both Interactive Investor and InvestEngine maintain the highest security and regulatory compliance and features.

Both are regulated by the Financial Conduct Authority (FCA) and your money is protected under the Financial Services Compensation Scheme (FSCS), meaning that if they face financial difficulties (like bankruptcy), up to £85,000 of your assets are protected.

In addition, both platforms include online security measures like two-factor authentication and encryption to protect your personal data and account security.

How To Get Started

Whichever trading platform you use, it’s easy to open an account and get started. Though the processes are slightly different in terms of choosing how you’d like to invest, both prompt you clearly and will require financial details, photo ID, and of course funding to get started.

Weighing Up The Pros & Cons

Costs, apps, asset range, investment products… how do you decipher what could be information overload? Let’s sum up the pros and cons of each platform.

I appreciate the breadth and depth of asset choice offered on Interactive Investor.

With access to thousands of stocks, bonds, funds, and other securities, you can build a portfolio to meet any investment strategy.

The range of account options mean there’s an option for all investment objectives.

You’ll have access to some fantastic market research and educational material, and the award-winning friendly app is easy to navigate.

On the downside, though the flat-fee structure makes a lot of sense for larger portfolios, if you’re starting off small the effect of this cost on your returns will be magnified.

If you’re focused on simplicity and cost-effectiveness, InvestEngine has you covered. It offers a unique no-fees DIY option as well as highly, competitively-priced managed portfolios. Its whole approach makes investing easier, making it especially attractive for beginners.

This said, its limited choice of investment assets and lack of advanced investment tools on its app could be a disadvantage if you’re looking for more diverse investment options and greater control over your investment strategy.

Tips For Investing

Whether you’re a beginner or a more experienced investor, managing your own investments can be a daunting prospect.

Platforms like Interactive Investor and InvestEngine offer you an array of benefits that can help you, but developing sound investment habits is the key that will set your investment performance apart.

You must be strategic, aligning your investment approach with your financial goals. These tips should help you to be confident with all your investments, whichever investment platform you select:

1. Know Your Investment Goals & Risk Tolerance

Accurately assess your financial goals and risk appetite, so that your investments align with your long-term financial objectives.

2. Use Account Features Strategically

Take advantage of the various account types offered by your chosen platform to align with your financial goals – and maximise tax efficiency through ISAs and SIPPs.

3. Benefit From Low Costs

Leverage Interactive Investor’s flat fee structure if you have a large portfolio to minimise costs. Take advantage of InvestEngine’s no-fee DIY portfolios and low-cost managed portfolios to maximise your investment growth.

4. Start With Managed Portfolios

If you’re new to investing, consider starting with managed portfolios on InvestEngine or the Interactive Investor’s Quick-Start Funds.

5. Experiment & Learn

If you’re interested in a more hands-on approach, experiment with developing and managing your own portfolio of investments. You’ll need to do your research, so make good use of all the tools available on each platform as well as independent research routes.

6. Diversify Your Investments

Whether you opt for a managed portfolio or decide to invest on your own, diversification is key. Investing in ETFs on InvestEngine or Interactive Investor is an effective way to start, but remember to diversify across sectors, geographies, and asset types.

7. Regularly Monitor & Adjust Your Portfolio

Regularly review your portfolio’s performance to ensure it stays aligned with your goals. A monthly check-up can prevent any surprises, and help you adjust to changes in your financial life or market conditions.

8. Embrace Pound-Cost Averaging

Investing regularly smooths out market volatility, and helps you avoid the pitfalls of trying to time the market.

Interactive Investor Vs InvestEngine – The Bottom Line

When deciding between Interactive Investor and InvestEngine, your choice will boil down to a few key decisions.

If you want to invest across a range of investment options including individual stocks, bonds, and funds, Interactive Investor’s platform will be the better choice. Its flat fee structure will also appeal if you hold a larger portfolio.

On the other hand, if you desire a simpler way to invest, with extremely low costs and a high degree of diversification, InvestEngine’s focus on ETFs may be more attractive.

Ultimately, it will be crucial to align your platform selection with your investment style, financial objectives, and the investment method with which you feel most comfortable.

Freetrade vs Trading 212 – two of the giants in DIY trading platforms in the UK. With both offering commission-free trading in ETFs and shares, which is best for you?

In this article, I compare the two platforms across a range of factors. From services to accounts, investment products to assets, costs to customer services, you’ll find all you need to know to help you make your trading platform choice.

What Are Freetrade & Trading 212?

Both Freetrade and Trading 212 promote commission-free trading of a range of shares and ETFs.

Trading 212 also makes it possible for trading in some other assets. Freetrade’s customer base is predominantly UK investors, while Trading 212 (which began in Bulgaria) has a more global reach.

Freetrade started as the brainchild of a group of fintech specialists who wanted to bring stock trading to the masses. The platform has been designed to be easy to use – a clean, clear interface that removes complexities usually associated with trading.

It’s a platform that is particularly popular with beginner investors, and now boasts around 1.5 million users.

Trading 212 was first founded in 2006, though it didn’t launch its trading platform until 2013. Having a more global reach and a more diverse range of asset choices, it caters to a broader range of investors – around 15 million worldwide.

What Services Do They Offer?

Both Freetrade and Trading 212 allow you to invest in shares and ETFs. You can also trade in gold, cryptocurrencies, and CFDs (Contracts for Differences) on Trading 212.

They both let you trade in fractional shares – that’s a part share if you don’t have enough money to buy a full share (like the hundreds of dollars it could cost to buy a single share in companies like Apple, Amazon, and Microsoft).

Both platforms have a social aspect – forums on which users can share information, ideas, and winning and losing trades, ask and answer questions, etc. They also provide a range of guides and advice for investors.

What Account Types & Investment Products Are Available?

While the services offered by Freetrade and Trading 212 are not far short of identical, it’s in the types of account and investment product mix that we begin to see some daylight between the two platforms.

Both offer three account types; however, it’s here where the similarity ends.

Freetrade Plans

Freetrade offers three plans: Basic, Standard, and Plus. Each plan includes commission-free trading.

As you move from the Freetrade Basic to Freetrade Plus, access to investment products, assets, and other features improve:

Freetrade Basic Plan

No account fees.

You’ll have access to Freetrade’s General Investment Account (GIA), and be able to trade in around 4,700 stocks and ETFs commission free (though there may be other charges). You’ll also be able to deal in fractional shares in the United States, and receive 1% AER on up to £1,000 of uninvested cash.

There’s an FX charge of 0.99% when converting from one currency to another, and a treasury custody fee of 0.45%.[MB1] 

Freetrade Standard Plan

£5.99 per month (or £59.98 per year).

With access to a stocks and shares ISA as well as a GIA, you can invest to benefit from the tax advantages of an ISA. You’ll have a wider range of shares and ETFs to choose from too (more than 6,000), access to stock analysis tools, and automated order types (such as limit orders) and pay a lower FX fee of 0.59%.

The interest payable on uninvested cash is more attractive, too – 3% AER on up to £2,000 – and the treasury custody fee is reduced to 0.10%.

Freetrade Plus Plan

£11.99 per month (or £119.98 per year).

You get everything you would on the Freetrade Standard Plan, plus:

• You can open a SIPP (Self-Invested Pension Plan)
• 5% AER on up to £3,000 uninvested cash
• 0.39% FX fee
• Priority customer service

The Freetrade platform is also available on desktop to Plus Plan subscribers.

Trading 212 Accounts

All of Trading 212’s accounts are free, and you can switch between them in the Trading 212 app.

Trading 212 Invest

Invest commission free in more than 13,000 shares and ETFs from around the world.

However, you will be charged a 0.15% fee for trades in a different currency, and deposits into your account are charged at 0.70% after you have deposited more than £2,000 in total (though these fees don’t apply to bank transfers).

Trading 212 ISA

All the features available in Trading 212 Invest, but in an ISA wrapper.

Trading 212 CFD

This is the account that gives you access to trading in forex, commodities, indices, and cryptocurrencies. However, it’s not for the faint-hearted!

Though they can help to explode potential profits, CFDs carry much more risk – you can lose all your investment, plus some.

To help protect you against even worse damage to your wealth, you will have negative balance protection, and you can place stop loss and take profit orders. There is no deposit fee in this account, though a 0.5% fee for closing a position that is not in the same currency is charged.

(I’ve traded CFDs profitably in the past, but the experience can be something of a rollercoaster ride. The ups and downs can be violent and, according to Trading 212 themselves, 77% of retail investors lose money when trading CFDs.)

If you are a very experienced trader, you can upgrade to a Trading 212 Pro Account to gain access to leverage of up to 1:500.

For example, if you have deposited £100 and trade with a 1:10 leverage, you can open a position worth £1,000. Way more profit potential, accompanied by way more loss potential.

Trading 212 pays interest of up to 5.1% on uninvested cash, though the exact AER depends upon the currency in your cash account.

Demo Trading Accounts

Only Trading 212 offers a demo trading tool, and I would highly recommend that you make effective use of this. It will help you get used to the platform, as well as try out your trading strategy.

Always commit your time before you commit your money.

What Assets Can You Trade On Freetrade Vs Trading 212?

Both Freetrade and Trading 212 give you access to trade shares and ETFs.

In Freetrade’s case, more than 6,000 in the UK, US, and Europe. As a Basic Plan holder, you can trade in the UK 350 (Large + Mid Cap), Freetrade US 500, Vanguard + iShares + Invesco ETFs, AIM 100, and Europe 150.

As a Standard or Plus Plan subscriber, you’ll also be able to invest in other UK small cap shares, US shares, ETFs, and European shares.

You only need to deposit £1 to open an account at Freetrade, and the minimum trade size is just 10 pence (£0.10).

Trading 212 gives you access to more than 13,000 global investment instruments, including shares, ETFs, commodities, FX, and cryptocurrencies: great coverage. You can also set up ‘Pies’: not the steak and kidney sort, but an auto-investment facility that lets you set up your own portfolio of up to 50 securities.

It’s like being your own fund manager, and you can even set deposit schedules, investment duration, and deposit amounts. (I love this facility – I only wish they would create a SIPP that allows you to do this. Now that would be cool!)

The minimum deposit at Trading 212 is £1 (£10 for a CFD account) with a minimum trade size of £1.

How Do Costs Compare?

As a trader or investor, it’s crucial to consider all your costs as they can significantly impact the overall performance of your investments. Even small fees can compound over time and make a significant (negative) difference to your returns.

Here’s how Freetrade and Trading 212 stack up in terms of costs:

Also note that you will need to pay any taxes or other charges levied by governments, tax bodies, or exchanges in the countries where you trade.

User Experience

Navigating the Trading 212 app is a smooth, effortless experience. You can switch between accounts and instruments easily. It’s just as easy to access charts and fundamental analysis, and placing trades can be done in just a couple of clicks.

Freetrade’s app may not have as many features as Trading 212, but it’s similarly easy to use. It’s a no-fuss approach that is ideal for beginners, with all the information you need at your fingertips.

How Do Freetrade & Trading 212 Make Money?

No commission and low costs are the name of the game at both Freetrade and Trading 212, but they must make money to survive. How they do so is different.

Freetrade makes its money mostly through subscriptions on its premium plans, charging for additional features.

Trading 212 relies heavily on making money from the spread between buy and sell prices on its platform, as well as some service fees.

Are They Safe To Use?

As well as offering a great platform experience, both Freetrade and Trading 212 have implemented robust security measures to protect their customers.

Both are authorised and regulated by the Financial Conduct Authority (FCA), which means they must adhere to the strictest financial and operational standards.

Your money is protected by the Financial Services Compensation Scheme (FSCS), too. This means that, should either company suffer financial difficulties (such as bankruptcy), you could be eligible for compensation and £85,000 of any money you hold at either company is fully protected.

(Of course, this doesn’t cover investment performance – as we all know, the value of your investments can go down as well as up.)

Additional security measures include industry-standard encryption to protect users’ personal and financial information, and two-factor authentication (2FA), to add an extra layer of security at login and for certain transactions.

In short, both Freetrade and Trading 212 are safe to use.

Are Freetrade & Trading 212 Good For Beginners?

If you’re just starting out in DIY investing, choosing a trading platform can be a daunting proposition.

You won’t be disappointed whether you invest in Freetrade or Trading 212. Each benefits from what I consider to be the key factors for those starting out on their investment journey.

The trading apps themselves are easy to navigate, and make selecting investment instruments and then trading them easy. Real-time snapshots of your positions and performance make monitoring your portfolio a breeze, and Trading 212’s Pie feature is a real winner.

Now, although I would be classed as an experience professional, I believe there is always something to learn. Which is why I also think the educational materials on both platforms are extremely useful, especially for novices.

So, too, is the social aspect – it’s good to be able to discuss ideas and hear ‘the noise of the trading room’.

It’s easy to open an account, and the low and transparent fees are a huge plus. The customer service at both is good, with access in a variety of ways including in-app chats and email.

To round things off, you can use a demo account to evaluate the Trading 212 app and get used to placing orders, and low deposits and fractional share trading mean you don’t need to commit your life savings to get started.

What Do Other Customers Say?

It’s always good to hear what others have to say. This helps you gauge reputation.

Trading 212 has received almost 29,000 reviews on Trustpilot, with more than three quarters of these giving the platform 5 stars, and an overall score of 4.6/5 stars. Customers are quick to point out the app’s easy-to-use design and accessibility for beginners.

Freetrade scores a slightly lower 4.1/5 stars on Trustpilot, from almost 4,000 reviews. 67% of these reviews are 5 stars, with many remarks commending the app’s user-friendliness and customer support.

Pros & Cons Summarised

As a brief recap, let’s look at the pros and cons of both trading apps:

Freetrade

Trading 212

Our Take

The choice of which trading app is best for you boils down to your investment goals and preferences.

If you want a simple, easy-to-use platform that focuses on shares and ETFs, with zero commission, then Freetrade could be the one for you.

On the other hand, if you want a wider choice of investment options with features like semi-automated portfolio creation, Trading 212 could be more up your street.

Regardless of which you select, make use of all the features available, especially the demo account with Trading 212.

Of course, whichever you choose, it’s important to remember that when trading or investing, your capital is at risk. Always make sure that you invest in line with your financial goals and your appetite for risk.

Finding ways to make your money work harder for you doesn’t have to be like searching for the Holy Grail. Sure, it suits some so-called financial experts to make things sound as complex as possible, but the truth is that anyone can employ a few easy tactics to be smart with money instead of having to work harder for money.

You see, it’s not about how much you earn. It’s about how wisely you use your earnings. Every pound you cut from spending, and every penny you reduce from debt, can be funnelled into savings and investments that make your life easier today and fruitful in the future.

When you develop good financial habits, making your money work harder for you is no longer a challenge. It’s just something you do daily. It’s not hard to do – but you do have to be strategic.

Let’s get started, shall we, with 30 smart tactics to make your money work harder.

Boost Your Money Smarts

Being smart with your money is about getting it to do the hard lifting for you. We’re going to touch on a few key areas.

First, changing the way you think about money. Mindset is everything – it’s the foundation of finances that work for you, rather than for others.

Next, we’ll dive into a few tips around budgeting, before tackling debt – you don’t need the cost or stress of debt, do you?

We mustn’t forget about savvy spending – a game where you really can win big. I’m going to show you how. Of course, I’ll also discuss a few key tactics to use when saving and investing, because this is where your money really starts to grow.

Finally. I’ll examine something that so many forget about – investing in yourself. Why? Because you are your most important and valuable asset.

Refine Your Money Mindset

Shifting your money mindset is more than being positive about your finances. It’s about being smart with your money. Here are three crucial tactics:

1. Improve Your Financial Knowledge

In whatever you do, knowledge is power. If you know how to play the game, you’re more likely to be the winner.

By spending a little time each week seeking financial education through blogs, podcasts, and books, you’ll up your game quickly. You’ll learn the ropes of planning your finances, get access to better financial deals and products, and make better decisions about your money to help you achieve your financial goals faster.

2. Set Your Financial Goals

Speaking of goals, let’s talk about goal setting. Have you ever heard of SMART goals? Specific, Measurable, Attainable, Relevant, and Time-bound. It’s like saying, “I want to save £1,400 for Christmas, with a regular savings plan,” instead of, “I want to save some money.”

When you set SMART financial goals, they give you clear targets. You can split them into mini-milestones and actionable steps, and track your progress more easily.

3. Automate Your Finances

Things are so much easier when they are on autopilot, aren’t they? To save, set a standing order to move money into your savings account on the day after you get paid.

You’ll soon not notice the difference, and you won’t need to lift a finger. Put your regular bills on direct debit to avoid missing a payment and incurring late fees.

In fact, automating your finances is a terrific way to make budgeting easier.

Budgeting

We often think that budgeting is about restricting ourselves. In truth, it’s about understanding your money to make it work harder for you.

Now, I know that budgeting can be overwhelming, and you might even find it tedious, but there are some things you can do to make it a breeze.

4. Track Your Spending

Here’s the part that most of us find most challenging. Oh, we start off with the best intentions – we might even buy a new cashbook to keep a diligent record of our spending, or create a spreadsheet to make the job a little easier.

But tracking your spending often goes the way of New Year’s resolutions – starting with an enthusiastic bang and fizzling out with a whimper.

So, here’s your first SMART goal: write down every penny that you spend for two weeks. Whether it’s a morning coffee or your electricity bill, make a note of it and categorise it.

Sure, this is a chore – but it’s also eye-opening. You’ll start to notice patterns where you are leaking cash.

5. Use A Budgeting App

I always found the most challenging aspect of tracking my spending was to remember to write everything down. Even when I collected receipts, they usually gathered dust on my desk before being thrown away after weeks.

This is why I love budgeting apps.

Not only do apps like Moneyhub let you connect all your cards and categorise spending on them, but they also give you a real-time review of your spending habits and financial position.

Other budgeting apps like Snoop help you to identify cheaper alternatives for household expenditure, while Plum is a great app to help you create and maintain a budget that targets saving and investment.

Of course, one of the best things about budgeting apps is they remove all the tedious work from budgeting – providing you always use connected cards when spending any money.

The result – you’ll be tracking your spending automatically, categorising it precisely, and receiving real-time insights into how you are spending.

6. Create A Detailed Budget

Once you have a better understanding of where your money is going, effective budget planning will put you in control of it. You’ll need to list your income and expenses, and prioritise your spending – and don’t forget to include occasional expenses like birthdays, Christmas, and holidays.

Now you can allocate your money to cover all your priorities and other spending. Banking apps like Monzo and Wise let you create jars to keep money separate.

I have jars to cover things like car insurance and servicing, Christmas saving, shoes and clothes, and holiday spending, as well as savings jars for other specific goals. They’re like accounts that are ringfenced from my everyday spending.

You can also use these mini accounts to put aside money for food shopping, travel expenses, entertainment, and more. Once you have spent the money in a jar, no more spending in that category until after your next pay day.

7. Review Your Income & Spending

You can’t manage what you don’t monitor. People get into money problems when they take their eye off the ball. Take a bad kick with your finances, and you’ll soon be scoring own-goals for fun – except it isn’t fun, is it?

Checking in on your finances monthly helps you keep a tab on your spending habits and stay on track to achieve your financial goals. It’s much easier to make small adjustments each month than to be forced to make a massive change every six months.

Budgeting isn’t about being rigid with your money. It’s about being aware of how you are spending, identifying how you can reduce expenditure, and being flexible to adjust along the way.

8. Negotiate Regular Bills

Are you overpaying on your regular bills? Here’s a challenge for you – pick up the phone and ask for a lower price. You’ll be surprised at how many providers will react positively – especially if you threaten to leave or switch to another provider.

Take Sky as an example. They often offer cut-price deals to new customers. That’s not fair, is it?

Call their customer retention team, and tell them you are considering leaving. You could save hundreds of pounds each year while remaining on the same package. (A family member did this last year, and saw his monthly subscription reduced by almost 50%, saving him almost £500 a year.)

Budgeting Overview

Stop thinking about budgeting as penny pinching! It’s about being in control, and making good financial decisions. By tracking your spending, using budgeting apps, creating a detailed budget plan, and reviewing regularly, you are set for success.

It may take a little effort at the start but, once it becomes habitual, you’ll see your finances start to move in the right direction. You’ll be less stressed, and have more financial freedom.

Paying Down Debt

Debt: a four-letter word with dictionary-sized consequences. Like an invited guest who turns up to your party, drinks all your alcohol, eats all your snacks, and then hangs around way too long.

Like a payday parasite, eating away at your earnings and leaving a wound that just won’t heal. If only you could show debt the door, your bank balance could be transformed overnight. Here’s how:

9. The Debt Avalanche Method

That pile of debt is like a mountain to climb, isn’t it? The debt avalanche method of debt reduction is like tackling the steepest slopes first. Get those out of the way, and the rest is like a hike in the park.

What are the steepest debts you have? Those with the highest interest rates – they never get smaller. This is where you want to throw as much money as possible, starting with the debt that has the highest interest rate (often a credit card).

Once you’ve secured the highest debt from avalanching, move onto the next.

10. The Debt Snowball Method

If you have small debts littering your accounts, these are the snowballs, and they can be easy to tackle, leaving you freer to clear those big avalanches.

The avalanche (higher-rate) debt is your priority. But if there’s a much smaller debt you can afford to clear too, it’ll make quite a difference to you mentally as well as financially.

11. The Debt Consolidation Method

Have you been shopping and tried to hold all you have bought in your arms? It’s easy to drop a few items, isn’t it? Having a few debts hanging around can be the same. Drop one, and the result could be devastating.

Debt consolidation is packing all those debts into a single basket – one loan with a lower rate of interest. Easier to manage, and less interest to pay.

The key to real success with this method is to continue paying the same amount if you can, to chip away at the debt faster.

12. Overpay Your Mortgage

Now, a mortgage is usually the last debt you should seek to repay as quickly as possible. It’s what I call good debt – it puts a roof over your head and, hopefully, the value of your home will increase over time.

However, if it’s the only debt you have, you might consider making extra payments to pay off your mortgage faster (providing the T&Cs of your mortgage allow you to without penalties).

What difference could regular overpayments make?

On a £200,000 repayment mortgage with 20 years remaining and an interest rate of 5%, were you to overpay by £100 per month, you would pay off your mortgage two years and three months early.

That extra £100 a month will save you almost £15,000 in interest. Oh, and you’d have an extra £1,419.91 in your pocket every month once your mortgage is repaid.

Debt Overview

Paying down debt frees up money to work harder for you. You’ll have more money to save and invest, or to enjoy your life more.

Your finances shouldn’t be a source of stress. When you start to see your debts disappear, you’ll be ready to tackle your financial goals with extra gusto.

Savvy Spending

Savvy spending isn’t about pulling your purse strings so tight that it strangles the joy in your life. It’s about making smart spending choices to help you toward your financial goals without decimating your lifestyle.

13. Focus On Wants Vs Needs

Step one is to distinguish between wants and needs. We’re back to mindset in a way – having the mental discipline to pause before spending and ask yourself, ‘Is this something I really need?‘

One simple question that could prevent you unnecessarily spending your money.

14. Wait Before You Impulse Buy

Do you suffer from impulse buys – you see something and just have to purchase it? Forget impulse buys, they are more like regret buys.

Whether it’s a Mars Bar or a pair of shoes, do yourself a favour and wait at least 24 hours before you splash your cash on impulse. It’s a fantastic tactic to save you from buyer’s remorse and maintain a healthy budget.

15. Use Cashback & Rewards Cards

Turn your everyday purchase into rewards or cash. Opt for cards that offer the best points in your main spending categories and help build rewards toward things you like to do, like travel and overnight hotel stays.

Don’t forget, though, that if you don’t pay off your balance in full each month, you’ll rack up interest faster than value.

16. Sign Up For Loyalty Cards

Store loyalty cards are easy wins. They are usually free to join, and will unlock exclusive prices, rewards, and other benefits at your favourite shops. Regularly review point balances and redeem them for discounts, products, or services.

17. Shop In Bulk

Especially for non-perishable items (like toiletries and cleaning supplies) and long-dated items (like tinned goods and dry goods), you can save significant amounts when you buy in bulk.

Not only will you save money, but you could also reduce the number of shopping trips you need to make, saving time as well as money.

Here’s an example:

A popular supermarket recently had Heinz tomato soup on its shelves at the following prices:

• A single can for £1.40
• Five cans for £5.00
• A Pack of six cans for £5.00
• Two packs of six cans for £8.00

That’s a price range of £1.40 to £0.67 per can, proving that when you buy in bulk, every little extra helps.

18. Warehouse Club Membership

Join a Warehouse Club like Costco, and you could save on bulk purchases as well as earn cashback on eligible shopping.

19. Shop Around For Insurances

Don’t settle for the renewal quote from your existing insurer. Whether it’s for your car, your home, or other insurance needs, shop around. Make sure that you aren’t paying for cover that you don’t need either. You can save hundreds of pounds each year.

(Tip: Check what insurance cover you have through your credit cards before you buy another policy – often, insurance like travel insurance is included.)

Savvy Spending Overview

When you become a savvy spender, you become much more money savvy. Find that balance between needs and wants, and don’t let money slip through your fingers, and you’ll be well on your way to making your money work harder. Because you’ll have more in your bank account to pump into saving and spending.

Saving & Investment

Here’s where making your money work harder for you gets really juicy! You could say that everything so far has led to this. It’s not simply about squirrelling your money away, it’s about savvy saving and smart investing.

20. Set Up An Emergency Fund

If you don’t have an emergency fund already, this should be your savings priority. An emergency fund is the buffer you need to help you hurdle life’s little nasty surprises effortlessly.

A car repair, medical emergency, urgent home maintenance, or loss of your job all take their toll on your finances. If you are prepared for them, you can take all of these in your stride. An emergency fund of between three and six months of living expenses will give you peace of mind and financial stability.

You’ll need instant access to your emergency fund, but this doesn’t have to mean poor interest rates on your savings. For example, the Chip Instant Access Account currently pays 4.84% AER.

21. Pay Into A High-Interest Savings Account

The problem with cash savings is that they rarely beat inflation, so over the long term they won’t help you build wealth or sustainable income. Make sure your savings are earning the highest rate of interest possible.

This doesn’t have to be hard work – you could opt for the Active Savings Account at Hargreaves Lansdown and get great rates with no hassle.

22. Start Investing Early

The earlier you start investing, the more you’ll benefit from compounding – a phenomenon that Albert Einstein called the eighth wonder of the world. Over time, you’ll earn interest on your interest, or dividends on the shares bought with previous and ongoing dividends payments.

Compounding is a key to exponential growth in the value of your investments.

For example, if you start investing at 30 and save £100 per month until you are 60 in an investment that earns an average of 5% per year, you will have invested a total of £36,000 and have a fund with a value of £79,726 when you reach 60.

If you had started investing at age 20, you would have saved a total of £48,000 and have a fund of £144,959 at age 60. (Remember, this is an illustration only.)

23. Maximise Tax-Efficient Investments

Tax is a killer, especially when it comes to investments. Which is why you need to use tax-efficient investment wrappers to their max. Individual Savings Accounts (ISAs), workplace pensions, and Self-Invested Personal Pensions (SIPPs) offer tax benefits that can seriously pump up your wealth.

Take that £100 per month investment growing at 5% per year. In a workplace pension in which your contributions are matched, you’ll benefit from an employer contribution as well as tax relief. Your £100 contribution will attract tax relief that adds £25, and then a matched contribution of £125 from your employer – a total of £250 per month.

Over the course of 30 years (again, growing at 5%), your £100 will grow to approximately £199,316. If investing over 40 years, you’ll end with a pension pot of around £362,399 – more than three times the average pension pot in the UK.

(Again, remember that this example is an illustration only – you should always seek personal advice.)

24. Automate Your Investments

Just as you can automate contributions into investment accounts, you can also let technology do much of the work for you. Using a robo advisor like Wealthify or Moneyfarm, you simply enter details about your tolerance and attitude to risk and your financial goals (often by a simple questionnaire), and your investments are worked out for you, using algorithmic trading.

The platform manages your investment portfolio, choosing investments to suit your investor profile and making small adjustments over time to keep your portfolio on track. The result is a hands-off investment approach that is disciplined and prevents emotional decision-making.

25. Peer-To-Peer Lending

Never heard of peer-to-peer lending? It’s like you becoming the bank. Through platforms like Kuflink, Loanpad, and CapitalStackers, you lend money to individuals and small businesses. You earn interest on these loans, often higher than you would in, say, a savings account.

Your primary risk is borrower default, though this risk is reduced by diversifying the loans you make (which is usually done by the platform).

Saving & Investment Overview

Whether it’s the lower stress you feel when you maintain an adequate emergency fund, the exhilaration of seeing your investments rise in value, or the satisfaction of passive income in retirement, saving and investing is the key strategy to make your money work harder for you.

By taking the conscious decision to save and invest, and taking advantage of tax-efficient investment wrappers, you’re setting yourself up for a more fruitful and meaningful life. Each pound you invest is a stepping-stone toward your financial freedom.

But remember, this is a marathon, not a sprint. It requires patience and consistency – if you’re advised to invest in a get-rich scheme that sounds too good to be true, at best it usually is, and at worst it’s a scam.

Build Financial Freedom From Solid Foundations

Making your money work hard for you is within your grasp. By refining your money mindset and budgeting wisely, you lay the foundations to build toward financial freedom. From this base, everything you do can help you build life-changing wealth.

Every penny of debt you repay quickly gives more financial wiggle room. Being savvy about your spending leaves more money in your wallet. Money with which you can then build and maintain a financial safety net, before saving and investing toward life-transformative goals.

If you aren’t thinking about investment for retirement, you’re falling short in your financial planning.

You don’t want to be working until the day you die, do you? Will the State Pension be enough to provide you with a comfortable lifestyle when you’re no longer working?

The answer to these two questions is ‘no’.  Which is why schemes like the NEST pension are so important.

“What’s NEST?” you ask.

Read on and learn all you need to know – what it is, how it works, who it’s for, how much you can pay in, and more.

NEST Pensions Pros & Cons

What Is A NEST Pension?

NEST was conceived with the realisation that the State Pension just isn’t sustainable.

Together with increasing the age at which the State Pension can be taken, the government began to introduce new legislation to address the pension crisis.

With the aim of easing the burden on the State and increasing the average pension pot in the UK, new laws have increased the ways in which you can plan for your retirement, take pension benefits, and made it compulsory for employers to provide workplace pensions.

Act of this pensions revolution, the government set up the National Employment Savings Trust (NEST) in 2010. Its aim was to help employers offer a low-cost, accessible pension scheme with auto-enrolment into workplace pensions.

Since its inception, NEST has evolved into a scheme that can also be used by the self-employed, as well as being made available to those who have a share of an ex-partner’s retirement pot because of a divorce settlement.

In terms of structure, NEST is more like the NHS or BBC than a private pension provider – a public service backed by the government.

How Does NEST Work?

NEST is what is known as a master trust. It’s a defined contribution pension (what you get out is dependent upon what you put in – including employer contributions and tax relief – and the growth of the funds in which your contributions are invested).

A master trust allows multiple employers to use it, which means you could have the same pension as someone working for a different company in a different part of the country.

This doesn’t mean your employer relinquishes all control to the trust. Indeed, your employer will make all the major decisions, such as how much you and they contribute, what those contributions are invested in, and the benefits provided by the pension scheme.

Why Do Employers Use NEST?

NEST’s ease of use and flexibility are very attractive to many employers.

It can be used as a sole pension scheme or as part of a menu of pension scheme choices for employees. An employer can manage a NEST pension themselves, or they can use an accountant or payroll provider to manage it for them.

On top of these benefits, NEST is a not-for-profit scheme: it’s free for employers, and charges low fees on investments – and low fees translate into more of each contribution being invested, which flows through to financial outcomes.

Can You Contribute To A NEST pension?

Though NEST’s primary purpose is to provide a platform for workplace pensions, the criteria for eligibility extends beyond those who are employed.

NEST For Employees

If you are eligible for enrolment into your employer’s workplace pension scheme, you will be auto-enrolled provided you are:

• At least 22 years old
• Below State Pension age
• Earning at least £10,000 per year from your job

If you aren’t eligible for auto-enrolment, you might still be able to join your company’s workplace pension scheme (you should speak to your HR department to find out more).

A workplace pension like NEST is a fantastic way to boost your retirement savings. Not only do you contribute, but you benefit from tax relief on your contributions and your employer contributes on your behalf, too. It’s a win/win/win in pension planning!

Example:

• You are a basic rate taxpayer:
• You contribute 4% of your salary
• The government adds 1% (20% tax relief)
• Your employer contributes 2x your contribution (8%)
• Total contribution is 13% of your gross salary!

NEST For The Self-Employed & Others

If you’re self-employed, or you aren’t eligible for auto-enrolment into a NEST pension, you may also be able to join NEST.

You’ll be able to benefit from the advantages of contributing to a NEST pension, including tax relief on your contributions. You’ll need to contribute a minimum of £10 each time you pay in.

NEST For The Divorced

When it comes to divorce, NEST pensions fall under the same rules as other types of pension scheme in the UK: they are governed by a legal framework that aims to ensure fair distribution of marital assets.

Most commonly, pensions are dealt with by a Pension Sharing Order, which transfers part of one partner’s pension (including a NEST pension) to the other partner.

You can join NEST if you have received a pension settlement because of divorce and continue to contribute to the NEST pension through to when you take benefits.

(Tip: Always seek legal advice with regard to pensions when you are divorcing or are divorced.)

Can I Contribute Into My Partner’s NEST Pension?

Yes, you can!

The rules let spouses, partners, and certain others pay contributions into a NEST pension pot – a great way of maximising your partner’s retirement investment.

I’m Unemployed – Can I Contribute To A NEST Pension?

If you have a NEST pension and become unemployed, stop working, or change jobs to an employer that doesn’t offer a NEST pension, you can continue to pay into your NEST pension scheme until you start to take benefits from your pension.

How Is A NEST Pension Invested?

NEST works a little like a lifestyle fund. When you join NEST, you will be automatically invested in what is known as a ‘NEST Retirement Date Fund’. This is designed to rebalance the funds in which your contributions are invested as you get nearer to your retirement date.

In simple terms, investment risk will be reduced the older you get. However, you aren’t locked into this, and can self-select from seven funds, each of which is professionally managed by a team of in-house investment managers:

• NEST Retirement Date Fund
• NEST Ethical Fund
• NEST Lower Growth Fund
• NEST Higher Risk Fund
• NEST Sharia Fund
• NEST Pre-Retirement Fund
• NEST Guided Retirement Fund

The last two of these funds are only available if you are approaching retirement age.

How Much Does A NEST Pension Cost?

While NEST is a non-profit, its costs are paid for by charges levied on its members. You’ll pay an annual management charge (AMC) of 0.3%, plus a one-off charge of 1.8% on contributions.

The monthly contribution fee is quite unusual, though the AMC is relatively low. Here are some examples of how these charges stack up:

These charges compare competitively with most other providers. For example, if you contribute £100 per month with a £25,000 fund value, you will pay annual fees of:

• £96.80 with NEST
• £125.00 with PensionBee’s Tracker Plan
• £187.50 with Penfold’s Standard Plan

However, if you contribute £250 per month with a £25,000 fund value, the NEST annual fee will rise to £129.

How Does A Change In Employment Status Affect A NEST pension?

Who stays with the same employer their entire career today? As your employment status changes, you’ll find that a NEST pension’s flexibility is crucial.

Changing Jobs to an Employer that Uses NEST

If you move to a new job and your new employer also uses NEST, you can continue to contribute to your NEST pension. Simply tell your new employer about your existing NEST pension, and they can direct contributions into it.

Changing Jobs to an Employer That Doesn’t Use NEST

In this case, you can make additional contributions through your NEST account or leave it to grow.

You could also elect to transfer your NEST pension pot into your new employer’s scheme, or open a Self-Invested Pension Plan (SIPP) and transfer into that.

Moving From Self-Employment To Being Employed

If you were contributing to a NEST pension as a self-employed person and become employed, you can continue to contribute via your employer.

Moving From Being Employed To Being Self-Employed

Moving to self-employment doesn’t mean you have to stop contributing to your NEST pension. As a self-employed person, you can continue making contributions directly to your NEST account.

Of course, you will become responsible for managing your contributions and ensuring that they comply with contribution limits.

Are There Any Restrictions On Transfers Into NEST Pensions?

If you are considering transferring existing pensions into NEST, you can transfer from any UK-based pension scheme providing it is transferred via pension or credit transfer, or early leaver cash.

NEST does not accept transfers from defined benefits schemes. The minim transfer amount is £50.

Are There Any Restrictions On Transfers Out Of NEST Pensions?

You can only transfer out of a NEST pension if you have stopped contributing into it. NEST won’t charge you for doing so.

When Can I Take Money Out Of A NEST Pension?

When you can start to take benefits from your NEST pension depends upon how you (or your employer) have set it up. Currently:

• You can ask NEST to set your retirement date at any age from age 55.
• If you haven’t set a retirement date, it will usually be set at your State retirement age.
• If you join NEST after age 65 or your State retirement age, you can choose a NEST retirement date (if you don’t, it will be set at 75).
• If you are over 75, it will be set at 105.

Alternatives To NEST For Your Pension Planning

NEST plays an important role in the pension landscape, especially for auto-enrolment, but there are alternatives. These include:

Personal Pensions

Personal pensions are private pension schemes managed by financial institutions like insurance companies, banks, or investment firms. They are a flexible choice for anyone, regardless of your employment status.

• Pros: Broad investment choices; potential for higher returns; flexibility in contributions.
• Cons: Higher fees compared to NEST and complexity in choosing investments.

Stakeholder Pensions

Stakeholder pensions are a type of personal pension designed to be more accessible and straightforward. With capped charges and no penalties for altering contributions, they can be attractive.

• Pros: Capped charges; no penalties for varying contributions; easy to understand.
• Cons: Limited investment options compared to other personal pensions.

Self-Invested Personal Pensions (SIPPs)

SIPPs give you the most control over your pension investments. You can invest in a wide range of assets, including shares, bonds, and funds.

If you are an experienced or confident investor, or happy to work with a financial advisor or robo-advisor, a SIPP could be the way to go.

• Pros: Wide investment choice; control over your investment strategy; and potential tax advantages.
• Cons: Higher fees and complexity; more suitable for experienced investors.

Non-NEST Workplace Pensions

Most employers offer a workplace pension, and many are non-NEST. These are usually defined contribution schemes, though can be defined benefits.

• Pros: Employer contributions enhance your retirement savings; potential for employer-specific benefits.
• Cons: Lack of portability if you change jobs; varying levels of flexibility and investment choice.

Lifetime ISAs (LISAs)

Not strictly a pension scheme, but can be used for retirement planning. You can contribute a maximum of £4,000 per year until you are 50, with the government adding a 25% bonus to your savings.

• Pros: Government bonus; flexibility to use towards a first home or retirement; tax-free growth.
• Cons: Contribution limits; penalty for withdrawal if not used for a first home or retirement after age 60; does not include employer contributions.

NEST Pension – The Bottom Line

NEST is an important player in the UK pensions landscape. It offers a government-backed, flexible, and inclusive option for investing toward your retirement. For employers, it delivers a simple solution to providing the required workplace pension with auto-enrolment.

However, while total annual fees are competitive, you should be mindful that charges on your contributions reduce the amount invested. The investment choices, while professionally managed, are limited compared to alternatives.

If you are considering opening a NEST pension, transferring in or out of one, or taking benefits from an existing NEST pension, it is always advisable to seek professional advice and take a holistic approach. Is it ever a good thing to put all your eggs in one nest-egg basket?

You’re looking for an investment platform that can help you achieve your financial goals, and you’ve been pointed in the direction of IG and Hargreaves Lansdown. Not surprising – they are two of the best-known and most popular investor platforms in the UK.

Which is the best for you?

In this article, I’ve dissected each for you. From types of investment account to costs of trading, user interface to educational resources, investment assets to managed portfolio options, all you need to know is here.

Who Is Hargreaves Lansdown?

Hargreaves Lansdown started life in the spare bedroom of a Bristol home in the early 1980s. Today, it is one of the UK’s top 250 public listed companies. It boasts more than 1.7 million clients and around £120 billion in assets.

Its services are tailored to both beginners and seasoned investors, covering a range of financial services and types of investment accounts. On its platform you can access a plethora of investment education resources, as well as market analysis and investment advice.

In short, as a Hargreaves Lansdown client, you’ll benefit from a blend of tradition and innovation from a highly respected firm, and an extensive range of available investments.

Who Is IG?

Founded in the mid-1970s, IG was the world’s first spread betting firm.

Headquartered in London, it has more than 300,000 clients around the world, with offices in around 20 countries. Its client base includes traders and investors.

A highly innovative broker, IG provides access to thousands of investment instruments, as well as CFD (contracts for differences) and spread betting.

Its state-of-the-art trading platform is intuitive and delivers a suite of features that are particularly appealing to more experienced traders and investors.

With a long history, extensive client base, and unique position as one of the world’s leading players in CFDs and spread betting, IG caters to a diverse range of investment styles.

Comparison Of Investment Products

When you’re investing, it’s important to use the right type of investment product (aka as investment wrapper or investment account). Depending on your investment goals, you’ll need to choose the wrapper that offers you the best tax efficiency combined with the flexibility you need.

A Self-Invested Personal Pension (SIPP) provides you with control when you are investing for retirement, and you benefit from tax relief on your contributions as well as tax-free growth and income in your fund – though income that you take when you retire is liable to income tax.

An Individual Savings Account (ISA) offers tax-free growth and income within the ISA wrapper. Though you can only invest up to £20,000 into ISAs each tax year, you won’t pay tax on any profits or income you take from ISAs. Junior ISAs are aimed at helping you invest tax efficiently for your children’s future.

A General Investment Account (GIA) is the most flexible of investment accounts. It allows you to trade without investment limits, though there are no tax efficiencies to be gained when investing via a GIA.

Both IG and Hargreaves Lansdown offer GIAs, ISAs, and SIPPs. Hargreaves Lansdown also offers Junior ISAs and Junior SIPPs, which makes them more appealing if you wish to invest for your children’s financial future.

Another key differentiator is that IG offers CFD trading and spread betting. These are highly speculative financial instruments that let you bet on the direction of price movements of underlying assets.

You can make big profits when trading in CFDs or spread betting, but here’s the kicker: get it wrong by just a little bit and you could lose your shirt (and your house).

Investment Assets Choice

By investing through both IG and Hargreaves Lansdown you can trade in a diverse range of investment assets. However, the options available demonstrate that their target clients have distinct investor profiles.

Hargreaves Lansdown offers a comprehensive selection of global assets, including shares, ETFs, corporate and government bonds, and investment trusts. This range of investments lets you create your own diversified portfolio, across industries, geographies, and asset types to match your risk profile.

If you would prefer to let the professionals manage your investments, access to thousands of funds as well as HL Select Funds and their Wealth Shortlist provides a huge spectrum of opportunity.

Hargreaves Lansdown also offers advisory services, providing personalised investment recommendations to suit your financial goals and risk tolerance.

IG are more focused on providing market access to active traders or those with more speculative investment strategies.

Like Hargreaves Lansdown, IG offers a huge range of global shares and ETFs, as well as investment trusts. But they also offer investors the opportunity to trade in Forex and CFDs, and follow a spread betting strategy – both of which appeal to traders who wish to speculate on market price movements without owning the underlying assets.

Neither Hargreaves Lansdown nor IG offer direct investment into cryptocurrencies, though IG does offer crypto CFDs and spread betting.

Do IG & Hargreaves Lansdown Offer Managed Portfolios?

If you prefer a hands-off approach to investing, IG and Hargreaves Lansdown have you covered with their managed portfolio options. These are designed to cater for investors who might not have the time, expertise, or desire to manage their own investments.

IG offers its IG Smart Portfolios service – a suite of managed investment portfolios that have been created with BlackRock (the world’s largest investment manager). Each portfolio is composed of iShares ETFs and is aligned to a different risk profile, from conservative to aggressive growth.

They are actively managed by experts who balance the selection and allocation of ETFs to optimise performance according to market conditions.

Hargreaves Lansdown’s ‘Ready-Made Portfolios’ are designed to help you invest in a diversified way without needing to invest in individual assets.

Hargreaves Lansdown’s in-house team manages these portfolios, selecting the assets they buy, hold, and sell according to market conditions and investors’ varying risk profiles from cautious to adventurous.

Hargreaves Lansdown also offers a simplified managed portfolio service: Portfolio+. This is a collection of six ready-made investment portfolios designed to suit different investment strategies and goals.

Charges, Fees, & Other Costs

If you are investing, there are some charges you cannot escape, such as taxes or exchange trading fees. However, both IG and Hargreaves Lansdown are transparent with their fee structure and charges they levy – and both offer tiered charging structures, too.

IG Fees & Charges

Trading charges

IG has a tiered charging structure for trading in shares and ETFs, based on the number of trades you have executed in the previous month. The basic charge is £8 per trade for UK shares and £10 for US shares.

This reduces to £3 and £0 respectively if you have traded at least three times in the previous month.

Dealing In Funds

When you invest in IG’s smart portfolios, costs start from 0.5% of value but are capped at £250 per account type.

Custody Fees

You’ll pay £24 per quarter per account, waived if you make three or more trades in the quarter, or if the account holds more than £15,000 in a Smart Portfolio.

CFD & Spread Betting Costs

When you trade in share CFDs, you pay a commission as well as trade at the market spread.

In the UK, online trading commission is 0.1% with a minimum of £10. In the US, commission is 2 cents per share with a minimum of $15. Commission is higher if you trade over the phone.

When spread betting, you only pay the spread, though the spread depends on the underlying asset.

With both CFDs and spread betting, if you keep a position open overnight you will incur overnight funding charges. How much you’ll pay depends upon the underlying asset and the size of your open position.

Other Fees

Other fees charged by IG include foreign exchange fees of 0.5% and a same-day transfer fee of £15 on a transfer of less than £100. If you make a deposit via a credit card or PayPal, there is no charge applied.

Hargreaves Lansdown Fees & Charges

Trading charges

Hargreaves Lansdown is by no means the cheapest broker in the market. It charges a flat fee for buying and selling shares and ETFs of £11.95 per trade.

If you are a frequent trader (10 to 19 trades per month), this is reduced to £8.95 per trade. Active traders (20 or more trades per month) see this trade fee reduce further to £5.95 per trade.

If you wish to trade by phone, you’ll be charged 1% of the value of a shares trade, with a minimum charge of £20 and maximum of £50.

Dealing In Funds

Hargreaves Lansdown does not charge for dealing in funds.

Custody / Management Fees

Custody / management fees are charged on a sliding scale, and are applied as follows for a GIA, ISA, or SIPP:

Funds:

• £0 to £250,000 – 0.45%
• £250 to £1 million – 0.25%
• £1 million to £2 million – 0.1$
• Over £1 million – No charge

Other investments (shares / investment trusts / ETFs / gilts and bonds):

• In a GIA – no annual charge
• In a Stocks and Shares ISA – 0.45%, capped at £45 per year
• In a SIPP – 0.45%, capped at £200 per year

Other Fees

Other fees charged by Hargreaves Lansdown include per trade foreign exchange fees of 1% on the first £5,000, scaling done to 0.25% on trades of more than £20,000.

Hargreaves Lansdown does not charge for transfers in or out of your funds, nor does it charge for direct debits.

Minimum Investment Amounts

Both IG and Hargreaves Lansdown have a low barrier to entry – you only need to deposit £1 to open an account with Hargreaves Lansdown, and there is no minimum deposit to open an account with IG.

You can set up a regular investment plan at Hargreaves Lansdown, though the minimum monthly investment is £25.

IG Website / Trading App

Geared toward more active traders, you’ll find IG’s mobile and desktop platforms offer a streamlined trading experience, backed up with sophisticated charting tools.

The mobile app delivers robust functionality, with live market data, real-time quotes, and interactive price charts. You can set price alerts, and analyse trends using a slew of technical indicators and drawing tools.

On both the mobile app and desktop version, you’ll have access to all the news and analysis you need to make informed trading decisions – and you can set up automated trading, too, as well as use the risk management tools to monitor your portfolio more effectively.

The interface has been designed with the trader in mind. It’s fast and intuitive, and you can customise its appearance to suit how you want to see all the data and market prices available to you.

Extensive yet easy-to-use research and trading tools, and access to the IG Academy to bolster your knowledge and skills through courses, webinars, and more – it’s a great trading tool whatever your level of investment experience.

Hargreaves Website / Trading App

You can access the Hargreaves Lansdown platform on both desktop and as a trading app on your smartphone. The features available cater for all levels of investment experience.

You’ll find that the mobile app makes it easy to manage your investments on the go. You can trade directly from the app, view and manage your portfolio, and get real-time market data and analysis.

You can even set up watch lists and receive price alerts for the assets that interest you most. With an integrated news and research section, you’ll never be short of the information you need to make investment decisions.

As a desktop app, you’ll have even more tools and features available to you. This includes portfolio analysis tools and comprehensive educational resources that include articles, videos, and webinars.

Whether using the mobile app or desktop version, you can place a variety of order types, including at market, limit orders, and stop-loss orders.

Overall, the website and mobile trading app balances advanced research and analytics with easy-to-use trading tools. It’s a great platform for newbies and seasoned investors alike.

Investor Education

I know I’ve mentioned investor education resources above, but I think it’s worth taking a closer look at what each firm offers. Neither lets you down.

IG’s investor education resources focus on providing those new to trading with the knowledge they need to start on the right foot, while also delivering to more experienced investors who want to refine their trading strategies.

The IG Academy is the standout feature. It offers free online courses covering a range of topics from fundamentals to advanced strategies and risk management.

You can progress at your own pace, benefiting from interactive investor education and quizzes to test your growing knowledge.

You’ll also have access to live webinars with themes such as market insights, trading strategies, and live Q&A sessions with experts. And, of course, there’s in-depth news and analysis available, including daily updates, expert commentary, and market analysis.

You don’t need to worry about any technical trading language going over your head, either – IG’s trading glossary is at hand to help you.

Like IG, Hargreaves Lansdown delivers a near-mountain of investor education. A library of guides and articles is at your fingertips, covering everything from the basics of investing to investment strategy, via a route that includes retirement planning and tax implications.

There are videos and webinars, including investment product guides and sessions that discuss financial planning and market movements.

You’ll benefit from its pension and ISA calculators, as well as investment planning tools. And if you want a deeper insight, take time to digest the detailed investment reports and analysis that are a hallmark of Hargreaves Lansdown’s approach to keeping its clients fully informed.

Are IG & Hargreaves Lansdown Safe To Use?

Something you must always check out before signing up to any trading platform, brokerage, or other financial service, is whether it is safe to use. While the value of your investments can fall as well as rise, you want to avoid putting your money into unsafe hands.

Both IG and Hargreaves Lansdown are authorised and regulated by the Financial Conduct Authority (FCA) in the UK, meaning they must adhere to strict financial and ethical standards.

On top of this, they are both covered by the Financial Services Compensation Scheme (FSCS) – a safety net that insures up to £85,000 of any money you hold with either firm should they go bankrupt.

You’ll also want to know if they do all they can to protect your personal data and accounts from malicious activity. Again, there’s nothing to find fault with.

From two-factor authentication (2FA) for account access, encryption technology to secure data transmissions, and continuous monitoring for potential threats, the security measures employed meet banking security standards.

IG Pros & Cons

IG’s strengths lie in the broad market access it provides, together with advanced trading tools, great educational resources, and CFD and spread betting opportunities.

On the downside, its charging structure could be seen as complex (with potentially costly fees for certain services), and being more targeted to active traders means it’s less tuned into beginner investors.

Hargreaves Lansdown Pros & Cons

Offering a wide range of investment options, user-friendly tools, and extensive research and analysis, as well as excellent educational resources, Hargreaves Lansdown will appeal to all investors, whether you’re a beginner or have years in the game.

However, high fees compared to some competitors will be a consideration if you are cost conscious, and the trading tools may not be advanced enough for more active traders.

Get The Most from IG Or Hargreaves Lansdown

Whichever is your choice of investment platform, how you use it will be a big factor in your success. Here are five tips to maximise the features and benefits of both IG and Hargreaves Lansdown:

1. Leverage Educational Resources

Investment markets don’t stand still, and neither should you. There is always something to learn.

Get stuck into the educational materials available to you. Take part in webinars. Read articles. Take courses. Knowledge is power and profit.

2. Utilise The Demo Account (IG) Or Low Minimums (Hargreaves Lansdown)

Whether you’re new to trading or an experienced investor, make use of IG’s demo account and the low minimums available with Hargreaves Lansdown to test strategies and get used to the platform.

Investing successfully is a marathon, not a sprint, and a slow start should pay handsome dividends.

3. Engage With Market Analysis & Research

Take advantage of the comprehensive market analysis and research offered on both platforms. It will help you identify potential investment opportunities as well as reduce risks.

4. Take Advantage Of Tools & Apps For Portfolio Management

With so many features available on both platforms, it would be a crime to ignore them! Wherever you are, providing you have internet access you can monitor your portfolio’s performance, set alerts for price movements, and execute trades – investment control is at your fingertips.

5. Consider Managed Portfolio Services For A Hands-Off Approach

If you don’t fancy managing your investments yourself, then hand the reins over to IG or Hargreaves Lansdown by investing in their managed portfolios. They are excellent options for hassle-free investment.

The Final Analysis

If you’re focused on long-term investing, Hargreaves Lansdown is the best platform because of its comprehensive range of investment options, extensive research and analysis, user-friendly interface, and excellent customer service.

Whether you’re a novice or seasoned investor, it’s a great choice for developing and managing a diversified portfolio.

On the other hand, if your focus is on frequent trading and more speculative instruments like CFDs and spread betting, you’ll benefit most from IG’s advanced trading tools, in-depth market analysis, and educational resources geared toward trading strategies.

Which is best for you depends on your investment style, asset preferences, and investment goals.

Whatever your choice, always be mindful that asset prices and values of investments can fall as well as rise – and use the strengths of your chosen investment platform to help you fulfil your financial objectives at a level of risk with which you are comfortable.

Fidelity and Vanguard. Two giants in the investing world. They’re known for their size, global presence, and excellent reputation for performance and service.

However, they have very different approaches to helping their customers achieve their financial goals.

You may already hold either Fidelity or Vanguard funds. It could be that you want to make your own investment decisions but are unsure of which platform to use – and Vanguard and Fidelity are on your radar.

I’ve composed this guide to help you make an informed choice. Read on to discover each platform’s unique tools and resources, product and asset ranges, costs, and pros and cons – because when you’re investing, knowledge isn’t only power, it’s profit.

Who Are Fidelity & Vanguard?

Fidelity

Fidelity was founded in the United States when the world still watched television in black and white. It’s now a global investment house, helping people to save and invest for their future.

They offer a huge range of investment options, from mutual funds to pensions, stocks, bonds, and more. They boast more than 1.5 million customers in the UK alone.

Vanguard

Vanguard was founded in the mid-1970s, with an aim of keeping costs low and helping the ordinary person invest for the long term.

The ethos? Stick with your investments to ride out the ebbs and flows of the market instead of trying to outsmart it. Theirs is definitely a ‘set and forget’ modus operandi.

They’re not as big as Fidelity (with ‘only’ half a million UK-based customers), but are growing strongly.

Investment Wrappers: A side-By-Side Comparison

One of the key decisions you’ll need to make when you invest is how to invest as tax-efficiently as possible, and in a way that helps you meet your financial goals.

What we’re talking about here is investment products, also known as investment wrappers. Both Fidelity and Vanguard offer a General Investment Account (GIA), ISAs, Junior ISAs, and SIPPs.

A SIPP (Self-Invested Personal Pension) is designed to help you invest for your retirement. You’ll get tax relief on your contributions, and you can take 25% of your fund as a tax-free cash lump sum (usually from age 55, though this is rising to a minimum age of 57 from 2028).

Capital growth and income within the SIPP are free from tax, though any income you receive after you retire is tax liable.

An ISA (Individual Savings Account) is more flexible than a SIPP, allowing you to withdraw from it at any age. Your contributions into an ISA won’t benefit from tax relief; though, like a SIPP, capital gains and income within the ISA are free from tax.

Importantly, any withdrawals you make from an ISA are non-taxable, including any income. Junior ISAs are especially designed to help you invest for a child.

A GIA has no tax benefits, but also no restrictions on how much you can invest.

Investment Asset & Instrument Range

Once you have decided how you wish to invest, you’ll need to decide what assets to buy and hold in your investment wrapper. You might use more than one type of investment wrapper, depending upon your goals and personal circumstances.

You might think of Fidelity vs Vanguard like you would Netflix vs Disney.

Fidelity is the Netflix of the two. It offers a huge range of funds from multiple providers. You can also invest in shares, ETFs, and investment trusts.

In total, you have a choice of more than 6,000 investment instruments from around the world, allowing you to mix and match your investments to match your investment style and financial goals.

Vanguard is more like Disney – you can only invest in its funds. It’s a different approach to Fidelity. Vanguard likes to keep things simple, and to be fair, the choice includes some of the lowest-cost funds available today.

Research, Tools, & Features

Fidelity’s investment platform is a little like a Swiss Army knife – a whole toolbox in your pocket. It’s brimming with research tools, investment calculators, and educational resources, making it good for both beginners and experienced investors.

An example of this is Fidelity’s Navigator – a tool designed to help you select the best investments. You begin by choosing between income and growth, then continue by choosing how you would like your money managed.

A fund will be suggested, and you can access further information before deciding whether to place a buy order.

Vanguard also provides a range of educational contents and investment tools, but the emphasis is on straightforward, passive investment strategies. For example, its managed ISA service is designed to provide a hassle-free approach, with a range of managed funds to suit your risk appetite and time horizon.

If you find that a wider choice of investment assets makes things too complicated, Vanguard’s philosophy removes this complexity from the game. Its fund selection tool asks six questions to help it understand your risk appetite, and there’s a good pension calculator tool, too.

User Experience & Customer Service

Investing is a little like a road trip. It’s not just about the destination, it’s about the journey to get there – and factors like the user interface, ease of use, mobile app availability, and customer service options can make all the difference.

Fidelity

Fidelity’s platform is like driving a car with the latest technology on board. The user interface is highly intuitive – like having an onboard computer to guide you.

Whether you’re executing trades, exploring investment options, or checking on your portfolio’s performance, everything is at hand and easy to access.

Its mobile app is a powerful tool. Available for both iOS and Android, it will help you manage your investments on the go. It’s easy to use and functional, and information is presented clearly.

As a customer, you’ll also have access to a range of support options. These include online support, telephone assistance, and even the opportunity for face-to-face meetings at their Investor Centre in London.

On top of this, Fidelity also hosts regular webinars, which are great to learn more about investing and to ask questions in a live setting.

Vanguard

Vanguard’s website is functional and user-friendly, focusing on simplicity and ease of navigation. It’s much more no-frills than Fidelity’s platform, and aligned to its philosophy of keeping things straightforward.

Its customer service matches the robustness of its web offering – you have access to online and telephone-based assistance.

You won’t have the same level of face-to-face support and there are no webinars provided by Vanguard, but you do have access to a comprehensive suite of educational resources and FAQs on the website.

Something that has bugged Vanguard’s customers for a long time is its lack of a mobile app.

However, Vanguard has listened to these views and in February 2024 announced it is in the process of testing its UK Personal Investor Platform, with the aim of rolling it out later this year.

Fees & Charges

Fees and charges can be almost as damaging to your wealth as the taxman. Over time, they eat away at your returns. Although an annual management charge may seem small, it can make a big difference.

Thanks to compounding, even a 0.2% difference in fees will lead to a significant shortfall between two funds that both deliver, say, 5% per annum growth over 20 or 30 years.

Here’s how the fee and charges of both Fidelity and Vanguard compare:

Fidelity

Platform Fee

Fidelity charges a service fee that ranges from 0.35% on investments up to £250,000, reducing to 0.20% for investments between £250,000 and £1 million, with no charge on the portion of investments over £1 million.

The same fee is charged across your entire portfolio. The maximum fee that you will pay for a portfolio of more than £1 million is £2,000 a year.

Fund Fees

The cost varies depending on the specific funds you choose, and starts at 0.05%. Fidelity’s platform offers a wide range of funds, including some negotiated discounts on ongoing charges, potentially lowering your costs.

You may also have to pay a bid-offer spread, a performance fee, and a fund manager buy/sell charge.

Additional Charges

When you execute buy and sell orders, you’ll pay:

• £1.50 for deals as part of a regular savings or withdrawal plan, or for a reinvestment of income or a dividend.
• A simple charge of £7.50 for each deal placed online.
• £30 per trade placed over the phone.

Vanguard

Platform Fee

Vanguard’s platform fee stands at a straightforward 0.15% across all account sizes, capped at £375 annually. So, you’ll never pay more than £375 a year in platform fees.

Fund Fees

There’s no hassle here – Vanguard is known for its low-cost funds, and it claims an average ongoing costs of 0.20%.

Additional Charges

Vanguard does not charge for trading its funds. However, real-time trades with ETFs will be subject to a bid/offer spread.

Minimum Investment

Here is something else that differentiates Fidelity from Vanguard – how much you must invest.

With Fidelity, you can start investing with a lump sum of £1,000 or a monthly investment of £25.

Vanguard’s entry point is £500 as a lump sum or £100 monthly.

Are Fidelity & Vanguard Safe to Use?

Of course, whenever you invest your capital is at risk – markets can go down as well as up, right? But you don’t want to compound this risk with platform or regulatory risk.

Good news – both Fidelity and Vanguard protect your money and your personal data.

Both firms are regulated by the Financial Conduct Authority – the body that is responsible for maintaining the highest possible standard in the financial services industry. Being registered with the FCA means that Fidelity and Vanguard comply with strict standards set out for the protection of investors.

Both are also covered by the Financial Services Compensation Scheme (FSCS). This is a bit like having insurance for the funds you hold with them.

Up to £85,000 of your investments and cash held with either firm is protected against company failure or financial difficulties – though not against the ups and downs of the market.

On top of this, Fidelity and Vanguard apply security measures to help protect your accounts and personal information from being stolen or used maliciously. These measures include advanced encryption technologies to safeguard data transmission between investors and their platforms, and extra security measures when accessing and using your account (such as two-factor authentication).

Fidelity Vs Vanguard: Key Advantages & Disadvantages

Deciding between Fidelity and Vanguard as your investment platform may boil down to assessing the key pros and cons of each.

Understanding the strengths and weaknesses of each platform can help you match the platform with your investment goals and preferences.

Fidelity Pros & Cons

Pros

• Wide range of investment options, from mutual funds to stocks and ETFs which could help you take advantage of market movements and develop a portfolio that is diversified across geographies, asset classes, and economic/industry sectors.
• In-person services, which are great if you prefer face-to-face interaction. You’ll have the opportunity for personal consultations, as well as to participate in webinars. This could be the personal touch that helps you to make more tailored investment choices.

Cons

• Higher fees for some services. The level of personalised services comes at a price. When you compare Fidelity’s charges with Vanguard’s straightforward fee structure, Fidelity’s fees can be higher.
• Complexity for beginners. With such a wide array of options and services, if you’re new to investing you could find things a little overwhelming.

Vanguard Pros & Cons

Pros

• Low fees are the hallmark of Vanguard’s philosophy. Its fees are among the lowest in the financial markets, and are especially appealing to long-term investors.
• The focus on passive investing through its range of index funds and ETFs is ideal if you want to employ the kind of ‘set-and-forget’ strategy that has made investors like Warren Buffett very wealthy.

Cons

• Limited investment options. Unlike Fidelity, Vanguard offers a more limited selection of investment products, primarily focusing on its own range of funds. This might not suit you if you plan to use a more diverse or active investment approach.
• No in-person services are offered byVanguard. If you would benefit from face-to-face meetings or personal investment consultations, this lack of personal service would be a downside.

Tips For Choosing The Best Investment Platform For You

Choosing a suitable investment platform is a crucial decision in your investment journey. Here are seven tips to help you decide between Fidelity and Vanguard, and how to use your preferred platform effectively.

1. Define Your Investment Goals

Why are you investing? Is it a longer-term goal like retirement planning, or a medium-term objective like paying for your children’s education or saving for a home?

2. Consider Your Investment Style

Do you prefer to make your own investment decisions and take a hands-on approach, or would you prefer a more passive investment strategy?

Do you want more personalised advice, or are you happier to let your investment strategy be determined by an objectives and risk questionnaire?

3. Evaluate Fees & Charges

Understand the fee structure of each platform, and match these to your goals and investment style. Vanguard is known for its low fees, which can significantly impact your long-term returns.

On the other hand, the higher fees charged by Fidelity help to deliver more services and options.

4. Assess The Range Of Investment Options

If you value a broad selection of investment choices, including international markets, Fidelity might be more appealing.

If you prefer a straightforward, focused approach, Vanguard’s curated selection might be more to your liking.

5. Review Platform Tools & Resources

Both platforms offer educational resources and tools, but with a different focus. Fidelity offers a broader spectrum of analytical tools and educational content.

6. Start Small, Invest Regularly, & Diversify

When you have selected your preferred platform, start small, invest regularly, and look to diversify. This will allow you to become used to investing before committing larger sums, while simultaneously benefitting from pound/cost averaging (smoothing out market volatility).

Both Fidelity and Vanguard allow you to diversify your portfolio, albeit in different ways.

7. Review Your Portfolio Regularly

Life changes. So do financial markets. At least once a year, take stock of where you are at, and how the markets are moving.

This will help you to use the tools provided by Fidelity and Vanguard to rebalance your portfolio so that it remains aligned to your evolving financial goals.

The Verdict

While both Fidelity and Vanguard provide robust pathways to achieving your financial and investment goals, each has its unique features, advantages, and disadvantages.

The choice will come down to what you value most on your investment journey: the extensive choices and lower entry point of Fidelity, or the simplicity and slightly higher barrier to entry of Vanguard?

If you’re a newbie in the world of investing, Fidelity’s lower entry threshold of £25 will let you dip your toe in the water more cautiously. Together with user-friendly tools and diverse investment options, its broad range of educational resources make it an attractive proposition.

If your investment mindset is to ‘keep it simple’, then Vanguard could be the ideal choice. With a focus on low-cost, passive funds, it really is the epitome of hands-off investing.

For those who intend to trade more actively, making trade decisions based on research and market movements, Fidelity is more akin to your investment style with its comprehensive selection of assets and detailed analytical tools.

Whichever platform you decide on, you should always remember that markets can fall as well as rise. Your capital is at risk – which is why it’s crucial to diversify your investment and review your portfolio at regular intervals to ensure it is moving in the right direction.

Trading in cryptocurrencies may be classed as highly speculative, but it is also gaining in popularity. However, because they are classed as unregulated investments in the UK, it can be challenging to find a reputable broker who will facilitate trading and holding of cryptocurrencies.

Which is where platforms like Uphold fill the void. Is Uphold a good choice for your crypto trading? What are the pros and cons of the platform?

I’ve taken a deep dive into Uphold, uncovering all you need to know before you open an account.

What Is Uphold?

Launched in 2015, Uphold is a comprehensive financial platform offering a trading facility for cryptocurrencies, commodities, and FX.

If you want to trade cryptos like Bitcoin and Ethereum (as well as a host of smaller digital currencies) or traditional fiat currencies, or gold and silver, Uphold will help you diversify your investment portfolio beyond the conventional.

From a vision of bridging the gap between old-world financial systems to new-world investment opportunities, Uphold has developed into a financial platform with more than 10 million users in more than 150 countries around the world.

Uphold’s Unique Selling Points

So, what is it that sets Uphold apart in the crowded market of financial platforms? You might think it’s the breadth of assets available to trade on the system.

While this is indeed a plus, if you dig a little deeper, you’ll find distinguishing features include its support of multiple assets and something that could just usher in financial integration between crypto and fiat – the Uphold Card.

Multi-Asset Support

Most other crypto-trading platforms only offer crypto currencies. Uphold gives you much more, by giving access to precious metals and fiat currencies.

You’ll have a choice of more than 250 cryptocurrencies – including major coins, altcoins, emerging tokens, and stablecoins. In addition, you can trade in gold, silver, platinum, and palladium, as well as currencies (including, of course, dollars, pounds, and euros).

This range of assets is great for diversification, as well as giving you the ability to hedge against crypto volatility or take advantage of movements in the commodity market.

The Uphold Card

Here’s an amazing USP – a card that closes the gap between your digital coins and everyday spending.

The Uphold Card is a debit card that lets you use your cryptocurrency and other holdings just as you would the pounds in your bank account.

You simply present your Uphold Card for payment, and your digital assets are converted automatically behind the scenes to real-world currency to spend. Yep, no more messing around with multiple transactions to use your digital currencies like cash!

Uphold Pros & Cons

I wish that there was a single financial platform that did everything I need it to, but there isn’t. They all have their strengths and weaknesses, and Uphold is no exception.

Here are what I consider to be the advantages and disadvantages of Uphold:

Pros

• First, while there are more than 3,000 cryptocurrencies available now, the range of cryptos on Uphold offers a good selection that should be sufficient for most avid crypto investors.
• I also like the fact that you can trade precious metals and fiat currencies on the system – that’s great to diversify your portfolio, as well as gaining exposure to more speculative trades.
• It’s easy to set up an account, too (more about this later) and, as I’ve already mentioned, you’ll love the Uphold Card.
• Then there’s the ability to benefit from crypto staking – putting your cryptocurrency to work to earn a commission of between 1% and 13%.

Cons

Now, to the things that I find least appealing about the platform:

• First on the list (which, to be fair, isn’t long) is that it doesn’t offer many advanced trading features. You’re not going to find sophisticated charting tools, and neither will you be able to post more complex orders. This said, it is certainly functional – just not very appealing if you want more in-depth analysis and greater trading capability.
• You could also find that the variable spreads* can be confusing. Worse, they could result in higher fees than you might pay on other crypto platforms.
• Its method of charging also means there are no discounts on fees, no matter how many trades and what volume you trade.

*Variable spreads – the difference between buying and selling prices.

How Does Uphold Work?

Uphold is both a trading platform and digital wallet: you can buy, sell, and store assets easily. Here’s a breakdown of how the system works:

Set up your account

Setting up an Uphold account is a straightforward process. You only need to input some basic personal details and verify your ID. Within minutes you could have your account ready to trade.

Fund your account

The next step is to fund your account. There are several ways to do this, though the most popular are using a credit or debit card or by direct bank transfer.

Trade!

Your account is open and funded. You are now ready to trade in any of the assets offered on the platform. Buy the cryptocurrency you want to invest in, with just a few clicks.

Exchanging assets

With many trading platforms, if you want to switch from one asset to another (Ethereum to silver, perhaps, or Bitcoin to gold), you will first need to sell one asset, convert your currency, and then buy your preferred asset.

On the Uphold platform, you can simply do an asset exchange using its one-step conversion feature. This makes rebalancing your portfolio or moving from one asset to another super easy.

Stake cryptocurrency

Why hold your cryptocurrency and rely only on a rising price to make money on your holding? By staking eligible cryptos, you can earn interest, too. Depending on the crypto staked, this could be as high as 13%.

Now, this is as safe as the interest you would earn on money held in a bank account, but it is a valuable incentive to encourage you to hold your cryptocurrency within Uphold.

Use your Uphold Card

Just as you would use your high street bank’s debit card, you can use your Uphold card, spending your cryptocurrencies, precious metals, of fiat currency anywhere you can use a Mastercard.

No hassle, no fuss. Just swipe and spend, and all the conversion is taken care of for you.

How Good is the Uphold Trading Platform?

I’ve had a lot of experience with trading platforms, from helping to develop them to using them myself. One thing I can say is that if a platform is too complex to use, you’ll not only lose interest very quickly, but its complexity could also cost you money.

In short, no matter how good the rest of the offer is, if a platform is not user friendly it’s not a platform you should be using.

More good news here, because Uphold delivers ease of use with functional performance whether you’re new to cryptos or a seasoned investor.

I like the simplicity of its design. It’s been developed around the user, which is particularly good for novice traders.

The interface is clean and intuitive – you won’t have any challenges to navigate between the different functions, and you’ll soon be buying and selling with confidence.

However, while this trading and navigational function is a clear advantage for all levels of investment experience, if you’re a more advanced investor, you could find the lack of advanced analytical and trading tools a disadvantage.

Sure, straightforward buy and sell orders are easily executed; but if you want to execute a more advanced trading strategy using more complex order inputs, Uphold will leave you a little disappointed.

If you want to trade while you’re on the go, overall, you’ll be very happy with Uphold. All the platform’s features are available at your fingertips, providing you have internet connection.

Available on both iOS and Android devices, the app is every bit as user friendly as the desktop design. Again, I think this is great – it’s an unnecessary pain in the backside to have to relearn how a platform works because the developers have, quite frankly, been too lazy to ensure a seamless transition between desktop and smartphone.

This said, while the mobile app has received a heap of praise from users on Google Play and the App Store – especially for its user friendliness and reliability – it does still have its downfalls, with criticism centring around responsiveness during busy periods.

How Much Does Uphold Cost?

When you’re investing or trading, it’s crucial that you consider your costs. High fees and commissions can crush any profits that your excellent investment choices produce.

Uphold doesn’t charge commissions on trades. While this sounds like fantastic news, don’t be too overjoyed. Instead of commissions, it loads the spread – that’s the difference between buying and selling prices.

What is a spread fee model?

Thankfully, Uphold’s spread fee model is pretty easy to understand.

Instead of paying a fixed commission on your trades, the Uphold platform adds a spread to the buy or sell prices. What this means is that the cost of trading is built into the price of the asset.

Because of this, it’s crucial to understand how these fees work (and how they affect your trades) before you place orders.

Personally, I prefer the spread fee model. I like the simplicity of knowing the exact price at which I break even and move into profit, without having to allow for trading commissions.

I also find that trading with a spread and no commission can deliver lower costs. You may feel like me or, on the other hand, you may prefer predictable fixed commissions.

Uphold fees are typically:

• Stablecoins and major market FX: 0.25%
• BTC, ETH: 1.4% – 1.6%
• Altcoins: 1.9% – 2.5%
• Precious Metals: 1.9% – 2.5%

There are two things that I think you should also understand about the spread fee model.

The first is that spreads are affected by liquidity. The less liquid an asset is (lower volumes of trade), the wider the spread is likely to be.

Second, in volatile markets, spreads are likely to be wider. It’s not entirely uncommon for spreads to be more than 4%. This said, should this happen, Uphold puts a flag on the platform to help you decide whether to execute an order or not.

There are also other costs to be wary of:

• To deposit cash into your account by a debit or credit card, you’ll be charged 3.99%
• To withdraw on a debit card will cost 1.75%

It’s easy to avoid these extortionate deposit and withdrawal fees – simply use bank transfer.

Costs – Uphold Vs Coinbase

It’s worth looking at how costs to trade through Uphold stack up against the gorilla in the crypto exchange market, Coinbase.

If you’re using a credit or debit card to fund your trading, you’ll be paying around the same fees (3.99%), and both platforms charge network fees for crypto withdrawals, too.

It’s on the spreads and trading commissions where you’ll notice the difference. For example, while the Uphold spread on Bitcoin is around 1.5%, it is only 0.5% when trading on Coinbase.

But this doesn’t mean it’s cheaper to trade on Coinbase, because you’ll also pay a per-trade commission of up to 1.49%.

This could mean that Uphold is much more cost-effective for traders and investors, but you’ll need to consider your trading patterns and volumes to make a personalised comparison.

The Uphold Card

The Uphold Card is a debit card that lets you use your cryptocurrencies as ‘spending money’.

You can use your Uphold Card exactly as you would your bank debit card – to withdraw cash from an ATM, or buy goods or services from a shop, restaurant, hotel, or online retailer.

You can also use your Uphold Card abroad without incurring foreign transaction fees. You’ll receive an instant notification of your card spending to your Uphold app, too, making tracking transactions easy.

It’s like your cryptocurrencies are real money! There’s a rewards feature, too: 1% cashback on card purchases funded by a national currency balance.

One thing I don’t like about this card is that you’ll be charged £2.50 for an ATM cash withdrawal in the UK, and £3.50 for ATM cash withdrawals abroad.

Customer Support

In the big scheme of things, the cryptocurrency market is very new. It’s continuing to grow rapidly and can be very volatile.

Customer support is crucial, and Uphold’s approach recognises this. There are multiple channels to access assistance, from its online support centre to its social media. Whatever way you prefer to receive help, Uphold offers it.

Its Support Centre is a comprehensive resource, with a huge number of articles, guides, and FAQs. It’s where you’ll find helpful content that walks you through a range of topics, from account set-up to trading and security.

It’s your first port of call for help. It’s easy to navigate and contains the answers to most questions you might need to ask.

If you have a more complex query or issue, your next option is to use Uphold’s contact form. Submitted questions are usually answered within 24 hours, which is typically useful for issues related to technical or account issues.

Uphold are also active on social media, and you can reach out for support on platforms like X (formerly Twitter). Often this is a quicker way to get in touch, though I’d recommend that you only go this route for general questions, and not if you need detailed help.

Feedback about customer support is mixed, reflecting the different experiences of users. Positive reviews include comments on the helpfulness of the support articles and the responsiveness of the support team via the contact form. On the other hand, some users have reported poor response times during peak periods.

Overall, while there is room for improvement, I think you’ll find customer support is more than adequate.

Is Uphold Safe To Use?

If it’s not safe to use, it doesn’t matter about user experience, access to assets, and low costs to trade. You don’t want to load investment risk with platform risk.

The first thing to say is that Uphold is regulated by the Financial Conduct Authority (FCA). It complies with anti-money laundering (AML) rules, Know Your Customer (KYC) regulations, and data protection regulations like the EU’s General Data Protection Regulation (GDPR).

In addition to all of this, Uphold also helps to protect you with:

• Two-Factor Authentication (2FA), requiring you to verify your identity through a secondary app (like you do when making bank transactions)
• Encryption of data during transmission, helping to protect your data from being hacked
• Cold storage of cryptocurrencies, offline and away from the threat of being hacked

In summary, while the digital finance sector is prone to security challenges, Uphold is dedicated to providing a safe and secure trading environment for its range of assets.

How do You Open an Uphold Account?

Opening an Uphold account couldn’t be easier. Start by visiting the Uphold website, and then:

• Click on the ‘Sign Up’ button in the top right corner.
• Enter your email address and create a password.
• Provide your basic personal information (name, address, country of residence, etc.).
• Verify your identity with a photo ID and proof of address (you may have to take a selfie, too).
• Link a funding source – for example, your bank account.
• Enable two-factor authentication for extra security.
• Start trading.

Yes, opening an Uphold account really is this easy!

7 Tips to Get the Best Out of Uphold

You’ve opened an account, and you’re raring to get started with your first trades. Woah! Hold your horses. Here are my tips to help you use Uphold successfully:

1. Keep Your Account Secure

For all its inbuilt safety features, there are simple security measures you should take to protect your portfolio from unauthorised access. For example, update your password regularly, and never use the same password across multiple apps.

2.  Engage With the Uphold Community

Listen to what other Uphold users are saying on social media. You’ll get a lot of tips about trading strategies, and learn a lot from the experiences of others.

3. Plan Your Trades

Don’t get carried away on the platform. Every trade you execute should align with your financial goals and long-term investment strategy. Remember, if you don’t have a plan to succeed, then you are planning to fail.

4. Check the Spreads

Spreads can be volatile, so always check the spread before executing an order to make sure you are not overpaying.

5. Diversify Your Portfolio

Cryptos are high-risk/high-reward assets. As with all investments, by diversifying your portfolio you will reduce risk. So don’t put all your eggs in one basket.

Instead, consider investing in fiat currencies and precious metals as well as cryptos on the Uphold platform.

6. Take Advantage of Staking

Cryptocurrencies don’t pay interest or dividends in the same way that other securities do. But by using the staking feature, you can earn interest from eligible crypto holdings. Don’t ignore this passive income.

7. Use The Uphold Card

Make purchases from crypto holdings, and integrate your traditional finances with your digital wallet.

By following these tips, you can navigate Uphold more effectively, making informed decisions that align with your financial goals. Whether you’re a seasoned trader or new to the world of digital finance, these strategies can help you get the most out of what Uphold has to offer.

A Fly in the Ointment?

There is a class action lawsuit in process against Uphold. This was filed in July 2022, and is ongoing today.

Some allege that cryptocurrency was stolen from them because of Uphold’s negligence, and others that customer service has ignored them when wishing to discuss stolen crypto funds.

In August 2023, a district court trimmed back damage claims, but said the class action could continue all the same.

Alternatives To Uphold

Whatever your investment approach is, I would always encourage you to do your research and compare options before committing. Choosing a platform for your cryptocurrency trading is no different.

Here are a few trading platforms you might also consider for crypto investment:

Coinbase

A leading crypto exchange, Coinbase offers a huge range of cryptocurrencies to trade. With a user-friendly interface, this crypto exchange is a popular choice among crypto investors.

Binance

Binance includes a comprehensive range of trading tools and features that will appeal to you if you are an experienced crypto trader. You’ll find the advanced charting options and competitive fee structure a delight.

eToro

eToro is among our pick of the best investment apps (UK). Great for beginners and ‘social traders’, you’ll learn a lot from the sharing of trading strategies.

As well as cryptos, eToro also offers trading access to stocks, commodities, and forex, making it a good platform if you want to diversify your investments beyond cryptos.

Kraken

Whether new to trading or an experienced crypto investor, you’ll like Kraken’s strong security features and access to a wide range of cryptocurrencies. You’ll be able to trade with a variety of options, including spot and futures trading, and benefit from comprehensive market insights.

Final Thoughts

Uphold’s access to multiple assets, wide range of cryptos, and innovative Uphold Card make it an attractive option.

It’s simple to use, and ideal for beginners who are looking to invest in crypto and manage their portfolio easily. If you want to integrate your traditional spending with digital assets, then Uphold will also appeal to you.

All this said, if you are a more experienced crypto trader and want advanced analytical and trading tools, Uphold may not be all you need.

Of course, when considering which crypto platform to use, you should always consider your trading preferences and investment goals, and explore alternatives to ensure you have the best fit for your investment journey.