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UK Platform Fees: The Hidden Layers

Platform fee, fund fee, FX fee, dealing fee, exit fee. Here's what each actually costs.

Most UK investors look at one number — the platform's headline fee — and assume that's the cost. It isn't. There are typically five separate fees, and depending on what you hold and how you trade, the cheapest “headline” platform can be the most expensive overall.

1. Platform fee (the custody fee)

What you pay the platform to hold your investments. Two pricing models:

• Percentage-based (HL 0.45%, AJ Bell 0.25%, Fidelity 0.35%) — cheap when you're small, painful when your pot grows. A 0.45% fee on £200k is £900/year.

• Flat fee (Interactive Investor £4.99–11.99/mo, iWeb £5/trade no platform fee) — bad value below £30k, exceptional above £100k.

• Free (Trading 212, InvestEngine for ETFs) — usually free because they earn elsewhere (FX spread, securities lending).

2. Fund / ETF fee (OCF or TER)

The annual cost of the fund itself, deducted from the fund's NAV. You never see it as a transaction — it's silently subtracted from your returns. Typical ranges:

• Index trackers: 0.05–0.25%

• Active equity funds: 0.50–1.00%

• Specialist or thematic ETFs: 0.30–0.75%

This sits on top of the platform fee. A 0.45% platform + 0.22% fund = 0.67% all-in.

3. FX fee — the silent killer

If you buy US-listed ETFs (like VOO, VTI, QQQ) in GBP, your platform converts your money to USD. The spread they take is the FX fee. Common rates:

• Hargreaves Lansdown: up to 1% on small trades

• AJ Bell: 0.50–1% (tiered)

• Interactive Investor: 1.50% standard, 0.25–0.99% tiered

• Trading 212: 0.15%

• Freetrade: 0.45–0.99%

FX fees are charged on every buy and sell — so an active trader pays them constantly. The fix: buy LSE-listed GBP ETFs (e.g. VUSA, VWRP) instead of US-listed ones. Same exposure, no FX.

4. Dealing fee (per trade)

Charged when you buy or sell shares/ETFs. Funds (OEICs/Unit Trusts) are usually free to trade.

• HL: £11.95/trade (£8.95 if active, £5.95 if very active)

• AJ Bell: £5/trade for shares/ETFs, free for funds

• Interactive Investor: £3.99/trade

• iWeb: £5/trade flat

• Trading 212, InvestEngine, Freetrade: £0

5. Exit / transfer fee

Charged to move your account elsewhere. UK regulators have pushed most platforms to scrap these — but check before you commit:

• HL: £25/holding to transfer out (capped £125)

• AJ Bell: free

• Interactive Investor: free

• Trading 212: free

The all-in test

Add platform + fund fee + (FX × turnover) + (dealing × trades). For a £100k buy-and-hold portfolio in a global ETF: HL ≈ 0.67%, II ≈ 0.34%, Trading 212 ≈ 0.22%. Over 20 years at 7% growth, the difference compounds to £40k+.

Which platform for which investor

Under £20k

Trading 212 or InvestEngine. Free everything; no minimum.

£20k–£100k

AJ Bell (0.25% capped), Trading 212, or Vanguard (0.15% but only Vanguard funds).

£100k+

Switch to a flat-fee platform. Interactive Investor (£11.99/mo unlimited) or iWeb (£5/trade, no annual fee). The break-even vs 0.25% is around £60k.

Active trader

Trading 212 (free trades, 0.15% FX) or Interactive Investor (free monthly trades + cheap dealing).

Use our fund fee impact calculator to see the long-term effect of any fee difference, and the broker comparison for full feature breakdowns.

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