Lightyear, the (pretty epic) investment app has again lowered their fees to become one of the very cheapest in the UK and Europe (if not the very cheapest). They’ve lowered their foreign exchange fee to 0.10% and removed any trading fees within their General Investment Account (GIA). Their ISA already didn’t have any trading fees.
It was already low cost, but now the foreign exchange fee (FX fee) has been reduced from 0.35% to 0.10%. This is a fee when you buy shares and exchange-traded funds (ETFs) in another currency, for instance, buying US shares from the UK, sometimes called a currency conversion fee.
From our research, this is the lowest out there (in the UK). The crown was previously held by Trading 212, which has a fee of 0.15%. With other platforms this can be as high as 1% or more, and typically under 0.50% is considered low cost. Lightyear offering the low fee of 0.10% is ground breaking, and a huge benefit to those investing regularly, saving a potential small fortune.
If you’re a bit of an investment platform expert, you might be thinking InvestEngine doesn’t have any foreign exchange fees, and that’s true, but they don’t offer investments in currencies other than Pounds (GBP). So, there is no need for foreign exchange fees. They also don’t offer shares (ETFs only).
Nuts About Money tip: get a free share worth between £10 and £100 when you sign up¹ to Lightyear and use the promo code NUTSABOUTMONEY, as long as you deposit at least £100. The free share is a fractional share or ETF of your choice, and will be deposited into your general investment account with Lightyear. You must be a new customer and the bonus can be withdrawn after 6 months. Capital at risk. ISA rules and promotional terms apply.
On top of the lower FX fee, Lightyear is also removing the trading fees within their General Investment Account (GIA) to align it with their Stocks and Shares ISA. The GIA is an account you can use if you’ve already used your £20,000 ISA allowance within the tax year, or if you prefer not to use it, such as saving in an ISA elsewhere.
These were low anyway, and a small commission on each trade, but good news that they are now entirely removed, and both accounts are effectively exactly the same, except for tax differences - you may pay tax on profits within a GIA, but there’s no tax within an ISA. Tax treatment depends on individual circumstances.
Lightyear have completely rebuilt how they operate behind the scenes, both in the technology underpinning the trading and investing, but also operationally, where they are now directly trading on behalf of their customers, rather than using intermediaries (a middle man), and as a result cutting significant costs.
They are now a member of CREST (which is operated by Euroclear UK), which is a system to digitally register and hold shares and investments for customers (among other efficiency benefits).
This also means Lightyear can offer a much larger range of investments too, including lots more UK stocks. Exciting times right? We’re looking forward to seeing how Lightyear expands this range further.
Did you know Lightyear also offers a really great Cash ISA with a high rate and no gimmicks. It simply follows the Bank of England base rate, so moves up and down when the base rate does.
This means you always get one of the very best rates possible, and don’t have to worry about a bonus rate expiring or anything else. You can effectively save with Lightyear forever, without worrying about switching accounts to always be on the best rate.
Learn more about that on the Lightyear website¹.
Lightyear reducing their fees further is a huge deal, not just for Lightyear but for the whole industry of investment platforms and brokers. Being able to reduce fees to effectively just a small 0.10% foreign exchange fee, with no other fees (except fees within the investment themselves) is massive and may lead the way for other companies to follow suit in the long term - which ultimately benefits customers, as lower fees can compound over time to big savings.
Low fees are great, but alongside that is the range of investments, and the Lightyear app is excellent. Lightyear really is leading the way across all fronts. If you haven’t tried their app yet, please do, it really is super smooth and easy to use. You’ll soon be wondering why you ever used anything else.
Here’s where to get started¹ with Lightyear.
