Is Lightyear good for beginners?

Yep. That’s if you’re looking to make your own decisions around which investments you want to make, for instance, trade stocks and shares, and other investments.

If you are looking for experts to manage your investments for you, and grow your money over the long term, Lightyear probably isn’t for you. For this, we recommend an expert-managed investment platform, such as Moneyfarm¹, who will handle everything, you simply add your cash. Here’s our Moneyfarm review to learn more.

If you’re new to stock trading, and keen to buy and sell investments yourself, with you making all the decisions, well then it could be perfect for you.

You can get started with as little as £1, and because there’s no fees, in theory you can grow your money a bit faster than platforms with much higher trading fees like Hargreaves Lansdown. Especially if your budget is low.

But even more useful, when you’re looking at companies to trade, you’ll actually get a lot of information about the company or investment too, all within the app – and this can be super handy to make better informed decisions.

You can check out the market cap (total value) of a business, the earnings per share (how much it makes in profit for each share), and whether it pays dividends and at what rate (giving profits back to shareholders – the people that own the stocks).

Plus there’s analysts ratings – showing whether they think it’s a good buy or not, and the financial performance of the business too (for instance it’s profit per year). You can even see the latest news about the company.

This might all sound super complicated, but you’ll soon pick it up while browsing through companies you are interested in buying.

This is a pretty epic feature, it’s like having all the information you need to make investment decisions, all within the app, and all for free!

If this sounds all pretty interesting, you can download Lightyear¹, and check out everything before you need to deposit any cash.

Range of investments

Overall, the range of investments is good, and there’s a good range of both stocks and shares and ETFs (exchange-traded funds). 

Stocks and shares

There’s over 2,000 US stocks, and a range of the most popular companies in the UK, Europe, and even China.

So that’s companies like Tesla, Apple, Google, Alibaba, Baidu, large banks like HSBC, and even football clubs like Manchester United.

If you’re looking for big popular brands, and the most successful companies, Lightyear probably has it. If you’re looking for lots of UK companies, or much smaller companies, perhaps listed on the AIM (Alternative Investment Market) stock exchange, it’s likely they won’t have it.

For a wide range of smaller companies, particularly in the UK, it’s worth checking out AJ Bell¹. It's worth mentioning, new stocks and shares are added all the time to Lightyear.

Fractional shares

You can also trade fractional shares with Lightyear. This is where you buy a small portion of a single share (a fraction), and are perfect if you don’t have a large balance in your account and want to invest in a range of shares (some can have a very high value).

For instance, let’s say one Netflix share is worth $600, that’s quite a bit of cash to invest in a single company for most investors. 

Now with fractional shares, you can invest as much or as little as you like in Netflix, and you’ll receive the portion back in shares. So, if you invest $100, you’ll get ⅙ of a Netflix share. Make sense?

ETFs (exchange-traded funds)

There’s also an okay range of ETFs, also called exchange-traded funds. These are a collection of lots of different investments, for instance stocks and shares, all pooled together into one single investment – making it much easier and cheaper to buy – so very popular with investors.

On Lightyear, there’s currently just over 100 ETFs, and these cover all the most popular. 

There’s all the key index funds too – for instance, funds that track the top 100 companies in the UK (FTSE 100), or the top 500 companies in the US (S&P 500). And, ETFs that just focus on dividends (companies paying their profits to shareholders), or others focusing on property etc.

There’s a good enough range to build a well diversified portfolio for long-term investing. If you’re only looking to invest in ETFs, check out InvestEngine¹ – they only do ETFs and offer a great range, and it’s fee-free. Or check out the best ETF platforms for more options.

Multi-currency accounts

As with Lightyear you can trade in multiple currencies and buy stocks and shares from across the world, you can actually store multiple currencies within your account too.

Currently you can store: Pounds (GBP), Dollars (USD) and Euros (EUR).

You can also deposit and store money foreign money into your account. This means you could save on currency conversion fees (more on those below).

Account options

General Investment Account (GIA)

A General Investment Account is the only account you can open with Lightyear. It’s a no-frills account in terms of tax-free saving, but that’s okay as you’ll only pay tax if you earn a fair bit of profit per year (£12,300) – and only if you sell your investments.

Note: you can also only pay into one Stocks and Share ISA (more on those below), so, if you’ve got that with another company elsewhere with perhaps the experts looking after it (highly recommended), this is the account you’d use to buy individual shares anyway, wherever you were trading.

Note: if you do have to pay Capital Gains Tax, you’ll pay 10% if you earn less than £50,270 per year, and 20% if you earn more.

Note: you can have as many GIA’s as you like, on all the different investment platforms.

Stocks & Shares ISA

There’s not currently a Stocks & Shares ISA with Lightyear – although we’re told it’s coming soon.

A Stocks and Shares ISA is where you can invest completely tax-free, so you won’t pay any tax on your investments ever – that’s Capital Gains Tax, Income Tax and Dividend Tax. 

You have an ISA allowance of up to £20,000 per year to invest, and you can only pay into one per year.

If you’re new to investing, we highly recommend letting the experts manage your ISA, and build it up to a nice big pot over time – then you make your own investments within a General Investment Account (GIA). For an expert managed account, we recommend Moneyfarm¹ – they’re one of the best performing Stocks and Shares ISAs, have low fees and are super easy to use. 

If you only want to invest within a Stocks and Shares ISA, check out the best investment platforms for all your options.

Pension

Unfortunately there’s no self-invested personal pension (SIPP). Which have some great tax benefits for saving for the future. And you get a 25% bonus on all your contributions.

If you’re keen to invest within a pension, check out the best pension providers. Our favourite is PensionBee¹, they’re easy to use, have a great record and low fees. Here’s our PensionBee review to learn more.

Crypto

You can’t trade crypto unfortunately, if you want to trade crypto, check out the best crypto exchanges, and eToro¹ – they make trading super easy. Here’s our eToro review to learn more about them.

CFDs

You cannot trade CFDs (Contract For Differences), which is trading the price of the stock, rather than buying it directly. These are for advanced traders, but if you’re interested, check out the best CFD trading platforms to learn more.

Interest on cash

A pretty great feature with Lightyear is that you’ll earn interest on your cash balance, so even if your money isn’t invested, it’s still growing in your account. Pretty great right?

The interest rates are currently pretty high, although they are likely to change frequently so please double check on the Lightyear app¹.

Lightyear fees

It’s free! Well almost…

• there’s no fees to buy or sell stocks,
• no account fees,
• no set up fees,
• no deposit fees,
• no withdrawal fees

It's how trading should be! However, there is one fee you might pay, a currency conversion fee.

Currency conversion fee

The only fee you’ll pay is when you need to convert currencies, which you would do in order to buy foreign stocks such as US stocks or European stocks. This is called a currency conversion fee and is 0.35%.

So, if you converted £100 to Dollars, you’d pay £0.35 in fees, as simple as that.

Now that’s actually very cheap, if you compare currency exchange fees with other brokers and investment apps, here’s what you’d pay:

Most of these stock brokers also charge account fees (except Trading 212¹, eToro¹ and the free plan with Freetrade), and share dealing fees to buy and hold investments. Lightyear doesn’t charge any of these fees.

Customer support

The customer support is good overall.

There’s a great help centre on the website and app, which covers pretty much everything to do with your account, such as how to buy and sell investments, and things like dividends and taxes too.

If you don’t find what you’re looking for, you can also email support, and the response is pretty quick.

Unfortunately there’s no live chat (chatting on their app or website), although no stock broker offers this. And they don’t offer the ability to speak to anyone over the phone (traditional stock brokers are likely to offer this).

Is Lightyear safe?

Yep! Lightyear partners with an investment management company (RiskSave), and they are authorised and regulated in the UK by the Financial Conduct Authority (FCA). That means they've been reviewed and approved to look after your money. And it’s continually reviewed.

Lightyear are also authorised in the EU by EFS (Finantsinspektsioon).

Lightyear is not covered by the Financial Services Compensation Scheme (FSCS), which covers your money up to £85,000 if Lightyear were to go out of business.

However, your investments are not held with Lightyear, but with very large banks, all in your name, and can only be returned to you.

Plus, if you hold US stocks, you are protected up to $500,000 by the Securities Investor Protection Corporation. And with European stocks you are protected by the Estonian Investor Protection Sectoral Fund, which provides protection up to 20,000 euros.

Lightyear customer reviews

Customers love Lightyear. On the popular reviews website Trustpilot, it’s got a score of 4.7 out of 5. Not bad. In fact, it’s excellent! However, that's only from 300 reviews.

Most customers love how awesome the app is, and how easy it is to buy stocks and shares. Plus the analysis and extra information provided about each stock. And of course the commission-free trading!

Pros and cons of Lightyear

Here’s a run through of the pros and cons of Lightyear.

Pros

• Awesome mobile app
• Commission-free trading
• Very low cost overall
• Multi-currency account
• Great interest rate on cash

Cons

• Low range of UK stocks
• No Stocks & Shares ISA
• No personal pension
• No crypto trading
• No live-chat support

Our thoughts

We really like Lightyear. How can you not when it’s almost completely fee-free?!

The only fees you’ll pay are currency conversion fees when buying foreign stocks (e.g. US stocks), and it’s a pretty low fee for that (0.35%). You can also hold multiple currencies within your account too, so could avoid this altogether.

And if you’re new to trading and investing, it’s a great place to start and learn. It’s easy to use, and you’ll be able to buy the shares you’re after in no time. Plus, there’s a good amount of analysis for each stock too – so you’ll learn as you trade, and find new opportunities too.

The range of investments is good, and includes both stocks and shares and ETFs (exchange-traded funds) from across the world, with a big range of US stocks. However, you’ll find a bigger range of UK stocks with most other investment platforms.

A Stocks & Shares ISA isn’t available just yet, which is great for tax-free investing, so for this, and the limited range of UK stocks, we’re knocking them down a star.

Overall, it’s great. We’re giving it a solid 4 stars. If you’re keen to learn more or get started, here’s where to download Lightyear¹.