Best ISA Platforms UK 2026: Flat Fee vs Percentage Fee — The Exact Maths for Every Portfolio Size

Platform fees are the one investment cost entirely within your control. With the Bank of England base rate holding at 4.50% as of March 2026, interest on cash holdings varies by provider — but the platform fee is the constant drag on returns. Fund charges (the OCF) are set by the fund manager; dealing costs are small for buy-and-hold investors. But the annual platform fee compounds relentlessly against you — and the structure varies dramatically between providers.

Percentage-fee platforms:

• Vanguard Investor: Under £32,000: £4/month flat fee (£48/year). Above £32,000: 0.15%/year, capped at £375. This dual structure is new — smaller portfolios now pay a flat rate instead of a tiny percentage. On a £50,000 portfolio, you pay £75/year. At £250,000, the cap means you pay £375 regardless.
• Fidelity: 0.35%/year on the first £250,000, dropping to 0.20% above £250,000, capped at £2,000/year. Under £25,000 without a regular savings plan: flat £90/year instead. On a £50,000 portfolio: £175/year.
• AJ Bell: 0.25%/year on the first £250,000, dropping to 0.10% between £250,000 and £500,000, free above £500,000 for funds. For shares and ETFs: 0.25% capped at £3.50/month (£42/year). On a £50,000 fund portfolio: £125/year.
• Hargreaves Lansdown: 0.45% on the first £250,000, dropping to 0.25% between £250,000 and £1 million. At £50,000: £225/year — the most expensive percentage-fee option.

Flat-fee platforms:

• Interactive Investor: £5.99/month (£71.88/year) on the Investor plan. This covers portfolios up to any size — the Plus plan at £14.99/month adds lower trading and FX costs but the platform fee works the same way. Free regular investing on all plans.
• InvestEngine: £0 for self-directed ETF portfolios. No platform fee, no trading fee. The business model relies on managed portfolio customers and interest on uninvested cash.

The crossover point is where a flat-fee platform becomes cheaper than a percentage-fee one. Divide the annual flat fee by the percentage rate.

Vanguard's new dual structure complicates the comparison. Below £32,000, Vanguard charges £48/year flat — already cheaper than ii's £71.88. The interesting comparison starts above £32,000 where Vanguard switches to 0.15%.

Interactive Investor (£71.88/year) vs each percentage-fee platform:

• vs Vanguard (0.15% above £32k): £71.88 ÷ 0.0015 = £47,920. Below this, Vanguard is cheaper. Above it, ii wins. But below £32,000, Vanguard's £48/year flat fee beats ii's £71.88 anyway — Vanguard is cheaper at both ends for small portfolios.
• vs AJ Bell (0.25%): £71.88 ÷ 0.0025 = £28,752. ii becomes cheaper above roughly £29,000.
• vs Fidelity (0.35%): £71.88 ÷ 0.0035 = £20,537. Fidelity is only cheaper below about £20,500.
• vs Hargreaves Lansdown (0.45%): £71.88 ÷ 0.0045 = £15,973. ii beats HL from just £16,000 upwards.

The pattern is consistent: once your portfolio exceeds £25,000–£50,000, flat fees deliver better value. And InvestEngine at £0 beats everything at every portfolio size — if you're happy restricting yourself to ETFs.

The Vanguard sweet spot: Vanguard's structure creates an unusual advantage for portfolios between £32,000 and £48,000. In this range, Vanguard's 0.15% rate is cheaper than both ii's flat fee and the other percentage platforms. Below £32,000, Vanguard's £48/year flat fee is the cheapest option after InvestEngine.

Annual fee differences look modest in isolation. Over two decades of compounding, they become significant. Assume a starting portfolio of £50,000, annual contributions of £10,000, and 7% nominal growth before fees.

After 20 years, total platform fees paid:

• InvestEngine (0%): £0. Final portfolio: approximately £637,000.
• Interactive Investor (flat): approximately £1,440 total. Final portfolio: approximately £635,500.
• Vanguard (0.15%, capped): approximately £5,400 total. Final portfolio: approximately £631,500.
• AJ Bell (0.25%): approximately £9,200 total. Final portfolio: approximately £627,800.
• Fidelity (0.35%): approximately £12,800 total. Final portfolio: approximately £624,200.
• Hargreaves Lansdown (0.45%): approximately £16,400 total. Final portfolio: approximately £620,600.

The gap between InvestEngine and Hargreaves Lansdown over 20 years: roughly £16,400 in direct fees. That's nearly a full year's ISA allowance — gone to platform costs.

Even the spread between Vanguard and Fidelity — a seemingly trivial 0.20 percentage-point difference — compounds into roughly £7,400 over two decades. Every pound saved on platform charges compounds free of income tax and capital gains tax inside the ISA wrapper indefinitely. For a comparison of cash alternatives, see our savings hub.

Flat fees aren't universally superior. Three scenarios favour percentage-fee platforms:

Small portfolios (under £25,000). A beginner with £5,000 pays just £48/year at Vanguard's new flat rate — and that covers the full platform. Interactive Investor's £71.88/year minimum would be 1.44% of a £5,000 portfolio. For newer investors building an investing habit, percentage fees (or Vanguard's small-portfolio flat fee) are the rational choice.

Investors who want managed funds, not just ETFs. InvestEngine's zero-fee offer only covers self-directed ETF portfolios. If you want access to actively managed UK funds, investment trusts, or individual shares, you need a platform that charges for that breadth. Fidelity's 0.35% buys access to thousands of funds with no trading fees on regular investments.

Uncertain commitment. If you might consolidate accounts or change strategy within a year or two, percentage fees mean you only pay proportionally to what you hold. Flat fees hit harder on declining balances. The MoneyHelper guide to investment fees explains the different charge types in detail.

The tipping point remains consistent: somewhere between £25,000 and £50,000, flat-fee platforms take the lead. If your ISA portfolio is heading in that direction — which it will after two to three years of maxing the £20,000 allowance — plan the switch early.

Moving to a cheaper platform doesn't mean losing your ISA tax wrapper. An ISA transfer keeps your entire allowance history intact — you never lose the tax-free status of previous years' contributions.

The process:

1. Open an ISA with the new provider and request a transfer (not a withdrawal). Withdrawing and re-depositing would use up your current year's £20,000 allowance.
2. Choose full or partial transfer. Current-year contributions must transfer in full to a single provider.
3. Allow 15–30 working days. The FCA requires providers to complete cash transfers within 15 working days. In-specie transfers (keeping existing investments) take longer but avoid selling and rebuying.
4. Check exit fees. Most platforms charge nothing to transfer out — Interactive Investor, Hargreaves Lansdown, and AJ Bell all have zero exit fees. Always verify before initiating.

The annual ISA allowance resets on 6 April each year. If you're transferring near the tax year boundary, complete it before 5 April or wait until after 6 April to avoid overlap confusion.

For more on the transfer process, see our ISA transfer guide. The same transfer principle applies to pension transfers between SIPPs. For related fee analysis, see our Freetrade subscription tier breakdown and AJ Bell fee analysis.

This article is for informational purposes only and does not constitute financial advice. You should seek independent financial advice before making any investment decisions.