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It’s Isa season and consumer finance experts are encouraging savers and retail investors to use up their tax allowances before they reset at the end of the tax year on April 5.
Investment platforms have reported a wave of money going into Isa products since the start of 2025, as UK consumers get to grips with inheritance tax changes laid out in last year’s Budget, and respond to growing speculation over the future of the cash Isa, which allows savers to put away up to £20,000 a year tax free.
In recent weeks, some City firms have lobbied the chancellor to reduce the benefits of the popular cash savings wrapper compared with the stocks-and-shares Isa, to boost investment in UK companies.
But if you are looking to put money into Isas before the deadline next month, which are the best products available?
Cash Isas
Those looking for the right cash Isa are currently spoilt for choice, with a record number of products on the market.
Savings rates — which have risen in recent years, as interest rates have increased from historic lows — have started to fall since the Bank of England started cutting the base rate in August last year. But there are still plenty of cash Isa products offering rates offering 4 per cent or more.
As of Friday, Chip, Moneybox, Plum and Monument Bank offered variable-rate cash Isas that paid more than 4.75 per cent — beating the highest rate available on non-Isa easy-access savings accounts, according to financial data provider Moneyfacts.
Savers using variable-rate products should, however, be aware that some providers will offer a high introductory rate to entice consumers before reverting to a lower rate later on.
Stocks-and-shares Isas
Investors need to pay careful attention to the fees charged by platforms that offer stocks-and-shares Isas, which can have a big impact on returns. If you are unhappy with your current provider, you can transfer your Isa to another platform without eating into your £20,000 annual limit, though exit fees can apply.
Costs vary from platform to platform, but most providers charge users a periodic fee for holding investments — typically a percentage of the value of assets held.
There is no one-size-fits-all “best” platform and the decision of which to pick depends on a range of factors, such as the total portfolio value, types of assets held and the regularity with which an investor trades.
Hargreaves Lansdown, the UK’s largest DIY investment platform, levies 0.45 per cent on stocks-and-shares Isas holding up to £250,000 in investment funds, with charges falling to zero for portfolios valued over £2mn. Other assets such as shares, investment trusts, exchange-traded funds and bonds receive a flat 0.45 per cent charge, capped at £45 per year.
Investors holding more than £25,000 might compare fees with a platform that offers a fixed monthly fee, such as Interactive Investor, where charges begin at £4.99 and rise to £11.99 for those investing more than £50,000.
One way to minimise fees is to consolidate Isa holdings on to a single platform, taking advantage of the lower charges for larger holdings.
In addition to platform fees, the majority of providers also charge a fee for each trade — known as a “dealing charge” — which can drag down the returns of those who buy and sell their shares regularly. Platforms such as Trading 212 do not charge for trades, but make their money from other revenue streams, such as currency conversion fees and share lending.
