First introduced in 1999, ISAs (Individual Savings Account) are a popular and tax-efficient way to invest for the future and add to personal investment portfolios. ISAs have become increasingly popular since the 2014 Budget when ISA regulations were changed to offer greater flexibility and bigger tax breaks.
So whilst ISAs can shelter savings and investments from tax, it is important to boost these savings through selecting the right account to minimise charges and commissions whilst ensuring the highest quality service.
With the dealing commission ranging from £5 to £20 per trade, there is plenty of room to save between different brokers. Priced at £20 per trade, Brewin Dolphin is one of the more expensive brokers, also charging 1.25% for the first £15,000 invested. Brewin Dolphin however does make all investment decisions on the clients’ behalf and offers regular valuation reports and an end of year tax schedule.
With a website less easy to navigate, The Share Centre might have a fairly inexpensive dealing commission at £7.50 for frequent traders, but the website spreads out additional charges making it difficult to total the annual charge at £128 plus VAT.
With similar dealing commissions, HSBC (£12.50 per trade) and TD Direct Invest (£12.95 per trade) offer very different annual charges, with HSBC charging 1.25%, with other expenses totalling approximately 0.8% and TD Direct Invest charging annual charges of 0.30% for funds up to £250,000 whilst also not charging to close accounts or transfer out investments.
For those who already larger portfolios, it might be more sensible to invest with Fidelity. Fidelity charges £9 per trade and a 0.35% but offers extra savings for those with larger portfolios.
Comparing several of the major brokers and offers regarding ISAs, Hargreaves Lansdown offers not only cheaper dealing admissions at £5.95 for frequent traders but has no dealing charges when buying and selling funds, no upfront charges and offer free share tips to clients.
With regulations around ISAs changing, they are proving to be more popular following the Chancellor’s announcement that after changes put into place in June 2014 now allowing savers to invest up to £15,000, over six million savers would benefit.
Safiya Bashir on 19/10/2015
