UK clients of Lightyear are set to become protected by the £85,000 Financial Services Compensation Scheme (FSCS) guarantee on bank deposits, after the investment app was authorised by the UK regulator.
UK accounts with the firm will be migrated to Lightyear UK, which has now received the direct authorisation of the Financial Conduct Authority (FCA).
The transfer will take place between 21 December this year and 16 January 2025, with all uninvested cash and assets moving across to the newly authorised business.
As part of the change, Lightyear UK accounts will receive the FSCS guarantee on deposits up to £85,000, should the business fail.
Previously UK clients of the app were protected by the Estonian Investor Protection Sectoral Fund under Lightyear Europe. This guarantee only goes up to €20,000 per investor.
The change, alongside the fact that Lightyear now has official regulatory authorisation in the UK, should provide more confidence to clients who are considering using the platform.
This comes around two years after the business was founded by employees of money transfer platform Wise.
It adds another selling point to what the latest Good Money Guide review found to be “A very well-designed low-cost investing app with discounted FX charges, limit and recurring orders for investing in local and international markets”.
Earlier this month Lightyear announced it is set to launch cash and stocks & shares ISAs in early 2025, with the intention of challenging major brokers such as Hargreaves Lansdown. The firm received FCA approval for the products earlier this year.
Lightyear launched its “Vaults” feature in May, through which customers can earn higher monthly payments on cash in money market funds managed by BlackRock.
In October, the firm introduced a refer-a-friend offer, which allows users as well as those they refer to the company to earn £10 in free stocks when they join and fund their account with at least £50.
Robin has more than six years of experience as a financial journalist, most of which were spent at Citywire, and covers the latest developments in the investing, trading and currency transfer space. Outside of work, he enjoys reading literature and philosophy and playing the piano.
You can contact Robin at robin@goodmoneyguide.com
