In this review we look at the Lightyear Cash ISA, launched in early 2025, and compare it with the Cash ISAs offered by other providers.
What is the Lightyear Cash ISA?
Lightyear, the investment platform founded in 2020 by former Wise heavyweights Martin Sokk and Mihkel Aamer, now offers both a Cash Individual Savings Account (ISA) and a Stocks & Shares ISA.
ISAs allow you to save up to £20,000 in the current 2024/2025 UK tax year (tax-year runs from 6 April to 5 April the following year).
Cash ISAs specifically allow savers to put away cash, rather than invest in the stock market, and earn tax-free interest on the account’s balance. This is usually a lower risk option, though the returns are typically lower than those of stocks as well.
Lightyear Cash ISA Review: Interest paid based on the Bank of England’s base rate
Product Name: Lightyear Cash ISA
Product Description: With Lightyear Cash ISAs your funds are held securely in UK banks and qualified money market funds (QMMFs), and you’re free to access or withdraw your money without fees or penalties. Lightyear’s ISAs are flexible, meaning you can move money freely in and out of them without losing any of your annual allowance. They also have no minimum deposit. More about Lightyear Cash ISAs below.
How does the Lightyear Cash ISA compare with rivals?
The Lightyear Cash ISA is very competitive compared to its longer-established rivals, thanks to its high interest rate and flexible terms. It allows withdrawals and transfers with no penalty to the £20,000 allowance, the interest rate or additional fees.
The AER interest it pays on cash tracks the Bank of England interest rate, which is currently 4.5%. The rate is variable and subject to change.
This appears to be above the rate offered by most Cash ISAs, such as the third party accounts offered through Hargreaves Lansdown, which offer up to around 4.5%, though some of these are offer rates fixed for a specific term.
There are rival Cash ISAs that offer higher rates. Not all of these are fully flexible, however. Some, including MoneyBox and Plum – which both (as of 10/02/2025) have rates of around 5% –reduce the interest they pay to new customers who make more than three or four withdrawals from the ISA a year respectively.
It looks like the only fully flexible ISA that offers a better rate is Trading 212, which sets it at 4.9% AER.
Lightyear’s ISAs charge no hidden fees (such as transfer charges). Lightyear UK is authorised and regulated by the Financial Conduct Authority (FCA), and you may be able to claim up to £85,000 from the Financial Services Compensation Scheme (FSCS) if Lightyear were to default and there is a shortfall in the cash or assets returned to you.
Pros
- Interest rate tracks Bank of England base rate
- Fully flexible
- No hidden charges
Cons
- Not the highest rate
- Lightyear is a new provider
- No fixed rate
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Cash ISA Rating
(5)
Overall
5
Richard is the founder of the Good Money Guide (formerly Good Broker Guide), one of the original investment comparison sites established in 2015. With a career spanning two decades as a broker, he brings extensive expertise and knowledge to the financial landscape.
Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
Richard’s contributions and expertise have been recognized by respected publications such as The Sunday Times, BusinessInsider, Yahoo Finance, BusinessNews.org.uk, Master Investor, Wealth Briefing, iNews, and The FT, among many others.
Under Richard’s leadership, the Good Money Guide has evolved into a valuable destination for comprehensive information and expert guidance, specialising in trading, investment, and currency exchange. His commitment to delivering high-quality insights has solidified the Good Money Guide’s standing as a well-respected resource for both customers and industry colleagues.
You can contact Richard at richard@goodmoneyguide.com
