Lightyear Stocks & Shares ISA Review

How does the Lightyear Stocks & Shares ISA compare with rivals?

In most respects the Lightyear Stocks & Shares ISA stands up very well against competing products from longer-established providers.

This is thanks to its flexible and transparent low fee structure. Unlike with many rival Stocks & Shares ISAs, there are no platform fees and no hidden charges, such as transfer fees or penalties for withdrawing money. 

This makes the Lightyear Stocks & Shares ISA among the very cheapest. By comparison, the UK’s most used investment platform, Hargreaves Lansdown, carries fees of up to 0.45% on assets in funds and shares held through its platform. 

Vanguard, a lower cost alternative, will shortly raise its monthly account fee to £4 for DIY investors with less than £32,000 on its platform (and 0.15% of assets above this amount), including assets invested in ISAs. This amounts to a minimum charge of £48 per year. 

To highlight the benefits of its low fee offering, Lightyear commissioned research by Capital Economics that reveals that ISA holders lose over £850 million to account fees each year. The independent macroeconomics research consultancy has also validated that Lightyear’s Stocks & Shares ISA will be 10 times cheaper than the average market provider over 10 years. And 16 times cheaper over 25 years. 

Lightyear’s ISA also carries no transaction fees for Exchange Traded Funds bought through the platform, including through its ISA.Keep in mind that ETFs each have their own individual costs, which vary depending on the underlying fund manager.

The ISA does, however, carry standard transaction fees of £1 for orders in sterling-denominated securities, 0.1% up to $1 (minimum $0.01) for US stocks and €1 for European stocks. It also charges a 0.35% fee to convert money into foreign currencies and back to GPB for sale proceeds/dividends etc at the live interbank rate.

Hargreaves Lansdown implements one-off fund and share dealing charges of between £5.95 and £11.95, respectively, while Vanguard’s fund transaction costs ranging from 0% to 0.46%.

Vanguard’s account fee was previously set at 0.15% of assets across the board, and will remain at this level for balances above £32,000.

One possible disadvantage Lightyear has is that it is a newer entrant to the investment platform space, so may be perceived as less safe or reliable than these large incumbents which have been well-tested by their large customer bases.

For a relatively small platform, it still offers a wide range of investment options, however. These include more than 3,500 stocks and funds, including fractional shares.

As you might expect, Hargreaves Lansdown offers many more securities than this, including access to more than 8,000 and 3,000 funds. However, it does not offer fractional shares.

One area where Lightyear could be argued to do less well is in the level of interest it offers on uninvested cash, including in its Stocks & Shares ISA. Here it offers a rate of 3% on sterling, which is below some of its competitors.

However, it also allows users to place their money in high interest “Vaults” product, or money market funds, backed by BlackRock. These currently offer among the best interest rates on the market, at around 4.83% as of 16/01/2025. Vaults are available within the S&S ISA.