Best Lifetime ISA

Antonia says

Our independent research of historical returns has identified Moneybox as the best-performing ready-made portfolio in a Lifetime ISA. That means that if you are a beginner who would like to grow your Lifetime ISA on the stock market but are not sure where to even start, this is a solid option. Of course, past results won’t ever guarantee future results, but they can give you an indication of how well the portfolios are being managed.

This is also a solid option for those seeking a safer alternative, as the Cash LISA at Moneybox currently has the leading interest rate of 4.40% AER.

The app is super easy to use, and of course, Moneybox comes with loads of great savings features such as round-ups, which could just help you purchase your new home that little bit quicker. There is also mortgage advice, a free deposit calculator, automatic deposits, and a Home-buying ‘Gifts’ feature that allows friends and family to contribute towards your home deposit.

Use this if

• You are looking for the highest returns on a ready-made portfolio in a LISA.
• You would like the option to build your own portfolio.
• You don’t have a large starting pot and could utilise the money-saving tools to grow your portfolio.

Fees

• £1 subscription fee after the first 3 months
• 0.45% platform fee
• Annual fund provider costs 0.09% – 0.88%
• 0.45% FX fee for US stocks

Investments

• Ready-made portfolios
• US Stocks
• Fractional shares
• Tracker funds
• ETFs

Antonia says:

AJ Bell offers a really low-cost option for a Lifetime ISA, and the recent reduction to their trading fees has made this even better value.

The average historical returns on their ready-made portfolios are just above the industry average, and there has been particular success for investors who were willing to assume a bit more risk with their adventurous portfolios.

Investors with a bit more knowledge will enjoy the range of shares, funds, investment trusts and ETFs to choose from.

You won’t find a Cash LISA at AJ Bell. If that’s your preference then I would look to Moneybox.

Use this if

• You are a buy-and-hold investor looking to hold shares, ETFs, and investment trusts.
• You have a large portfolio.

Fees

• Shares custody charge: 0.25% (maximum £3.50 per month)
• Funds custody charge: 0.25%
• Shares dealing: £5
• Ten or more share deals in the previous month: £3.50
• Fund dealing: £1.50

Investments

• Shares
• Funds
• Exchange-traded funds
• Investment trusts

Antonia Says

Nutmeg are a great option for home savers who would like the maximum amount of assistance with investment decisions. As a robo-advisor, they will take you through a series of questions that are designed to match you with a portfolio to suit your circumstances and risk tolerance.

It would be remiss not to mention that their managed portfolios have seen fairly poor returns so, here at Investing Insiders we had a look at how these returns compared to the less expensive fixed allocation portfolios. We were surprised to learn that with the exception of the lowest risk portfolio, fixed allocation has actually outperformed fully managed for the past five years net of fees. This could help some investors make a more informed decision.

Use this if

• You are just starting out with limited to no investment experience and require the maximum amount of assistance available.

Fees

• 0.7% – 1.15% for portfolios ranging from fully managed to fixed allocation.

Investments

• Ready-made portfolios
• Socially responsible investing
• Thematic Investing

Antonia Says

Hargreaves Lansdown has a long-standing reputation for offering a best-in-class service, albeit at a significant cost. This is the largest fund supermarket in the UK, with over 3,500 funds to choose from, so if you are the sort of investor who finds this breath of choice intimidating, you may be best served elsewhere.

Education is excellent here and there is the option to access financial advice
on the phone or in person; however, this does come at a cost that is akin to the industry standard.

Hargreaves Lansdown has recently reduced their account fees for the Lifetime ISA, and at 0.25%, this is now a fairly cost-effective solution unless you are looking to deal shares on a regular basis, in which case anything short of nine deals per month will result in charges of £11.95 per deal. This is about as high a dealing fee as you will find anywhere. However, you can buy and sell funds free of charge, so that’s still a viable option.

Use this if

• You are planning to invest in funds and would like to use a platform that provides comprehensive guidance at every step of the investment journey.

Fees

Management Fees:

• 0.25% for funds
• 0.25% capped at £45 for shares

Share Dealing fees:

• 0-9 deals in the previous month – £11.95 per deal
• 10-19 deals – £8.95 per deal
• 20+ deals – £5.95 per deal

Investments

• 3,500 funds
• Global shares
• Bonds
• ETFs
• Unit trusts
• Investment trusts

Antonia says:

This is one of the best value Lifetime ISAs available and makes for a really easy, seamless experience for those with no, or limited investment experience.

At Dodl there is also the added comfort of knowing that they are part of a big legacy brand, making this a reliable option. They also provide a great level of customer service so newbies are fully supported along the way.

Investors can pick from ready-made portfolios or some assets including stocks, funds, and ETFs. However, this is a fairly limited service that won’t suit investors with experience looking for a wide range of assets to pick from.

Use this if
You are looking for a really pared-back, cheap and easy service that is quick to get up and running.

Fees

• Account charge of 0.15% per year
• FX fees: 0.75% – 0.25%
• Min deposit: £100 for lump sums, £25 for monthly deposits

Investments

• Ready-made portfolios
• UK and US stocks
• Funds
• ETFs