Lloyds Share Dealing: Very high UK dealing fees but no platform fees for 18-25 year olds and no dealing fees on international stocks

• ‘Buy-and-hold' investors (investors who don't plan to buy or sell often) with a large portfolio, looking for a low-cost, flat fee ISA
• Existing Lloyds customers wanting to invest in funds

Accounts

Lloyds Shares Dealing service offers its customers access to:

• A Share Dealing General investment account (GIA) is an account designed to provide access to investments. You may be liable for tax on any income or capital gains earned within a general investment account but this can be a useful vehicle for anyone who has maxed out their ISA allowanceGeneral investment account
• A Share Dealing Sometimes called an investment ISA, a stocks and shares ISA is an individual savings account that allows you to invest in shares, unit trusts, investment funds, and bonds. You will not need to pay tax on any income or capital gains earned on investments within an ISAStocks and shares ISA
• A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundSelf-Invested Personal Pension (SIPP)
• An Invest Wise Share Dealing Account for 16-25 year olds
• An Invest Wise ISA for 16-25 year olds

They're not under the Lloyds Share Dealing umbrella, but also through Lloyds Bank, it's possible to open a Cash ISA and Junior Cash ISA too.

The Lloyds stocks and shares ISA and ready-made personal pension SIPP are only available to existing Lloyds customers, but it's possible to open a general Share Dealing account without having a Lloyds bank account. You will not be able to invest in ready-made portfolios without being a Lloyds banking customer, however.

A stocks and shares ISA is a ‘tax wrapper' – that means your investment account has a layer of protection from taxes that apply to general investment accounts. There is no income tax or Capital Gains Tax to pay within an ISA, which is why general investing accounts are only usually recommended for those who have maxed out their annual ISA allowance.

The Lloyds ‘ready-made personal pension' is a SIPP. That means it's a type of pension designed to give you additional freedoms over how and where your retirement savings are invested. However, with this Lloyds product, there isn't a whole lot of choice – just two funds. As the name suggests, it's better suited to those who want a pension that's ready-made, built and managed for you, with as few decisions as possible.

If you want more choice than just two funds, check out our Best personal pension and SIPP list.

To open a SIPP with Lloyds, you'll need to have either:

• one or more pension transfers (with a total combined value of at least £10,000)
• a lump sum of £5,000 (inclusive of tax relief)
• regular monthly payments of £150 (including tax relief)

Assets

Despite the name – Lloyds Share Dealing – the platform offers more than just shares. Current available assets include:

• 4,800+ UK and international stocks
• Exchange traded funds (ETFs) are traded in much the same way as stocks. Instead of an individual stock, however, you own a basket of different assets which track the performance of a particular index or market. ETFs
• 2,900 Funds
• Investment trusts
• A bond is a fixed-income investment. When you buy a bond, you are lending money to a government or company for a set period of time in return for regular interest payments.Bonds and A gilt is a UK government bond.gilts

This is an impressive selection of funds and stocks – certainly one of the largest choices offered by any of the high street banks. You could still find more choice with an investment-only provider such as interactive investor or Saxo, but certainly a selection that will satisfy most ordinary investors.

• Ready-made portfolios

These are only available to existing Lloyds banking customers, and there are just three ready-made solutions to choose from: cautious, balanced or progressive. You'll need to feel confident assessing your own risk profile and matching yourself to the right portfolio as there is no opportunity to get help with this as there is with Santander, BestInvest, or one of the robo-advisor apps for example. for example.

As well as being an existing customer, you'll also need £50 a month or £500 as a lump sum to take this option.

It's worth noting that just three ready-made portfolios isn't a huge range. If you feel none of the options align with your risk profile or goals, then it's wise to look elsewhere. interactive investors, Moneybox, Bestinvest, Nutmeg and AJ Bell offer wider selections of ready-made portfolios.

Lloyds Share Dealing makes the following charges:

Account fees

Lloyds applies a six-monthly administration charge of £20.00 every April and October.

There are a couple of groups of people who don't have to pay this, however: the charge is waived for Premier and Private Banking customers, and for 18-25 year olds.

Even if you're a customer that does still have to pay the admin fees, if you hold a large value portfolio, that flat £40 annual fee (equivalent) could represent excellent value. On a portfolio valued at £20,000, for example, that's the equivalent of a 0.20% percentage-based fee; that's lower than AJ Bell, Fidelity, Barclays and HSBC charge, for example.

Dealing fees

This where things can work out more pricey, however.

Dealing fees are:

• For funds – £1.50 per trade (or trade for free with the Regular Investment Plan)
• For UK shares – £11.00 (£10.00 for Premier and Private Banking customers) (£8.00 if you trade 8 times or more online per quarter)
• For international shares – £0 (but 1% FX fee applies)

Those dealing fees on UK shares are very high. There is a potential way around the cost, though. If you trade through the Lloyds Regular Investment Plan, dealing fees are waived altogether. This means setting up a plan to drip-feed money each month into your investment account, which may not be the right strategy for you, however.

A foreign exchange (FX) fee is added to all trades involving foreign currencies. If you buy a stock that trades in US dollars, for example, and your home account is in GB pounds, you'll need to pay an FX fee.FX fees

A flat 1% of trade amount. While the £0 dealing fees for international shares seem very enticing, it's important to remember that 1% on currency exchange is pretty high. With free trades though, it may work out economical if your trades aren't large.

Here's how other platforms charge for FX:

Note that, unlike Lloyds, many other platforms reduce FX fees for larger transactions. Lloyds is not the worst offender we've found, though – Halifax has an even higher flat FX rate as you can see in the chart above.

Fund fees

These are levied by the fund provider, vary depending on the fund you chose and are paid directly from your investment. Fund fees can be found in each fund's accompanying Key Investor Information Document.

Ready-made portfolios

Fees for a ready-made solution are £3 per month plus ongoing fund fees and transactions costs that range from 0.32% for a Cautious portfolio, to 0.37% for a Progressive portfolio. That's fair but you could also find cheaper elsewhere as this chart shows:

SIPP costs

You’ll need to pay an annual account fee of 0.30% (or a minimum of £5 per month) plus an ongoing investment charge of up to 0.24%. What you pay will depend on how much you invest.

This is comparatively expensive, so shop around if you're after a A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundSIPP. My list of the best-priced SIPPs and personal pensions can be found here.

Lloyds doesn't charge for pension transfers, and they also don’t charge to top up or drawdown your pension.

Transfer costs

No charge.

Interest on uninvested cash

Lloyds does not pay customers interest on their uninvested cash, which is a bit cheeky as they receive it when you leave cash uninvested. They say they retain these interest payments to “develop our products & services”. If you plan on holding cash while you're weighing up options between trades, then shop around as this is a poor deal. The majority of Lloyds' competitors do pay interest on uninvested cash, as you can see here:

Comparing costs

If we look at how Lloyds compares to other high street banks for a stocks and shares ISA, Lloyds comes out as one of the cheapest in the cost example below, where we've imagined a customer who is only buying and selling US stocks. That's because Lloyds waives dealing fees on international stocks.

If you're an investor interested in UK-listed assets, however, those high dealing fees on UK stocks means Lloyds works out far more expensive. In this example, we've imagined you made one trade per month.

For an investor in funds, Lloyds can work out relatively good value. Especially if you're aged 18-25 or a Premier/Private banking customer:

So, among the high street banks, Lloyds does well. However, it isn't just other high street banks you should be making comparisons with. With so many investment platforms offering easy, fully-digital account-opening procedures, and excellent, competitive pricing, it's always worth going through a comparison page or two to weigh up your options from the whole of the market. Our Best ISA, Best investment platform and Best personal pension and SIPP pages provide quick results and will give you peace of mind that you're getting the best possible platform for your needs.

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