Halifax and Bank of Scotland have changed the charging structure on their investment Isas, now charging a percentage of the Isa’s value, instead of a flat fee.
The accounts both now charge 0.24% a year, split equally into monthly payments. Confusingly, this is described as a 0.24% monthly charge, though the actual amount billed each month will be 0.02%.
Previously, investors would pay a flat fee of between £3 and £20 a month, depending on the amount held.
Fund charges are unchanged, costing 0.45% of any money held in funds within these Isas, on top of this 0.24% service charge.
Sean Quinn, managing director of share dealing at Lloyds Banking Group, which owns both Halifax and Bank of Scotland, says “The new percentage based charge will allow customers to compare charges in the market place and also make it easier when considering the overall cost, including the fund charge.”
If you hold one of these products, you could be better or worse off depending on the size of your portfolio. For most people the difference will be just a few pounds a year, but for larger portfolios the increases could be substantial.
A £5,000 portfolio will now cost £12 a year, saving £24 on the previous annual charge of £36. Charges on a £15,000 portfolio are unchanged at £36 a year.
However, if you have a £25,000 invested in the Halifax or Bank of Scotland investment Isa, you’ll now pay £60 a year, when previously it would have cost £48. And for a larger portfolio, say £250,000, you would now pay £600 a year, while you’d previously have just been charged £240.
As an investor, the charges you pay are one of the only things that are directly in your control, so see our guide to investment Isa platforms to find a better home for your money.