Best Stocks & Shares LISA (UK): 4 Platforms, Head-to-Head

Lifetime Individual Savings Accounts (LISAs) are a relatively new kind of savings account introduced in 2016. LISAs are unique in that they offer all the regular tax benefits of a regular ISA but also get a 25% bonus from the British government. LISAs were created as a way to incentivise saving for young people. 

There are two major types of LISAs out there; cash LISAs and stocks & shares LISAs. With cash LISAs, you put cash into the account and watch it continually collect interest. Stocks & shares LISAs, in contrast, put your funds into the stock market, which can be pretty turbulent. Stocks & shares LISA show the most potential for future growth however.

There are a couple of restrictions to LISAs though. First off, there is an annual contribution limit to LISA of £4,000 a year. This value is taken out of the general £20,000 ISA allotment. You also have to be between 18-39 to open a LISA. Unlike a regular ISA, you won’t be able to withdraw from your LISA unless you are at least 60, are buying a house, or are terminally ill (or some combination of the three). You must also make your first contribution by the time you are 50 years old. 

After their introduction, many brokerage services started offering LISA services for their clients. We put together this list comparing LISA services form some of the top brokerages in the country. We will compare stocks & shares LISA selections and give them a full accounting. We did the research to make sure this review is as objective as possible so you can make an informed choice.

4 Stocks & Shares LISA (Head To Head)

1. Nutmeg
2. Hargreaves Lansdown
3. Moneybox
4. AJ Bell

Nutmeg LISA

Nutmeg is the first entry on our comparison list. Nutmeg was launched back in 2011 as a less expensive alternative to wealth management services. Their portfolios mostly focus on ETFs and tracker funds.

Nutmeg is poised for low-cost investing. Their investment model involves 10 pre-selected portfolios, each of which has a distinct mixture of asset classes. Portfolios range from “cautious” to “aggressive” and are diversified through global markers.

Nutmeg offers a LISA that can be signed up for in just a few minutes. When signing up, you can choose between 1 of 3 ISA portfolios; a fixed allocation portfolio, a fully managed model, or the socially responsible manager portfolio. The socially managed portfolio is interesting and includes stocks and shares from companies focusing on alternative energies, economic equality, and affordable housing, and more. 

Nutmeg has pretty standard LISA fees that generally decrease the more you have invented. Here is a quick table with some comparisons

Type of portfolio	<£100,000	>£100,000	Funds
Fixed allocation	0.45%	0.20%	0.17%
Fully managed	0.75%	0.35%	0.19%
Socially responsible	0.75%	0.35%	0.32%

As you can see, if you invest more than £100,000 then you get a reduced account fee percentage. Fund fees are fairly standard aside from the socially responsible portfolio which has slightly higher fund fees. You have to deposit at least £100 to begin investing.

One of the more unique features of Nutmeg is the set-up process. Unlike most brokerage accounts that let you sign up and start investing money wherever you want,  Nutmeg has a tool that lets you plan out for the future. The planning tool lets you preview your portfolio so you can get a projection of its future worth. It is a useful tool to chart out your future goals.

Nutmeg also has a tool that helps calculate an ideal contribution. These tools take into account your assets, debts, and total liquidity. Once you determine your goals, the services will give you a questionnaire to determine your risk preferences. Obviously, you are given the option to change things if you don’t like the portfolio that is generated for you. After that, the set-up is complete and the account will start to grow. 

Pros

• Simple and straightforward process is good for newcomers
• Low account minimums
• Useful tools help calculate contribution plan
• Socially responsible portfolio selection is a good option for more socially conscious investors
• Fixed and fully managed LISAs available

Cons

• Relatively limited portfolio selection
• You cannot tailor individual portfolios
• No cash LISA offered

The bottom line is that Nutmeg is a great platform for beginners and first-time investors. While it does have a relatively limited portfolio selection, the available options are strong and have good potential for growth.

Hargreaves Lansdown LISA

Hargreaves Lansdown is one of the largest financial services providers in the UK and has quite a large reputation. As is probably expected from a larger brokerage firm, HL began offering LISA shortly after they were introduced by the UK government.

Given that they are a full services financial firm, HL offers a staggering amount of financial services, including investment management, tax preparation services, and more.

Hargreaves Lansdown also offers LISAs with a lot of flexible investment optional HL LISAs can contain assets from more than 2,500 funds located all around the world. HL LISAs also allow you to invest in bonds and ETFs. Another great feature from HL is the ability to child cash in your account. If you want to know more about exact specifics, HL has a handy factsheet on their website that you can download and peruse at your leisure. 

LISA accounts can be started with as little as £100. HL ISAs and LISAs are extremely flexible, and you have essentially complete control over where your investments go. This is a great feature if you are an experienced investor who knows how to build and diversify a portfolio, but it could be a drawback if you are less experienced.

HL offers a wide selection of investments and manages to keep its prices and fees pretty low. There is only one type of LISA so there is only one type of pricing scheme that depends on how much you have invested in the platform. Here is a quick breakdown of the charges:

Portfolio type	<£250,000	£250,000-£1,000,000	£1,000,000-£2,000,000	£2,000,000+
LISA	0.45%	0.25%	0.1%	0%

As you can see, the more you invest, account fees drop off pretty sharply. The best rates are reserved for the highest accounts but even if you build up £250,000 you get a solid discount. If you somehow manage to invest more than £2,000,000 then account fees are eliminated entirely.

However, these are not the only charges. HL has different interest and expense rates for different kinds of funds, so the actual amount of fees you pay may differ from the percentages that are given above. As of March 2020, HL has a base 0.10% interest rate on all account types and all accounts have variable rates.

Pros

• Versatile flexible portfolio selection
• Relatively low fees
• Low minimum investment amounts
• Historical account performance is high

Cons

• Lots of fees
• Flexible portfolios might intimidate novices

The bottom line is that HL is a great investment platform if you have a bit of investment experience and want more flexible control. HL also manages to have fairly low account fees but does charge quite a few other fees not reflected in account fees.

Moneybox

Moneybox is another relatively new investment service based on the philosophy of micro-investing. One of Moneybox’s key features is the round-up purchases option. This option will round up any purchases on a linked payment method and put the spare change in your brokerage account. We are a big fan of any service that discourages mindless spending, so Moneybox does very well on that front.

Moneybox’s LISA allows you to save for retirement and get those nice tax benefits. Like most services, you have to be between 18-39 to open a LISA with Moneybox. Moneybox is one of the few services to offer both a cash LISA and a stocks & share LISA. Unfortunately, the platform does not currently give you the option to transfer funds between the two accounts. This means you’ll have to hold each account separately.

Moneybox charges a flat £1 monthly fee for all accounts, which covers all transactional and investing costs. Along with that, they charge a flat 0.45% annual fee on all investment accounts. This is in addition to any applicable fund fees, which range from 0.12%-0.30%. Moneybox will also charge a termination fee if you close your account. This termination fee is just equal to any remaining account and monthly fees.

Account type	Annual fee	Monthly fee	Funds
LISA	0.45%	£1	0.12%-0.30%

Moneybox is also currently offering a nice promotional period for LISA accounts. If you sign up after June 22nd then you will get a 0.5% introductory bonus over the first year. This is a separate bonus from the standard 0.5% interest that your account gains. Keep in mind that you will not be entitled to this bonus if you cash out your LISA account within 12 months.

Pros

• Very easy to get started
• Flexible approach to investments
• Simple payment structure
• Special promotional bonus period for LISAs

Cons

• Limited investment selection
• Flat £1 fee can be expensive at first
• No reduced fees for larger account values

Moneybox is a good service if you want a simplified approach to investing. One criticism is that you can’t exchange funds from a cash LISA and stocks & shares ISA. However, the £1 flat fee can be a large portion of your assets when just starting out. 

AJ Bell

Last on our roundup is AJ Bell, a brokerage also known by the name Youinvest. AJ Bell is designed mostly for DIY investors who want a more hands-on approach to investing and saving for retirement.

AJ Bell also offers a LISA selection. Unlike many brokerage services, AJ Bell has a £25 minimum deposit each month for your LISA. It also has low-cost deals with deals starting at £1.50. Average LISA holders normally don’t spend more than £9.995 per online deal.

AJ Bell has a relatively simplified payment structure. They charge the same annual fees for all account types, including LISAs, and reduce the rate the more you have invested in the platform. Here is a table charting a breakdown of the costs. 

Type of account	<£250,000	£2500,000-£1,000,000	£1,000,000-£2,000,000	£2,000,000+
LISA	0.25%	0.10%	0.05%	0%

As you can see, AJ Bell has very low fees on accounts. They also charge an ongoing fee for managing the fund. This fee is capped at a max of 0.35%. Despite this extra fee, costs for holding an AJ Bell account are low. A 0.25% rate for a £5,000 account value equates to a tiny £12.50 fee per year. 

Pros

• Very low account fees
• Low-cost deals starting at £1.50
• Flexible approach to portfolio structures
• 24/7 account access and support
• Resource library for investment strategies

Cons

• Lots of small hidden fees
• Not much guidance

AJ Bell is a decent investment platform for LISA and boasts some of the lowest account fees of any investment platform we have covered. AJ Bell is a good platform for DIY investors who want more control, but that flexibility may be off-putting for beginners who do not know much about stocks. So, we recommend AJ Bell for moderately experienced investors who know how to build a proper portfolio.

Final Thoughts

Lifetime Individual Savings Accounts are a great way to get into savings. LISAs carry all the benefits of a regular ISA but include a nice 25% bonus from the UK government. Stocks & Shares LISAs are the ideal choice because they give you a broad investment selection and have greater potential for growth than a cash LISA. 

When it comes to LISAs, the best option is to find a long term sustainable plan. Any 4 of these platforms would be an excellent choice for opening a LISA.