Vanguard vs IWeb: Which Is The Cheapest ISA Platform? (2024)

An investment platform lets you buy, sell, store and value your shares, bonds and funds. Some platforms also provide research. All platforms have a website and some have apps for your mobile and tablet. But how much should you pay for a platform? And should you pay a percentage of the value of your investments each year or a fixed cash amount each year?

The video that accompanies this article was produced in December 2018 so some of the figures are out of date. This article was updated in January 2021 to include the most recent fees.

In this article we compare the costs of two of the cheapest platforms: Vanguard and IWeb. IWeb's annual fee is zero, but it has a setup fee and charges for trades whereas Vanguard charges 0.15% of the amount you invest capped at £375 per year, has no setup fee and you can trade for free. It turns out that the cheapest platform depends on how much you invest and how much you trade.

What Are You Paying For?

Notice that this article is about comparing the cost of these two platforms. It isn't about which platform is best for you - I've created a whole course for that topic:

  • Finding The Right Investment Platform

It's worth mentioning that Vanguard only allows you to trade its own funds whereas IWeb gives you a choice of thousands of funds and shares.

Account Fee

The most basic function of a platform is to hold your investments on your behalf. There are many regulatory requirements that a platform must satisfy and a great deal of financial plumbing that they have to build and maintain. They also have to pay a team of people to provide support when you run into a problem or need information. That's why some platforms charge you a fee for holding your investments. The name of this fee varies e.g. account fee, ongoing fee, platform fee, custody charge.

Account fees are either charged as a percentage of your invested amount or as a fixed cash fee. When you compare the fee you pay for different platforms you must know how much you are going to invest. Generally speaking, for small investments the percentage fee is often cheaper and for large investments the flat fee is cheaper.

Percentage of Investment

In this fee model each year you will be charged some percentage of your invested amount. Vanguard charges fees in this way using a rate of 0.15% of your invested amount paid quarterly. However, the fee is capped at £375 per year, so you will never pay more than this amount. The cap means your fee stops increasing once you reach an invested amount of £250,000 (because £375 is 0.15% of £250,000).

This table illustrates Vanguard's fee structure as we vary the amount invested.

Amount Invested (£)

Vanguard Annual Account Fee (£)











Here is the Vanguard fee structure as a graph, note how the fee cap asserts itself at £250,000 invested.

Fixed Cash Fee

Some platforms charge a fixed cash fee each year. To name a few examples of this fee model amongst Stocks & Shares ISAs:

  • Alliance Trust Savings charges a fixed fee of £120 per year
  • Interactive Investor £90 per year
  • IWeb is unusual in that its fixed cash fee is £0 per year!

Entry Fee

IWeb charges £100 to open a Stocks & Shares ISA whereas opening an ISA with Vanguard is free.

Exit Fee

IWeb used to charge exit fees but quietly stopped doing so in May 2019. They used to charge £25 per individual stock to transfer to another provider capped at a maximum charge of £125 but after the FCA announced it was clamping down on this dodgy practice they removed these charges. Vanguard has never charged for closing your account or transferring funds to another provider.

Trading Fees

IWeb charges a fixed amount for each trade. You can control how much you pay in trading fees by trading as little as possible. But some trading is always necessary, for example to buy funds when you open an account, or if you deposit more funds that need to be invested, or for the occasional rebalancing your portfolio.

Source: IWeb

Vanguard offers two ways to trade, one of which is free and another which is not. This is the popup that appears when you click on "Invest" on the Vanguard platform.

Source: Vanguard

"Next trading point" bundles your trades with those of all the other Vanguard clients and executes the trades in bulk at very low cost to Vanguard and at no cost to you. The drawback is that the price at which you trade might be slightly different from the price when you place the order. If you definitely want to trade at a price you know then for exchange traded funds (ETF) this is possible using the "Live price" option, but you will have to pay a fixed fee of £7.50 for each trade.

So, which is cheaper?

The answer depends on your investment behaviour and the amount you invest. One way to look at it is to ask how many trades you would need to do on IWeb to equal the Vanguard percentage fee as the amount invested increases.

Amount Invested (£)

Vanguard Annual Account Fee (£)

IWeb Trades Per Year To Exceed Vanguard Fee
















If the amount invested is £20,000 or less all it would take is six trades per year for Vanguard to be cheaper than IWeb. It is quite likely that routine portfolio maintenance would generate this number of trades per year. However, if you invest £100,000 the number of trades to break even would be 30 and it would be quite easy to ration your trades to be below this number. The precise cutoff would depend on how frequently you trade.

Another way of comparing the two is the time taken for Vanguard's annual fee to exceed the initial setup fee of £100 for IWeb, but this tells a similar story. If your invested amount is £10,000 then Vanguard's fee will exceed the setup fee for IWeb in just under two years assuming you don't trade at all with IWeb.

Amount Invested (£)

Vanguard Annual Account Fee (£)

Years To Equal IWeb Setup Fee With Zero Trades



16.7 years



3.3 years



1.7 years



0.17 years (two months)



0.07 years (one month)

The final comparison we will consider is a more realistic comparison where we assume there is some trading activity.

When comparing fees IWeb always starts behind in the race with Vanguard by charging its £100 initial fee. It will never catch up if the cost of trades per year equals Vanguard's annual fee.

Show the details of the calculation when IWeb is never cheaper than Vanguard

For example let's say we have £16,666.66 invested and we do five trades per year:

  • Vanguard fee = 0.15% * 16,666.66 = £25
  • IWeb fee = five trades x £5 = £25

Due to the £25 initial fee Vanguard will always be cheaper than IWeb because the amount paid for trades on IWeb equals the platform fee for Vanguard.

If restrict ourselves to five trades per year and invest more than £16,666.66 then IWeb will at some point be cheaper than Vanguard. In this case, IWeb's savings from its zero platform fee catches up with Vanguard more quickly if

  • We do fewer trades per year
  • We invest a larger amount

Show the details of the calculation of how long IWeb takes to become cheaper than Vanguard

Using five or ten trades on IWeb per year the time for IWeb to be cheaper than Vanguard as we increase the amount invested is:

Amount Invested (£)

Years To Equal IWeb Setup Fee With Five Trades Per Year

Years To Equal IWeb Setup Fee With Ten Trades Per Year

IWeb never cheaper if amount is less than...




20 years



5 years



2.9 years

10 years


2 years

4 years


Ultimately the choice of cheaper platform depends on whether you can restrict how much you trade or invest large sums. Either of those will tilt fees in favour of IWeb. If you want to trade more frequently or have a small amount to invest then you would be better off with Vanguard.

This table shows which platform would be cheaper as we vary amount invested and trades per year, and in cases when IWeb is cheaper, the number of years taken to absorb the cost of IWeb's entry fee.

Vanguard vs IWeb: Which Is The Cheapest ISA Platform? (4)

Although we have compared just two platforms in this article you can use the equations in the detail boxes above to compare other platforms using a similar approach.

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Vanguard vs IWeb: Which Is The Cheapest ISA Platform? (2024)


Is IWeb cheaper than Vanguard? ›

Ultimately the choice of cheaper platform depends on whether you can restrict how much you trade or invest large sums. Either of those will tilt fees in favour of IWeb. If you want to trade more frequently or have a small amount to invest then you would be better off with Vanguard.

Which ISA has the lowest fees? ›

Cheapest stock and shares ISA if you want to pick your own funds (unit trusts)
Cost per fund transaction£20,000 portfolio
Hargreaves Lansdown*Free£90
Interactive Investor*£3.99 or £5.99£120
7 more rows
Aug 1, 2023

What is the alternative to Vanguard ISA? ›

Vanguard vs Hargreaves Lansdown - products

Hargreaves Lansdown has a wider array of products available than Vanguard. While both platforms offer stocks and shares ISAs, GIAs, JISAs and SIPPs, Hargreaves Lansdown also has savings accounts, a cash ISA, a fund and share account, a Junior SIPP and a LISA.

Is Vanguard good for ISA? ›

Vanguard ISA at a glance

The Vanguard ISA presents an affordable way to invest in a vast range of index funds, ETFs (exchange-traded funds), and blended funds. Looking at the competition, Vanguard's ISA offering stands out because of: Low platform costs and cheap ongoing fund charges.

Is Vanguard the lowest fees? ›

Vanguard's mutual funds and ETFs aren't just low cost; they're significantly less expensive than the industry average. Vanguard's average expense ratio is 0.09%. The average expense ratio across all mutual funds and ETFs is 0.49%, according to an August 2021 study from investment researcher Morningstar. Admiral Shares.

Why is Vanguard so cheap? ›

While many of these other companies are either corporate-owned or owned by third parties, Vanguard is owned by its funds, which are owned by its investors. This means that the profits generated by operating the funds are returned to investors in the form of lower fees.

Who gives the best ISA rates? ›

The best easy access ISA rates
  • Shawbrook Bank. Account: Easy Access Cash ISA - Issue 25. ...
  • Tesco Bank. Account: Instant Access Cash ISA. ...
  • Cynergy Bank. Account: Online ISA (Issue 40) ...
  • Post Office Money® Account: Online ISA - Easy Access Issue 39. ...
  • Newcastle BS. Account: Newcastle Double Access ISA (Issue 1) ...
  • Paragon Bank. ...
  • Coventry BS.
Aug 17, 2023

Who is offering the best ISA rates? ›

Top one-year fixed rate ISAs
ProviderAccount nameInterest rate (AER)
United Bank UK1 Year Fixed Rate Cash ISA5.77%
Hodge Bank1 Year Fixed Rate Cash ISA (Online Only)5.72%
Charter Savings Bank1 Year Fixed Rate Cash ISA5.72%
Aldermore1 Year Fixed Rate Cash ISA5.71%
1 more row

Where is the best place for an ISA? ›

Top five ready-made stocks and shares ISAs
  • Fidelity Personal Investing Cost Focus Portfolios* ...
  • HSBC Portfolio. ...
  • Evestor. ...
  • Barclays Investment ISA. ...
  • Trading212 ISA. ...
  • Vanguard ISA. ...
  • AJ Bell. Best for: Those who want low cost and a wide choice of investments. ...
  • IWeb. Best for: No annual platform fee.

Who is Vanguard's biggest competitor? ›

Vanguard's competitors

Fidelity Investments (also known as FMR) is a provider of financial services and investment resources. Merrill Lynch is a company providing wealth management and financial services. TIAA is a provider of financial services in the academic, research, medical, cultural, and government fields.

How do I avoid $20 fee Vanguard? ›

Individual 401(k) & Individual Roth 401(k) plans

$20 for each Vanguard mutual fund in each account. We'll waive the fee for all participants in the plan if at least one participant has at least $50,000 in qualifying Vanguard assets.

What happens if Vanguard goes bust? ›

Vanguard is paid by the funds to provide administration and other services. If Vanguard ever did go bankrupt, the funds would not be affected and would simply hire another firm to provide these services.

Does Vanguard have lower fees than Fidelity? ›

Fidelity mutual fund costs can vary, but they often have expense ratios that are higher, especially for active funds. It's no surprise that Vanguard is cheaper here, as the firm offers many of its own funds to clients. In regards to account fees, Vanguard charges a $20 annual fee for brokerage and IRA accounts.

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