Freetrade quietly raises fees for Isa account holders

Freetrade quietly raises fees for Isa account holders meaning customers will now pay 66% MORE… while Plus customers can now open a Sipp

  • Freetrade has introduced a new standard subscription for its users  
  • Isa holders will now pay an extra £1.99 a month 
  • Its Plus customers will now be able to open a Sipp free of charge

Products featured in this article are independently selected by This is Money’s specialist journalists. If you open an account using links which have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence. 

Freetrade has quietly introduced a new fee structure meaning customers with a stocks and shares Isa will be hit with a 66 per cent rise in fees.

In a recent update to customers, Freetrade said the fee change structure was an ‘evolution of [the] freemium model’ and the new plans were ‘value-packed’.

There are now three subscription plans for Freetrade. Previously there were just two plans – Basic and Plus – with an extra cost of £3 per month for an Isa and £7 for a self-invested pension (Sipp).

Customers who have opened an Isa with Freetrade will have to pay an additional £2 a month 

The basic plan, which is unchanged, is free for all with access to a general investment account, commission-free trades and access to over 1,500 global stocks and ETFs.

The biggest change is the introduction of a standard subscription which costs £4.99 and includes an Isa, as well as the full access to 6,000 stocks which was not available before.

That means Freetrade customers who previously paid £3 a month for an Isa will have to pay an additional £1.99 a month if they want to keep their account – or £23.88 over the year.

Some customers on social media who have opened an Isa with Freetrade have already expressed frustration at the price increase.

A spokesperson for the company said customers will have a 60 day grace period in which customers consider whether they want to pay the extra £1.99 or move to a Basic plan.

The Plus subscription, which is unchanged at £9.99 a month, now includes a Sipp which was previously £7 alone. 

Customers will also earn 3 per cent interest on uninvested cash, up to a maximum of £4,000 with Plus and Freetrade is currently testing recurring orders in a beta version for Plus customers.

Adam Dodds, founder, said: ‘Our refreshed subscription plans offer customers a huge amount of value in a brokerage market that is still dominated by established players charging fixed commissions on each trade. 

‘Not only are such costs a barrier for those looking to begin investing, they create an enormous drag on a portfolio over time.’ 

The price rises come after a strong year for the investment app. Registered users in the UK reached more than 1.3million and revenue increased more than sixfold to £15.1million.

It means Freetrade* is starting to seriously compete with the likes of Hargreaves Lansdown*, AJ Bell* and Interactive Investor*.

AJ Bell this year launched its long-trailed new investment platform Dodl, which is cheaper than its traditional platform and charges no commission for buying and selling investments. 

Its offering is considerably smaller than Freetrade’s with just 50 UK shares and 30 funds currently.

Interactive Investor also recently slashed its share and fund dealing charges to stay competitive.

From 1 September, the standard online dealing charge for UK and US trades will be cut from £7.99 to £5.99 for ii’s standard Investor plan* as well its Pension Builder Sipp plan.

Despite becoming one of the most popular DIY investment apps among young investors, Freetrade was forced to implement a wave of redundancies that impact 15 per cent of its staff in June.

It came just weeks after Freetrade raised £30million through a loan agreement as it looks to continue its European expansion.

It is understood that the recent price changes have been in the pipeline since last year and have not been affected by these recent developments.

You can check out Freetrade’s new subscription plan fees on its website.  

Compare the best DIY investing platforms and stocks & shares Isa

Investing online is simple, cheap and can be done from your computer, tablet or phone at a time and place that suits you.

When it comes to choosing a DIY investing platform, stocks & shares Isa or a general investing account, the range of options might seem overwhelming. 

Every provider has a slightly different offering, charging more or less for trading or holding shares and giving access to a different range of stocks, funds and investment trusts. 

When weighing up the right one for you, it’s important to to look at the service that it offers, along with administration charges and dealing fees, plus any other extra costs.

To help you compare investment accounts, we’ve crunched the facts and pulled together a comprehensive guide to choosing the best and cheapest investing account for you. 

We highlight the main players in the table below but would advise doing your own research and considering the points in our full guide linked here.

>> This is Money’s full guide to the best investing platforms and Isas 

Platforms featured below are independently selected by This is Money’s specialist journalists. If you open an account using links which have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence. 

Admin charge Charges notes Fund dealing Standard share, trust, ETF dealing Regular investing Dividend reinvestment
AJ Bell YouInvest* 0.25%  Max £3.50 per month for shares, trusts, ETFs.  £1.50 £9.95 £1.50 £1.50 per deal  More details
Bestinvest* 0.40%  Account fee cut to 0.2% for ready made investments Free £4.95 n/a n/a More details
Charles Stanley Direct 0.35%  No platform fee on shares if a trade in that month and annual max of £240 Free £11.50 n/a n/a More details
Fidelity* 0.35% on funds £45 fee up to £7,500. Max £45 per year for shares,  trusts,  ETFs Free £10 Free funds £1.50 shares, trusts ETFs £1.50 More details
Hargreaves Lansdown* 0.45% Capped at £45 for shares, trusts, ETFs Free £11.95 £1.50 1% (£1 min, £10 max) More details
Interactive Investor*  £119.88 as £9.99 per month £7.99 per month back in trading credit £7.99 £7.99 Free £0.99 More details
iWeb £100 one-off £5 £5 n/a 2%, max £5 More details
Freetrade* Free for standard account £3 month for Isa  Freetrade Plus with more investments is £9.99/month inc. Isa fee No funds  Free  n/a  n/a  More details 
Vanguard  0.15%   
Only Vanguard funds
Free  Free only Vanguard ETFs  Free  n/a  More details 
(Source: June 2022. Admin charges quoted annually, may be monthly or quarterly)