Hargreaves Lansdown has cut the fees on its Junior and Lifetime Isas to encourage young people to increase their savings.
The platform announced today (March 10) it has removed all platform fees, trading commission and currency charges for all existing and new Junior Isa accounts.
From March 13 there will also be no trading commission and FX charges for online lump sum trading.
Regular savings fees, dividend reinvestment and telephone dealing charges will all remain.
Hargreaves Lansdown has also reduced the fund and equity platform fee for its Lifetime Isa from 0.45 per cent to 0.25 per cent.
The first £1mn of fund investments will therefore be charged at 0.25 per cent, with all equity investments charged at 0.25 per cent, capped at £45 per annum.
This applies to all Lifetime Isa accounts and is a permanent change.
Ruchir Rodrigues, chief client and commercial officer at Hargreaves Lansdown said the provider recognises the need to encourage younger generations to save and invest to improve their financial resilience.
“We can see parents and grandparents are withdrawing cash to support their children and grandchildren during these challenging times.
“We believe this to be the most important tax year end not only in a generation, but also for generations.”
However, Mark Polson, principal of investment consultants at the Lang Cat, said though price cuts are a good thing, this reprice is at the expense of another segment of customers.
“Is HL really saying the costs of servicing a Jisa and Lisa are different enough from a standard Isa to justify those products being free and the standard Isa still costing 45 bps?
“If you’re going to cut prices, that’s great, but make sure those cuts are fair and proportionate across the board.”
The big price difference between Hargreaves Lansdown and other platforms was always defensible on service grounds, he added.
“However, as the gap has widened on price it’s narrowed on service due to digitisation of more and more processes and other providers simply stepping up their game.”
Chief executive officer of Boring Money, Holly Mackay, said the changes are attractive for customers, as the 0.45 per cent fee was looking “relatively expensive”.
“This is a tweak which bows to pricing pressure without making a huge dent on revenues,” she said.
“This is undoubtedly a pricing sprat to try and catch the bigger customer mackerel.”
sally.hickey@ft.com
