Investment platform Vanguard has introduced a minimum monthly fee of £4, driving up costs for investors with less in their portfolios.
Not every Vanguard investor will see their fees go up, but customers with less than £32,000 in investments will – and in some cases it's quite a substantial amount.
The changes will come into effect on 31 January 2025 and apply to all accounts, except the junior Isa and managed Isa.
Vanguard investors have weeks therefore to switch product, or to move to another platform entirely, or see fees go up.
Here, we look at what difference these changes could make, and what you can do to save.
Please note: the content contained in this article is for information purposes only and does not constitute financial or investment advice.
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This will depend on how much you have invested with them, and the scale of increase will be greatest for those with the least money invested.
If you have more than £32,000, you'll already meet the £4 monthly minimum anyway, so you won't need to pay any more.
But, an investor with £1,000 in their account, for example, will see a huge hike in what they need to pay in fees each year, up from £1.50 to £48.
How much money you have invested
Old account cost
New account cost
£1,000
£1.50
£48
£5,000
£7.50
£48
£10,000
£15
£48
£25,000
£37.50
£48
£50,000
£75
£75
For £1,000 invested with Vanguard, you’d need to make returns of at least 4.8% or you’ll make less than you’ll pay in fees. That's what is required to break even, so you'd need to make more than that to come away with any of the returns made on your investments.
Ben Summers, head of Vanguard's UK personal investor services, said: 'We are committed to helping individuals throughout their investment journey – from starting out to achieving their lifetime goals. The introduction of the minimum fee is necessary to help us cover the rising cost of serving our clients. It will also enable us to continue investing in new features, products and services.'
In its previous fee structure, Vanguard was the cheapest provider in our survey for investors with £50,000 or less to invest. Now, it’s part of a group of more expensive fixed-fee providers.
Note: Comparing platforms covered in our January 2024 survey. Account fee for funds or exchange-traded funds, whichever is cheaper for that size of portfolio, not transaction or foreign exchange costs
How can you save on fees with Vanguard?
Vanguard’s minimum fee does not apply to its managed Isa, in which investments are picked for you based on your response to questions about risk appetite and goals.
Vanguard has also decreased the management fee on their managed Isa from 0.3% to 0.2%, which is paid on top of the account fee of 0.15%.
The fees are higher than what was previously charged on its stocks and shares Isa and investment accounts, but substantially less than £48 for smaller portfolios. For an investment of £1,000, this option would cost £3.50.
But, you wouldn’t be able to choose where to invest your money. For some, this is a positive as it takes away decision-making stress, especially if you’re a beginner. However for others, losing control of your choices might be an unwelcome change.
To convert to a managed Isa, you'd just need to select the 'managed Isa we do it for you' section on their website and log in using your normal details. Then, fill out the questionnaire and your investment plan is produced.
Which? Recommended Provider
Is Vanguard still a Which? Recommended Provider?
Vanguard remains a Which? Recommended Provider (WRP) of stocks and shares Isas for 2024-25.
When we work out which brands are WRPs, we survey customers to see how satisfied they are with the service and how they'd rate different elements of its service.
In our last survey in January 2024, Vanguard was rated very highly and wasn't among the top 25% most expensive of the platforms we rated, a key criteria.
As Vanguard's new fees still don't make them among the 25% most expensive platforms, they remain a WRP.
This could change when we publish our 2025-26 WRPs in March, either because Vanguard's customers give different scores, or because the list of brands with scores changes.
If you want to pick investments yourself and don't want to pay Vanguard's new fees, you could switch your investments across to another cheaper provider.
For general investment accounts, you’ll have to sell your investments to cash and transfer the cash out then close your account.
But, for a stocks and shares Isa, you might be able to stay invested and ask Vanguard to move your investments across to another platform directly. This is called an ‘in-specie’ transfer and prevents you from losing out in the window between selling and buying.
You can only do an in-specie transfer if the platform you're moving to offers the same Vanguard funds you're invested in now.
To start a transfer, contact the platform you want to move to and complete its transfer form. They should take care of the rest within 30 days, and you can chase them up if there are any delays.
Some platforms are running offers, including cashback and temporary fee waivers, but you shouldn’t base your choice on these. Instead, prioritise choosing a platform with low fees and good customer service over the brief benefits of an introductory offer.
