Consolidating ISAs could save £6,396 in fees over five years
interactive investor calculations show that investors could save thousands by consolidating multiple ISA accounts.
3rd March 2025 15:34
by Myron Jobson from interactive investor
- A lot has been said about the benefits of consolidating various pension pots - and for good reason. The same principle applies to ISAs
- The calculations assume investment growth of 5% per annum and a funds portfolio split equally between interactive investor, Hargreaves Lansdown, and AJ Bell
- While investors can’t control the returns they achieve, they can control how much they pay for investment platforms
- Myron Jobson, interactive investor’s Senior Personal Finance Analyst, explores the reasons for ISA consolidation and offers practical tips.
As the financial spring-cleaning season approaches ahead of tax year end, new calculations by interactive investor, the UK’s second-largest DIY investment platform, show that investors could save thousands by consolidating multiple ISA accounts under one provider.
- Learn with ii: How to become an ISA millionaire | ISA Investment Ideas | Top ISA Funds
While much has been said about the benefits of consolidating pensions, the advantages of consolidating ISAs remain largely overlooked, despite offering cost benefits and efficiencies.
Since ISAs were introduced in 1999, replacing PEPs and TESSAs, many investors have accumulated a patchwork of different accounts over the years. Changes in providers, new product offerings and better interest rates may have resulted in a scattered mix of ISAs held across various banks and investment platforms.
While this approach might have made sense at the time, managing multiple ISAs now means juggling different rules, statements, and fees - making it harder to track savings and ensure they’re working as effectively as possible.
New research by interactive investor shows that investors with a funds portfolio worth £100,000, split equally between three providers, could save £858 over five years, years by consolidating into a single account with interactive investor, which charges a flat fee.
This assumes investment growth of 5% per annum and a £33,333 investment in funds across: Hargreaves Lansdown (which levies an annual charge of 0.45% on the first £250,000); AJ Bell (which charges 0.25% annually on the first £250,000 of investments in a funds account); and interactive investor (which charges £4.99 per month for sums up to £50,000 and £11.99 per month for portfolio over than amount).
The savings rise to £3,197 and £6,396 for consolidated portfolios totalling £250,000 and £500,000, respectively. The savings for a consolidated portfolio worth £75,000 is £538.
The percentage platform fees are applied on a yearly basis, and they do not factor in trading costs. The calculations are for illustrative purposes only to show the benefits of consolidating multiple ISA into interactive investor. Other trading behaviours will result in different charges than those shown.
The savings are also significant on over a year: £91; £149; £583 and £1,167 for consolidated portfolios worth £75,000; £100,000; £250,000 and £500,000, respectively (under the same assumptions).
Platform fee savings from consolidation of ISAs into one account with interactive investor
Time period | Overall portfolio | Size of portfolio held with each provider | HL (0.45%) | AJ Bell (0.25%) | ii (£4.99/11.99) | Total fees | Fees if whole portfolio with ii | ii consolidation savings |
1 year | £75,000 | £25,000 | £113 | £63 | £60 | £235 | £144 | £91 |
£100,000 | £33,333 | £150 | £83 | £60 | £293 | £144 | £149 | |
£250,000 | £83,333 | £375 | £208 | £144 | £727 | £144 | £583 | |
£500,000 | £166,667 | £750 | £417 | £144 | £1,311 | £144 | £1,167 | |
5-year | £75,000 | £25,000 | £616 | £343 | £299 | £1,258 | £720 | £538 |
£100,000 | £33,333 | £821 | £458 | £299 | £1,578 | £720 | £858 | |
£250,000 | £83,333 | £2,053 | £1,145 | £719 | £3,917 | £720 | £3,197 | |
£500,000 | £166,667 | £4,107 | £2,290 | £719 | £7,116 | £720 | £6,396 |
Source: interactive investor. Assumes investment growth of 5% per annum. The percentage platform fees are applied on a yearly basis, and they do not factor in trading costs. The calculations are for illustrative purposes only to show the benefits of consolidating multiple ISA into interactive investor. Other trading behaviours will result in different charges than those shown.
Myron Jobson, Senior Personal Finance Analyst at interactive investor, says: “A lot has been said about the benefits of consolidating various pension pots - and for good reason. The same principle applies to ISAs.
“For many investors, ISAs are like a messy drawer - scattered across different providers, each charging their own fees, making it harder to keep track of performance. Consolidating multiple ISAs into a single account isn’t just about tidying up; it can lead to significant cost savings, greater efficiency, and better oversight of your investments.
“Percentage-based charging means the more you invest, the higher your fees. In contrast, a flat fee remains constant and predictable. For larger portfolios, the difference between flat fees and percentage-based charges can be striking. If your ISA portfolio is worth tens of thousands of pounds, switching to a flat-fee provider could be a game-changer.
“While investors can’t control the returns they achieve, they can control how much they pay for investment platforms.”
interactive investor’s new ISA comparison tool
To help encourage transparency on fees and charges, and to help consumers better compare – interactive investor has launched a new ISA comparison tool.
Users can enter the value of their investment portfolio to see how fees compare between interactive investor and other major providers over different time frames. Cookies need to be enabled to use the tool.
Myron Jobson explores reasons and tips for ISA consolidation
Lower fees
“Many investors hold legacy ISAs with providers that charge high platform fees. By consolidating, you could significantly reduce the drag on your returns - especially for larger portfolios.”
Make your ISA life simpler
“You can now contribute to as many ISAs as you like without breaking tax rules, as long as your total contributions remain within the £20,000 annual allowance. However, managing multiple ISAs across different providers makes tracking performance, fees, and contributions unnecessarily complex. Consolidating your ISAs under one provider simplifies management, making it easier to rebalance and align your investments with your financial goals.”
You can consolidate different types of ISAs
“If you’ve built up multiple ISAs over the years - perhaps a mix of Cash ISAs, Stocks & Shares ISAs, or even an Innovative Finance ISA - you may not realise that you can consolidate them into a Stocks & Shares ISA to simplify management and potentially improve long-term returns.
“If you’re comfortable with investment risk, transferring old Cash ISAs into a Stocks & Shares ISA could give your money a better chance to grow, especially over the long term. However, it’s still essential to keep a cash buffer for emergencies - typically three to six months’ worth of essential expenses - so you’re not forced to sell investments at an inopportune time.
“ISA transfers don’t count towards your £20,000 annual allowance, so you can move past subscriptions freely while maintaining your tax-free status.”
Exit properly
“Before making the switch, always check exit fees from your current providers. Ensure that the transfer is done via an ISA transfer rather than withdrawing and re-depositing funds, as doing so would cause you to lose your tax-free benefits.”
How to choose the right investment platform
“Not all investment platforms are created equal and choosing the right one can make a significant difference to your returns. Fees should be a top priority - flat fees tend to work best for larger portfolios, while trading costs also matter, especially if you plan to buy and sell regularly.
“Beyond costs, consider whether the platform offers the funds, ETFs, or shares you need. Ease of use is another crucial factor - a clunky interface can make managing your money unnecessarily complicated.”
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