Top 8 Cheapest Online Brokers in the UK 2024
Dom Farnell
Co-Founder
Dom, a Co-Founder at TIC, is an avid investor and experienced blogger who specialises in financial markets and wealth management. He strives to help people make smart investment decisions through clear and engaging content.
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Please bear in mind that trading involves the risk of capital loss. 51% to 84% of retail investor accounts lose money when trading CFDs with the providers below. You should consider whether you can afford to take the high risk of losing your money.
Quick Answer: The Cheapest Online Brokers in the UK are?
The cheapest online brokers in the UK are Lightyear and Pepperstone, offering commission-free trading with minimal fees. Both provide robust trading platforms, a diverse range of assets, and are well-regarded for their cost-effectiveness and user-friendly features.
Here are Our Top 8 Low Cost Online Brokers in the UK:
- Lightyear – Cheapest Mobile-First Stock Broker in the UK
- Pepperstone – Best Low-Cost Broker for Forex and CFD Trading
- Spreadex – Best Low-Cost Spread Betting Broker in the UK
- eToro – Best Social Trading Platform with Low Fees
- Interactive Investor – Best Low-Cost Broker for High Volume Traders
- AvaTrade – Best Low-Cost Broker for Beginner Traders
- Saxo – Best Advanced Trading Platform with Tight Spreads
- IG – Best Comprehensive Trading Tools with Variable Spreads
What Does This Page Cover?
- How do These Trading Platforms Compare?
- What are the Top 7 Trading Platforms for Beginners
- What Is a Trading Platform and Why Do Beginners Need One?
- How Do I Choose the Best UK Trading Platform for Beginners?
- How Do I Open a UK Trading Account Step-by-Step?
- How Do I Buy Shares Online in the UK as a Beginner?
- How Does Regular Investing Work for Beginners in the UK?
- References
- FAQs
Evaluating the Top Low-Cost Brokers
To bring you the top recommendations for the cheapest brokers in the UK, we embarked on an exhaustive research and evaluation journey. Our analysis involved a comprehensive review of multiple brokers, focusing on several essential aspects. These aspects included the security protocols they employ, the functionality and performance of their trading platforms, the variety of assets they offer, their fee structures, the availability of demo accounts, and the quality of their customer service.
Essential Criteria for Evaluation
- Range of Tradable Assets: Evaluating the breadth of investment options provided by each broker.
- Minimum Deposit Requirements: Identifying brokers with the lowest initial investment thresholds.
- Fee and Commission Structures: Assessing the overall cost-effectiveness of trading with each broker.
- Demo Accounts: Checking the availability of practice accounts for new traders.
- Client Fund Protection: Ensuring robust insurance mechanisms for client funds.
- Trading Software: Reviewing the usability and performance of each broker’s trading platforms.
- Regulatory Compliance: Confirming that brokers adhere to stringent regulatory standards.
Our summarized findings below highlight the key features and benefits of each broker, providing you with a comprehensive comparison. This will aid you in selecting the most suitable and cost-effective broker in the UK that aligns with your trading needs and preferences.
How do These Low-cost Brokers Compare?
| Broker | Commission | Fees | Account Types | Minimum Deposit | Spread | Key Features | Tradable Assets |
|---|---|---|---|---|---|---|---|
| Lightyear | 0% on stocks | None | General investment | £1 | Tight spreads on US and EU stocks | Mobile-first platform, simple fees | Stocks, ETFs |
| Pepperstone | 0% on US stocks | None | General investment, ISA | None | Starting from 0.0 pips on major forex pairs | Multiple platforms, social trading | Forex, CFDs, cryptocurrencies, indices, commodities |
| Spreadex | Varies by asset | £1/month inactivity fee after 3 months | General investment, Spread betting | £1 | Competitive spreads starting from 0.6 pips | Competitive spreads, leverage | Stocks, ETFs, forex, indices, commodities |
| eToro | 0% on real stocks | $5 withdrawal fee, $10/month inactivity fee after 12 months | General investment, ISA | $50 | Variable spreads starting from 1 pip on major forex pairs | Copy trading, user-friendly | Stocks, ETFs, cryptocurrencies, indices, commodities |
| Interactive Investor | £3.99 – £5.99 | £9.99/month account fee | General investment, ISA, SIPP | £1 | Competitive spreads, exact values not disclosed | One free trade/month, large share access | Stocks, ETFs, funds, trusts, bonds |
| AvaTrade | 0% on stocks | $50 inactivity fee after 3 months, $100 administration fee after 1 year | General investment | $100 | Variable spreads starting from 0.9 pips on major forex pairs | Multiple platforms, social trading | Forex, CFDs, stocks, cryptocurrencies, commodities |
| Saxo | From £8 per trade | $100 inactivity fee after 6 months | General investment, ISA, SIPP | £500 | Tight spreads starting from 0.4 pips | Advanced platforms, wide investment options | Stocks, ETFs, forex, options, futures, bonds |
| IG | £8 per trade, £3 if >3/month | £12/month inactivity fee after 2 years | General investment, ISA, SIPP | £250 | Variable spreads starting from 0.6 pips | Advanced tools, education | Stocks, ETFs, forex, indices, commodities, options |
What are Our Top 8 Cheapest Broker Picks?
Lightyear: Mobile-first platform, commission-free, simple and transparent fee structure, access to US and EU stocks.
Lightyear Pros and Cons
- Commission-free trading on stocks for cost-effective investing
- Simple and transparent fee structure ensures no hidden costs.
- Mobile-first platform for convenient trading on the go.
- Limited to US and EU stocks, restricting global diversification.
- No advanced trading tools available, limiting for experienced traders.
- Relatively new platform, potentially less proven reliability.
Capital at risk.
What are the Fees?
- Commission: 0% on stocks.
- Fees: None.
- Minimum Deposit: £1.
- Spread: Tight spreads on US and EU stocks.
What Key Features are Available?
- Key Features: Simple and transparent fee structure, mobile-first platform, access to US and EU stocks.
What Account Types are Available?
- Account Types: General investment.
Pepperstone: Multiple trading platforms, commission-free US stocks, tight spreads, and strong social trading partnerships.
Pepperstone Pros and Cons
- Commission-free trading on US stocks, reducing costs.
- Tight spreads starting from 0.0 pips on major forex pairs for better value.
- Multiple trading platforms (MT4, MT5) for flexible trading options.
- No commission-free options for non-US stocks.
- Inactivity fee may apply, which could be a disadvantage for infrequent traders.
- Limited educational resources compared to some competitors.
Capital at risk.
What are the Fees?
- Commission: 0% on US stocks.
- Fees: None.
- Minimum Deposit: None.
- Spread: Starting from 0.0 pips on major forex pairs.
What Key Features are Available?
- Key Features: Access to 250+ stock CFDs, multiple trading platforms (MT4, MT5), social trading partnerships.
What Account Types are Available?
- Account Types: General investment, ISA.
Spreadex: Wide range of markets, competitive spreads, spread betting options, and low minimum deposit.
Spreadex Pros and Cons
- Wide range of markets to trade, offering extensive options.
- Competitive spreads starting from 0.6 pips for cost-effective trading.
- Low minimum deposit requirement, making it accessible for beginners.
- Inactivity fee after 3 months, which could affect casual traders.
- Varied commission structure may be confusing for new traders.
- Limited advanced trading tools compared to specialized brokers.
What are the Fees?
- Commission: 0% on US stocks.
- Fees: None.
- Minimum Deposit: None.
- Spread: Starting from 0.0 pips on major forex pairs.
What Key Features are Available?
- Key Features: Access to 250+ stock CFDs, multiple trading platforms (MT4, MT5), social trading partnerships.
What Account Types are Available?
- Account Types: General investment, ISA.
64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
eToro: User-friendly, social trading, commission-free stocks, and access to multiple global markets.
eToro Pros and Cons
- User-friendly interface for easy navigation and trading.
- Social trading features allow copying of successful traders.
- Commission-free stocks trading for cost-effective investing.
- Variable spreads can be higher than some competitors.
- Inactivity fee after 12 months, which could impact occasional traders.
- Limited to $50 minimum deposit, potentially restricting very small investments.
What are the Fees?
- Commission: 0% on real stocks.
- Fees: $5 withdrawal fee, $10/month inactivity fee after 12 months.
- Account Types: General investment, ISA.
- Minimum Deposit: $50.
- Spread: Variable spreads starting from 1 pip on major forex pairs.
What Key Features are Available?
- Key Features: Access to 17 stock markets, copy trading feature, user-friendly platform.
What Account Types are Available?
- Account Types: General investment, ISA.
64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Interactive Investor: One free trade per month, comprehensive investment options, competitive commissions, and fixed monthly fee.
Interactive Investor Pros and Cons
- One free trade per month, adding value for active traders.
- Access to over 40,000 shares, offering extensive investment options.
- Competitive commissions for frequent traders.
- Monthly account fee of £9.99, which could be high for low-volume traders.
- Complex fee structure may be difficult for beginners to understand.
- Limited customer support hours, which could be inconvenient for some users.
What are the Fees?
- Commission: £3.99 – £5.99.
- Fees: £9.99/month account fee.
- Minimum Deposit: £1.
- Spread: Competitive spreads, exact values not disclosed.
What Key Features are Available?
- Key Features: One free trade per month, access to over 40,000 shares, fixed account fee.
What Account Types are Available?
- Account Types: General investment, ISA, SIPP.
Capital at risk.
AvaTrade: Multiple platforms, social trading features, commission-free stocks, and access to global markets.
Avatrade Pros and Cons
- One free trade per month, adding value for active traders.
- Access to over 40,000 shares, offering extensive investment options.
- Competitive commissions for frequent traders.
- Monthly account fee of £9.99, which could be high for low-volume traders.
- Complex fee structure may be difficult for beginners to understand.
- Limited customer support hours, which could be inconvenient for some users.
What are the Fees?
- Commission: 0% on stocks.
- Fees: $50 inactivity fee after 3 months, $100 administration fee after 1 year.
- Minimum Deposit: $100.
- Spread: Variable spreads starting from 0.9 pips on major forex pairs.
What Key Features are Available?
- Key Features: Access to 600+ global stocks, multiple trading platforms, social trading features.
What Account Types are Available?
- Account Types: General investment.
Capital at risk.
Saxo: Advanced trading platforms, tight spreads, wide range of investment options, and high-quality research tools.
Saxo Pros and Cons
- Advanced trading platforms with comprehensive tools and features.
- Tight spreads starting from 0.4 pips for better value.
- High-quality research tools to aid in informed decision-making.
- High minimum deposit of £500, which may be restrictive for beginners.
- Inactivity fee after 6 months, which could impact occasional traders.
- strong>Higher commission rates compared to some competitors.
What are the Fees?
- Commission: From £8 per trade.
- Fees: Inactivity fee of $100 after 6 months of inactivity.
- Minimum Deposit: £500.
- Spread: Tight spreads starting from 0.4 pips.
What Key Features are Available?
- Key Features: Advanced trading platforms, wide range of investment options, high-quality research tools.
What Account Types are Available?
- Account Types: General investment, ISA, SIPP.
Capital at risk.
OFFER: Open an account and receive up to £200 back in online trading fees* to help you get started.
IG: Comprehensive trading tools, variable spreads, wide range of instruments, and educational resources.
IG Pros and Cons
- Wide range of trading instruments for diversified investing.
- Comprehensive trading tools and educational resources.
- Reduced commission to £3 per trade if more than 3 trades per month.
- Monthly inactivity fee after 2 years, which could affect long-term dormant accounts.
- Higher commission of £8 per trade for less active traders.
- Higher minimum deposit of £250, which may not be ideal for all investors.
What are the Fees?
- Commission: £8 per trade, reduced to £3 if more than 3 trades/month.
- Fees: £12 monthly inactivity fee after 2 years.
- Minimum Deposit: £250.
- Spread: Variable spreads starting from 0.6 pips.
What Key Features are Available?
- Key Features: Wide range of trading instruments, advanced trading tools, educational resources.
What Account Types are Available?
- Account Types: General investment, ISA, SIPP.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Evaluating the Top Low-Cost Brokers
To bring you the top recommendations for the cheapest brokers in the UK, we embarked on an exhaustive research and evaluation journey. Our analysis involved a comprehensive review of multiple brokers, focusing on several essential aspects. These aspects included the security protocols they employ, the functionality and performance of their trading platforms, the variety of assets they offer, their fee structures, the availability of demo accounts, and the quality of their customer service.
Essential Criteria for Evaluation
- Range of Tradable Assets: Evaluating the breadth of investment options provided by each broker.
- Minimum Deposit Requirements: Identifying brokers with the lowest initial investment thresholds.
- Fee and Commission Structures: Assessing the overall cost-effectiveness of trading with each broker.
- Demo Accounts: Checking the availability of practice accounts for new traders.
- Client Fund Protection: Ensuring robust insurance mechanisms for client funds.
- Trading Software: Reviewing the usability and performance of each broker’s trading platforms.
- Regulatory Compliance: Confirming that brokers adhere to stringent regulatory standards.
Our summarized findings below highlight the key features and benefits of each broker, providing you with a comprehensive comparison. This will aid you in selecting the most suitable and cost-effective broker in the UK that aligns with your trading needs and preferences.
How to Select the Best Low-Cost Stock Broker
Evaluate Fees: Check trading commissions and additional charges like withdrawal or inactivity fees.
Assess Platform Usability: Ensure the platform is user-friendly with essential tools.
Check Asset Variety: Choose brokers with a diverse range of tradable assets.
Verify Customer Support: Ensure reliable and accessible support through multiple channels.
Review User Feedback: Analyse reviews from sources like Google Play, Trustpilot, and the App Store.
Selecting the best low-cost stock broker involves several key considerations. Firstly, evaluate the broker’s fee structure, including trading commissions and any additional charges such as withdrawal or inactivity fees. Brokers like eToro and Lightyear are known for their commission-free trading, which can significantly reduce costs.
Next, assess the trading platform’s usability and features. A user-friendly interface with robust tools is essential for both beginners and experienced traders. Platforms like IG and Saxo offer advanced trading tools that can benefit seasoned investors, while also providing intuitive interfaces that cater to novices.
Finally, consider the range of assets available for trading. A diverse selection of tradable assets allows you to build a varied investment portfolio. Brokers such as Interactive Investor and AvaTrade provide access to a wide range of stocks, ETFs, and other securities, ensuring that you can diversify your investments effectively.
How Do Discount Brokers Operate?
Discount brokers offer trading services at a lower cost by reducing operational costs and pass the savings onto their clients. Unlike full-service brokers who may provide personalized investment advice and portfolio management, discount brokers focus on executing trades efficiently.
One of the main advantages of using discount brokers is the significant reduction in fees and commissions. For example, Pepperstone offers commission-free trading on US stocks, making it an attractive option for cost-conscious investors. Additionally, these brokers often provide access to educational resources and tools that empower traders to make informed decisions independently.
However, the lack of personalized advisory services means that investors need to have a good understanding of the market and be comfortable making their own investment decisions. This can be a challenge for beginners, but the availability of demo accounts and educational materials can help bridge this gap.
Key Considerations Before Engaging in Stock Trading
Before starting stock trading, consider your investment goals and risk tolerance. Define your financial objectives to choose suitable stocks and strategies. For example, prioritize stable, long-term investments if saving for retirement.
Understand trading fees and commissions as they vary by broker. Compare fee structures from brokers like AvaTrade and Interactive Investor to minimize costs and maximize returns.
Ensure access to reliable market information and analysis tools. Robust platforms with advanced research tools, like IG and Saxo, provide valuable insights for informed decisions.
Understanding the Risks of Affordable Online Trading
Affordable online trading platforms increase investment accessibility but come with risks. Choose brokers regulated by reputable authorities like the FCA to protect your investments.
Market volatility is a significant risk. Lower-cost brokers attract new investors who may not understand market dynamics, leading to increased trading during volatile periods. Brokers like Interactive Investor and IG provide tools and resources to mitigate this risk.
The convenience of online trading can lead to overtrading. Excessive trades based on short-term market movements can result in higher costs and potential losses. Set clear goals and maintain a disciplined strategy to manage this risk.
How Do Commission-Free Trading Platforms Work?
Commission-free trading platforms allow investors to buy and sell stocks and other assets without paying traditional trading fees. These platforms have revolutionized the trading landscape by making it more accessible and affordable for everyone.
How Do Commission-Free Platforms Make Money?
Commission-free trading platforms generate revenue through various methods. One common approach is receiving payments for order flow, where platforms get compensated for directing trades to specific market makers or exchanges. Additionally, these platforms may have slightly wider spreads between the buying and selling prices of assets, indirectly charging users through these price differences. Another revenue stream comes from additional fees for services like premium account features, withdrawals, or inactivity. By leveraging these methods, commission-free platforms can maintain their operations while offering zero-commission trading to users.
Pros and Cons of Commission-Free Trading Platforms
- Lower Costs: No commission fees mean more of your money is invested.
- Accessibility: Lower barriers to entry attract new investors.
- Frequent Trading: Ability to trade more often without worrying about fees.
- Wider Spreads: The difference between buy and sell prices may be larger.
- Limited Services: Often lack personalized investment advice.
- Potential Overtrading: Easy access may lead to excessive trading and higher risks.
Conclusion
Choosing the right low-cost broker is crucial for maximizing your investment returns while minimizing expenses. By evaluating brokers based on fees, platform usability, asset variety, and customer support, you can find the best fit for your trading needs. Whether you’re a beginner or an experienced trader, the right broker can make a significant difference in your trading success.
Ready to start trading? Compare our top-rated low-cost brokers now and take the first step towards smarter, more cost-effective investing.
Seeking a platform with social features and competitive fees? Explore eToro’s unique offering.
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FAQs
A discount broker offers trading services at lower costs by providing fewer advisory services, focusing on efficient trade execution through automated platforms.
Commission-free brokers typically earn revenue through wider spreads, payment for order flow, and other fees like withdrawal or inactivity charges.
Yes, as long as they are regulated by reputable authorities such as the FCA, ensuring they adhere to strict security and financial standards.
Yes, many discount brokers offer educational resources and demo accounts to help beginners learn and practice trading without risking real money.
You can trade a variety of assets, including stocks, ETFs, forex, commodities, and cryptocurrencies, depending on the broker’s offerings.