Hey Ryan,

This is an email that I never thought I would write.

It certainly wasn't on my 2024 bingo card (not that I have one of those).

Vanguard UK are increasing their fees.

And it unfortunately disproportionately negatively impacts those with smaller investment pots. 

Let me give you the full details.

I hope everyone had a nice Christmas too (and sorry if this is the first time you're hearing this bad news about the Vanguard fee increase).

Vanguard have always charged a platform fee of 0.15%.

Ever since I've been using them anyway, which was from 2018. 

If you have £1,000 invested you would pay £1.50 in platform fees.

£1,000 multiplied by 0.15% = £1.50 in yearly platform fees.

However, from 31 January 2025, they are introducing a new platform fee model.

They will now be charging £4 per month for those who have <£32,000 invested across their Stocks & Shares ISA, SIPP and General Investment Account. 

Now, on £1,000 invested you would be paying £48.

£47.50 more than before.

£48 isn't a bank-breaking amount in absolute terms.

That's 7 pints of Guinness in London if you're lucky. Or what I would call a Thursday evening.

But it is a massive % fee, relatively speaking.

£48 on a £1,000 portfolio is a huge 4.8% fee.

When it comes to fees its useful to think about them in % terms. 

On a £10,000 portfolio it gets slightly better. But you're still paying a higher fee from 31 January 2025 onwards.

Previously at 0.15% you would've paid £15 in platform fees.

Now you'll pay £48. But this £48 is relatively speaking a 0.48% platform fee on the actual amount you have invested. Over triple what you would pay on the old model.

Once you get to £32,000 invested, you go back on the old 0.15% platform fee.

To be clear - you only pay one platform fee.

• <£32,000 invested = £4 per month or £48 per year
• >£32,000 invested = 0.15% per year

The reasoning for this is because at £32,000, a £48 fee is exactly 0.15%.

This is a nightmare, especially for those with <£10,000 invested with Vanguard as they will be more negatively impacted.

The closer you are to £0 invested, the more negatively impacted you are.

The closer you get to £32,000, the less negatively impacted you are on this new model. 

I've made a few pieces of longer form content on this if you're interested in hearing more in depth discussion:

• Youtube video - The full details of the Vanguard fee increase, including how the maths of it works and who is most impacted
• Youtube video - Which platform to use instead/which platform to switch to and exactly how you can switch
• Podcast episode - The details, the maths, should you switch and more

I've been using Vanguard since 2018 and have always strongly recommended them.

However, for those just starting out - exactly like I did many years ago with £100 per month - it just doesn't make much financial sense anymore.

On £100 per month invested, a £4 per month platform fee is a huge 4% fee each month. 

This is a crazy high fee, especially when we can use a 0% platform like Trading212 or InvestEngine (more on those in a sec).

Don't get me wrong, Vanguard are still a great platform.

Low fee (when you get to >£32,000 invested), great for long term passive investors, 2nd largest asset manager in the world making them very safe and reputable.

I'm going to be sticking with them myself as fortunately I have >£32,000 invested with them.

However for those who are looking to start investing and open up an account starting from £0, or those who are already investing and have <£10,000 on the Vanguard UK platform, you're going to be paying high platform fees.

Vanguard have always brought down fees for regular people since the 70's and were 'for the little guy'.

So it's a shame they've increased their fees and it will negatively impact those with small portfolios the most.

What should you do?

In all honesty, if you fit the criteria I aligned just above, then you're better off using another platform like Trading212 or InvestEngine.

I run through those platforms, their features, their differences and how to switch to them in the second Youtube video linked further above.

You will be better off to use one of those platforms and save yourself some fees, then you can always switch to Vanguard down the line if you wanted to.

If you are interested in signing up or switching, use these links for some extra free money:

• Trading 212 - get a free share
• InvestEngine - get a cash bonus of between £20-£100.

For full transparency these are referral links so I'll get a kickback too. I appreciate anyone who uses them.

If you don't use mine, make sure you use someones as it's literally free money for signing up.

Another common question I received was regarding funds.

Many Vanguard investors use either the FTSE Global All Cap (like myself) or the Lifestrategy funds.

Unfortunately these funds aren't available on Trading212 or InvestEngine.

In terms of the FTSE Global All Cap, VWRP (or the FTSE All World) is a similar option on both platforms.

In terms of the Lifestrategy funds, Trading212 don't have anything similar. But InvestEngine do have their Life Plan funds which are similar (and actually better).

This was a lengthy email but one that I hope was helpful.

Check out the Youtube/Podcast links above if you want further details on this Vanguard fee increase.

If you have any questions feel free to respond to this email and let me know. I'd be happy to help you out. 

And if you need further guidance or more detailed support one-on-one we can arrange a call - give me a shout.

Have a great New Year.

All the best,

Ryan