Cheap ISA Platform that do not require a credit check

ggleno

Afternoon all,


I have spent the last 5 years paying off some serious debt. Thankfully I am now in a position to invest the money that I had previously used to pay off the debt. I want to invest in Vanguard Lifestrategy. I aim to get close to maxing out my isa each year and note that for larger fund portfolios a flat rate charge would be better than a percentage fee. Halifax Share Dealing have the cheapest platform at £12.50 per annum.


Halifax share dealing have informed me that require a credit check to use their platform. The problem is because of my previous debt my credit score has been shot to pieces. I can't even open up a new bank account because it didn't make it past the credit check. I believe iweb is the next best offer although it does have a hefty one off £200 charge, but this is also a subsidiary of Halifax so I'm not sure if they will also require a credit check.


I was accepted my H&L and Fidelity through Cavendish. H&L 0.45 fee is quite high in comparison while Cavendish is low, though overtime it will eat into my investments.


Do I have any options here or will I just have to go with whoever will take me without a credit check?


Many thanks

TrustyOven

Maybe you have misunderstood what they meant?
It's not like you can take out a loan with an ISA provider / platform..

I would think it's more to do with money laundering regulations or for tax purposes (ISA, therefore they need your NI number and to check with HMRC that you are eligible to hold one).

Isn't Halifax more expensive that most for small sums? So the 0.45% you are talking about, on (initially) small sums might be smaller than the Halifax flat fee?

ARandomMiser

Congratulations in paying down your debts.
They may do a credit check but i don't think that would necessarily prevent you from saving. Try phoning their help line or use the online chat to see if you can get more info from your preferred platform. Good luck.

bowlhead99

Presumably when you're talking about investing the money that you'd previously been using to pay off debts, you mean money that's becoming available to you monthly from salary etc. If you use a provider that charges a small fixed annual fee like Halifax, be aware that you would also need to pay a transaction charge/ dealing cost every time you actually buy something with the money you have put into the platfrom. So if those "buys" are every month or every quarter, that's 12 or 4 doses of the transaction fee each year to add onto the nominal annual amount.

You might find that starting with relatively low average annual assets over the first few years you'd get a lower overall price by using a platform that charges a small percentage of your annual assets, but doesn't charge further fees every time you want to buy more units of the fund. Percentage based is not too bad if the fixed fees would have come out at a higher actual number. It all depends how much and how often you're buying.

As for the credit check, with products that don't allow credit or margin (such as ISAs), your score may be irrelevant, as it's largely just a way of proving your identity. Being cynical, of course that wouldn't stop Halifax deciding they didn't want your business if they thought they'd be stuck giving you this low fee investment service and never be able to cross-sell other products. But generally you shouldn't have anything to fear.