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Flat Fee vs Percentage Fee: Why Your ISA Platform Costs More Than You Think

A 0.25% platform fee feels trivial. At £200,000, it is £500 per year — every year, forever. Here is how to calculate the crossover point and which platform structure wins at your portfolio size.

By Sarah Chen3 June 20257 min read

Direct Answer

ISA platforms with percentage fees become expensive as your portfolio grows. Flat-fee platforms like AJ Bell Dodl (£12/year) are almost always cheaper above £25,000. Always calculate platform fee plus fund TER together; never compare platform fees alone.

The ISA fee question looks simple: how much does the platform charge per year? But the answer changes entirely depending on how much money you have in the account, and most comparison tables never show you the crossover point.

How percentage fees scale — and when they hurt

A platform charging 0.25% per year feels cheap at £10,000 — that is £25. At £100,000, it is £250. At £500,000, it is £1,250 per year, every year, permanently. If your money compounds at 7% annually, you are handing away 3.6% of annual gains to the platform before you receive a penny.

The flat-fee case

AJ Bell Dodl charges £1 per month for a Stocks & Shares ISA — £12 per year regardless of balance. At £10,000, that is 0.12%. At £50,000, it is 0.024%. At £200,000, it is 0.006%. The crossover from percentage to flat-fee favourability generally occurs around £20,000–£30,000 on most platforms.

What comparison tables miss

Fund fees are separate from platform fees. A platform charging 0.25% can still give you access to ETFs at 0.07%. A 'free' platform offering only high-cost funds (0.75% OCF) may be more expensive in total. Always calculate platform fee plus fund TER as a combined figure. Never compare platform fees alone.

Disclaimer

This article is for informational purposes only and does not constitute financial advice. Platform fees change frequently. Always check current pricing with providers directly.

FAQ

Which ISA platform is cheapest for a £50,000 portfolio?

AJ Bell Dodl's £12/year flat fee is very competitive above £20,000. Vanguard Investor (0.15% capped at £375) is cheaper below £80,000 for Vanguard-only investors. Always add the fund TER to your platform comparison.

Does SIPP fee structure work the same way?

Yes — the same flat vs. percentage logic applies. SIPPs often have additional admin charges for drawdown and pension commencement lump sum processing, so compare total cost including those events, not just annual custody.

Author
S

Sarah Chen

CFA, ex-Morningstar