Scottish Friendly review

How we rated Scottish Friendly's investment features

Scottish Friendly is one of the largest mutual investments organisations in the UK, and was set up in 1862. As a mutual, it’s accountable to its members rather than shareholders.

It’s a bit of an oddball compared to other investing platforms. For example, it only offers ISAs and has a limited range of funds. It also has quite an unusual way of charging fees. Find out more about what this provider offers.

Scottish Friendly fees

Scottish Friendly is quite expensive compared to other providers. When you invest in one of its funds, you pay a 4% “entry fee” each time. This isn’t a common charge but instead of commission fees, it means 4% of each investment is already gone before you get started.

Then, the platform fee is charged as a 1.5% annual management fee. Again, this is steep and more in line with what you’d pay a personal wealth manager or financial advisor. This does reduce to 0.5% with the “My Prime ISA” if you invest at least £100 a month and your portfolio is worth more than £2,000.

On top of these fees, you’ll also pay ongoing fund fees depending on the option you choose.

Scottish Friendly investment choice and stocks

Scottish Friendly has a limited range of investments. With these 2 accounts there are 10 funds to choose from:

• My Choice ISA
• My Prime ISA

The 10 funds on offer range in risk from lower to higher and are called:

1. Guaranteed Cash fund
2. UK Government Bond fund
3. Unitised With-profits fund
4. Lower fund
5. International Company Bond fund
6. Medium fund
7. Higher fund
8. UK Tracker fund
9. UK Active fund
10. International Ethical fund

As you can see, most funds have a heavy weighting towards bonds or UK equities, with only the ethical fund investing in global companies.

Speaking of ethical, the My Ethical Choice ISA, lets you invest only in one fund – the International Ethical fund (also the highest risk on Scottish Friendly’s scale).

Finally, the My Easy Choice ISA lets you invest only in the Unitised With-profits fund. This account also comes with a unique benefit, if you don’t make any withdrawals or switch out of the fund over 10 years, Scottish Friendly will guarantee you’ll have as least as much as you put in.

Is Scottish Friendly safe?

Scottish Friendly is regulated by the Financial Conduct Authority (FCA). Deposits are covered by the Financial Services Compensation Scheme protection. So your deposits of up to £85,000 are covered in the event that Scottish Friendly goes bust.

Because Scottish Friendly is a mutual and not a public company, it looks out for the interest of its members rather than its shareholders.

Like any other type of investment, your capital is at risk when you invest using Scottish Friendly and you may end up with less than what you originally invested. The performance of investments will vary, and there is no guarantee of return.

Scottish Friendly account types and products

Scottish Friendly is pretty limited in terms of accounts. Again, going against the grain, it only offers ISA products.

With Scottish Friendly, you can use a:

• Stocks and shares ISA
• Junior ISA (JISA)

To spice things up, Scottish Friendly splits its investment ISA into a few different product types that come with slight differences.

Scottish Friendly ISAs

The Scottish Friendly stocks and shares ISA lets you invest up to your annual ISA allowance and shield potential profits from most taxes.

With Scottish Friendly, you can invest from as little as £10 a month (or a lump sum of £100), so long as you have not paid into another investment ISA in the same tax year. In the 2024/2025 tax year, you can save or invest up to £20,000 across all your ISAs.

Within the investment ISAs, Scottish Friendly offers 4 ISA types to choose from:

• Easy Choice ISA. A single fund choice with a guaranteed minimum cash lump sum on your 10 year anniversary (as long as you don’t switch or make any withdrawals). You get a welcome gift when you start investing.
• My Choice ISA. Choose between 10 funds based on your risk appetite and get a welcome gift when you get started. Has an annual management charge of 1.5% of the fund value, which is deducted daily. Fund costs are on top.
• My Prime ISA. Invest a monthly payment of £100 or a lump sum of £2,000 into a range of 10 funds, ranging from low to high risk. You can also make investment pots for different goals. Has an annual management charge of 1.5% of the fund value (plus fund costs), but this drops to 0.5% if you maintain an active payment schedule.
• My Ethical Choice ISA. You can invest in a single international ethical fund and get a welcome gift when you get started. Has an annual management charge of 1.5% plus fund costs.

Scottish Friendly junior ISA

At Scottish Friendly, members and their children are encouraged to gain a financial headstart and invest in their futures.

With the JISA, you can provide your children with a helpful cash sum for their future. This can give them a head start to purchase their first property, travel, or pay their university costs.

You can invest up to £9,000 per year in a JISA in one of 9 funds without having to pay any UK tax on most profits.

Annoyingly, Scottish Friendly has another unique stipulation that if money is withdrawn before 5 years, a £50 deduction fee is charged. This makes the Scottish Friendly JISA less flexible than other options.

Scottish Friendly ease of use

Scottish Friendly scored quite well in our ease of use assessment. However, we don’t like that there are only 2 ways to contact the customer service team. Also, trying to find information (especially around fees) is very confusing – even for us experts.

The Scottish Friendly app appears quite popular with customers although there’s a limited number of reviews available. On the App Store, Scottish Friendly scores a 4.3 out of 5, and on Google Play it has a 4.5 out of 5 from over 2 million reviews (as of February 2024).

Scottish Friendly’s website and app are pretty clunky, the company has been around for over 150 years, and it’s starting to show. For the high fees it charges, it’s a shame that nothing is reinvested into the customer experience.

Scottish Friendly customer reviews

Trustpilot reviewers gave Scottish Friendly a 3.6 out of 5 “average” rating (as of February 2024) from over 2,500 reviews.

Scottish Friendly tools, resources and features

Scottish Friendly has a rudimentary offering when it comes to investing tools and additional features. This isn’t a platform where you can do lots of analysis and research on investments.

Who might Scottish Friendly suit?

This platform is going to be best-suited for those who only want to use an ISA and are happy with a limited choice of ready-made account options.

If that’s not you, why not compare share trading platforms to find the right fit to match your style.

Frequently asked questions

• How do I withdraw from Scottish Friendly?

  In “My Plans”, click “more info” beside the policy you want to withdraw from. Under the “actions” heading, click “make a withdrawal”.

• How do I contact Scottish Friendly?

  You can call on (UK) 0333 323 5433 or (Eire) 1890 987 919. Lines are open 8.30 am – 5.30 pm, Monday to Friday.

• How do I cancel my Scottish Friendly account?

  Once you have set up a My Options policy within a Scottish Friendly ISA, you can change, stop, decrease or top up your contributions online by selecting “My Plans” or write to Scottish Friendly to request a change.