Vanguard UK review

How we rated Vanguard's investment features

Vanguard straddles the line somewhere between DIY investing platform and robo-advisor. That’s because you can choose to pick individual funds yourself, opt for pre-packaged funds (made out of multiple funds) or get matched with a ready-made portfolio based on your goals and risk appetite.

Excuse the pun(s), but it’s the flagship brand when it comes to index fund investing and if passive investments float your boat, you’ve probably heard of Vanguard before.

What is Vanguard?

Vanguard is an investment platform with 50 million investors worldwide. It has over 85 funds to choose from, covering stocks and bonds.

Founder of Vanguard, Jack Bogle, essentially created the concept of passive index funds. After making its mark in the US, Vanguard’s highly anticipated move into the UK was a successful one and since launching in 2017, it’s increased the investment options and account types available to investors.

Hands-on test: I tried out Vanguard's investing app

"Vanguard may not be the slickest operator, but it’s not the clunkiest to use either. Recently adding an investing app has helped drag Vanguard into the modern age, but much like the desktop platform – it’s pretty basic. If you want an all-singing, all-dancing app, this platform may not be for you. But, if you like to keep your investment portfolio interactions simple, Vanguad is pretty straightforward. You can manage all your accounts in one spot, which is really helpful if you happen to hold multiple accounts like a stocks and shares ISA and perhaps a self-invested personal pension (SIPP) on there.

Packed with exciting insights and thrills Vanguard is not. Instead of a daring action movie, Vanguard is more like a 3 hour period drama. But if you’re sold on the idea that investing should be boring, and your plan is to passively invest in a selection of Vanguard funds, then you can’t go wrong with its solid and functional approach of facilitating that style with the dekstop platform and new mobile app."

George Sweeney, DipFA

Deputy editor

Vanguard fees

Low fees and providing value to investors is Vanguard’s whole schtick. Part of the reason it’s such a popular platform is because of the low fees, both to hold an account with Vanguard and the ongoing costs for its funds.

It doesn’t cost you anything to open an account with Vanguard and there’s no additional fee to use one of the tax-efficient wrappers. If you build your own portfolio of funds, there’s a 0.15% annual fee (based on the size of your portfolio and capped at £375 per year).

There’s no commission to buy or sell funds on Vanguard, however there will be some form of ongoing fee attached to funds which can vary depending on the type of fund and the complexity of assets held.

If you decide you want to use the managed ready-made portfolios with your stocks and shares ISA or self-invested personal pension (SIPP), you’ll pay an additional 0.3% on top of the standard 0.15% platform fee.

The only other fund fee to watch out for is the £7.50 “quote and deal” service if you want to buy or sell an exchange-traded fund (ETF) at its live price. This means if you want to trade Vanguard ETFs at live prices, you’re probably better off using a cheap or commission-free platform rather than going direct through Vanguard.

Vanguard investment choice and stocks

With Vanguard, you can only invest in funds created and run by Vanguard, no other brand of funds are available.

Also, a key downside is that there’s no individual stocks or other assets available outside of index funds, ETFs and ready-made portfolios (made up of, you guessed it, funds).

You’re probably sick of hearing the word “funds” by now. Well, if that is the case, Vanguard might grind your gears. But if fund investing is your cup of tea, Vanguard is one of the best places to put your money to work.

On most platforms, Vanguard’s ETFs and funds are regularly the most popular amongst investors and a big reason for that is the low ongoing fees attached.

You do need a £500 lump sum to kick things off, or a regular monthly investment of £100. But once you’re set up and the ball is rolling, you can make one-off investments with just £1 for a fractional share of a fund, or drop your monthly investment down to £25.

Is Vanguard safe and legit?

Vanguard is regulated by the Financial Conduct Authority (FCA). It also comes with Financial Services Compensation Scheme (FSCS) protection. So your deposits of up to £85,000 are covered should Vanguard go bust.

Keep in mind that the FSCS protection doesn’t cover the value of your investments dropping. Vanguard is also a highly reputable brand with over $7 trillion (around £5.5 trillion) in assets under management.

Although as always when you invest, your capital is at risk.

Vanguard account types and products

Vanguard shines when it comes to the account types and products available. It offers a wide range of accounts and tax wrappers for no additional charge. All accounts come with the same, simple pricing structure to keep things straightforward.

With Vanguard you can choose from:

• Stocks and shares ISA. Invest up to your annual allowance (£20,000 for the 2023/2024 tax year) without paying any tax on your profits.
• Junior ISA (JISA). Invest in your child’s future up to the JISA allowance for the year (£9,000 for the 2023/2024 tax year)
• General investment account (GIA). Invest without any limits; good for those who have used up their ISA allowance for the year.
• Self-invested personal pension (SIPP). Invest in your retirement and benefit from tax relief on your contributions.

Vanguard stocks and shares ISA

A stocks and shares ISA is typically a good place to start if you’re new to investing as there are tax benefits that you don’t get with general investment accounts. All investments up to £20,000 in the 2023/2024 tax year are tax-free.

• Choose which funds go into your stocks and shares ISA from 85 options or go with the ready-made fund portfolios.
• If you’re not sure what to invest in, you can pay an extra 0.3% fee to choose from one of 5 managed portfolios.
• No charges to switch holdings, deal, make payments or exit.
• Flexible stocks and shares ISA.

Junior ISA

The junior ISA (JISA) allows you to invest in your children’s future. You can invest £100 per month or transfer an existing junior ISA over to Vanguard.

• You can invest up to £9,000 in the 2023/2024 tax year tax-free.
• While only a parent or legal guardian can set it up, friends and family can contribute money to the ISA – great for those over-enthusiastic aunties or grandparents.
• The child will get full access when they turn 18.
• Choose a ready-made portfolio or build it yourself.

Vanguard general investment account

The general investment account is a good option if you’ve used up your ISA allowance for the year or have paid into ISAs elsewhere within the current tax year. There isn’t a limit to how much you can invest in a general investment account but your profits are taxable.

• Choose which funds go into your general investment account. You can choose a ready-made portfolio or DIY it.
• Any profit you make over £6,000 in each tax year is taxable.

Self-invested personal pension (SIPP)

Vanguard’s SIPP allows you to save for retirement. You can choose to invest £100 per month, start with a £500 lump sum or transfer pensions that you already have with other providers.

• You can choose from over 85 funds including the ready-made portfolios designed specifically for retirement – we explore these below.
• As with all pensions, there are tax benefits such as tax relief on your contributions.
• Enjoy the savings when you are 55 years old (rising to 57 in 2028).

Ways to invest with Vanguard

With Vanguard, you have a choice between ready-made portfolios and building your own portfolios.

Ready-made portfolios. These are off-the-shelf portfolios, managed by Vanguard experts.
DIY portfolios. Choose between 85 funds and build a portfolio yourself.
Managed portfolios. Available with the SIPP or investment ISA, get matched with one of 5 portfolios.

Vanguard LifeStrategy and Target Retirement funds

Vanguard’s 2 key ready-made options are:

1. LifeStrategy. There are 5 options to choose from, with a portfolio split between bonds and stocks.
2. Target Retirement. There are 11 options to choose from, you select a target retirement date and get a portfolio split between bonds and stocks based on your timeframe.

LifeStrategy

You can choose to have one of the following portfolio allocations:

• LifeStrategy 20% equity. Made up of 20% stocks and 80% bonds
• LifeStrategy 40% equity. Made up of 40% stocks and 60% bonds
• LifeStrategy 60% equity. Made up of 60% stocks and 40% bonds
• LifeStrategy 80% equity. Made up of 80% stocks and 20% bonds
• LifeStrategy 100% equity. Made up of 100% stocks

Target Retirement

These funds are organised slightly differently because the allocation is based on your chosen retirement date but it essentially just means a varied allocation between stocks and bonds with slightly more nuance and ranging from 2015 to 2065 in 5 year increments.

Vanguard ease of use

Vanguard scored so-so in our ease of use assessment, it doesn’t offer the same kind of features and user experience that most modern platforms have, but it did recently add a long-awaited mobile app. The mobile app is pretty basic in terms of functionality (but so is the Vanguard desktop platform). The only key limitation with the mobile app compared to the desktop platform right now is that you can’t buy ETFs on mobile just yet.

There are a few ways to get hold of the customer support team, which is great. And if you opt to pay more for one of the managed portfolio options, you also get the chance to ring up and ask a person about your investment strategy or questions about your portfolio – a nice touch.

Vanguard customer reviews

In the 2024 Finder customer satisfaction survey, 90% of Vanguard customers said they’d recommend the platform. Several felt Vanguard was transparent about its fee structure and costs were low – or at least reasonable.

One customer said: “Very easy to deal (with). Quick, and low commissions.”

Another commented: “It is a good digital experience; they have a lot of funds to choose from; you can build your own or choose one of theirs. Their charges are OK; they have good analyst reports.”

Trustpilot reviewers gave Vanguard a decent 4.1 out of 5 “Great” rating (as of September 2024).

Vanguard tools, resources and features

Vanguard doesn’t offer a lot in this department. The whole concept behind the platform is simplicity and so you won’t find a great deal of tools or resources here.

If you want in-depth stock analysis or tools for investing, you should probably check out a share trading platform that offers more.

Whereas if you’re someone who likes things straightforward and to the point, and you’re happy to do your investing research elsewhere – the lack of features may not bother you.

Who might Vanguard suit?

This platform is going to be best-suited for those who want a simple and effective way to invest in Vanguard funds. Investors who don’t mind not having access to a fancy app or investment funds from other companies will find plenty of value here.

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

Frequently asked questions

• How much can I start with?

  You can start investing from £100 per month. You can also start with a £500 lump sum.

• How do I withdraw my money?

  This will depend on whether the money you plan to withdraw is invested. If it’s not, you can withdraw it on your portfolio page. Select “Money out”, then choose “Withdraw cash”.
  If it’s invested, you need to select “Sell” from the “Portfolio options” menu on the Secure Account page.

• Does Vanguard offer advice?

  On the best coffee shop in London? If you ask nicely, maybe. Financial or investment advice? No. Vanguard is not authorised to give investment or financial advice.

• Does Vanguard offer a junior SIPP?

  No, this is not a product that Vanguard offers at the moment.

• Does Vanguard provide a tax statement?

  Yes. Vanguard can provide an annual tax statement and a summary of your investments. This can help you fill out your tax return for investments that aren’t in an ISA.

• Does Vanguard offer annuities?

  No, Vanguard does not offer annuities.

• Can I transfer my ISA to Vanguard?

  Yes. Vanguard does offer a transfer service for ISAs – get in touch with Vanguard to find out more.

• Can I transfer my pension to Vanguard?

  Yes. Vanguard can receive transfers from other UK registered pension schemes.

• Is Vanguard good for beginners?

  Yep, Vanguard is a good provider for beginners. It has a series of ready-made portfolios for beginners to choose between, and if you decide later that you want to try making your own portfolio, you can do that too.