Lightyear Stocks & Shares ISA review

This low-cost platform offers ETFs and individual shares

Lightyear is an investment provider with an app that offers a Stocks & Shares ISA at no extra cost. It offers DIY investing, so you choose your own investments from its collection of shares and exchange-traded funds (ETFs). 

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Here at Be Clever With Your Cash, we’re not regulated to give you financial advice. We aim to give you the facts about a provider or investment but it’s up to you to decide if it’s suitable for you. If you’re looking for more personalised guidance, find a financial adviser who can give you specific advice. Remember that your capital is at risk when investing — don’t invest more than you are prepared to lose. 

What is the Lightyear Stocks & Shares ISA?

The Lightyear Stocks and Shares ISA is a free account available to invest into. It allows you to use your £20,000 ISA allowance, so you can invest without paying any tax on your earnings. 

The ISA is flexible, which means you can withdraw from it and replace the money within the same tax year without losing that amount of your allowance. However, ideally you’re not investing money that you’ll need to access – this money should stay invested for at least five years to allow for the fluctuations of the stock market. 

You can transfer existing Cash ISAs or Stocks & Shares ISAs into Lightyear, however these are done as cash, so any existing investments you have will be sold prior to the transfer to Lightyear, where you’ll have to repurchase investments again. The money stays within the ISA wrapper throughout. 

What you can invest in with Lightyear

Lightyear offers individual stocks and exchange-traded funds that you can invest in. 

Exchange-traded funds are funds that are bought and sold on stock markets. These are a low-cost way to invest in a diversified mix of investments, so you wouldn’t need to choose a huge range of individual shares to make up your portfolio, and can instead choose several ETFs. 

There are 5,000 global stocks available, including more than 3,000 US stocks. They’re well organised, so you can choose specific sectors or countries you want to invest in. 

Lightyear fees

Lightyear’s fees depend on what you decide to invest in.

Investment type	Cost
US stocks	0.1% — min $0.10 / max $1 max per transaction
UK stocks	£1 per transaction
EU stocks, bonds, ETNs and ETCs	€1 per transaction
ETFs	Free

There’s also a 0.35% currency conversion fee for when you buy stocks in other currencies. 

Lightyear doesn’t charge an account fee or to use the ISA. Transfers in and out are free, but there’s a 0.5% charge for ‘fast transfers’, which are ones using Google/Apple Pay or by debit card. 

While it’s free to buy and sell funds, you’ll still have to pay fund fees when invested in funds. These will be between 0.03% and 0.78% depending on the funds you choose and you’ll come across them no matter what provider you choose. 

Features for beginner investors

While Lightyear’s app and easy-to-use interface can be appealing to beginners, investing in individual stocks isn’t for beginner investors. However, beginners can passively invest in exchange-traded funds. There’s a lot of information offered about the investments, which could be a bit overwhelming for beginners, but does give you the chance to learn.

There aren’t any ready-made options — if you’d prefer a hands-off approach to investing, you might prefer a robo-advisor or provider that offers ready made portfolios. 

Is Lightyear safe?

Lightyear is regulated by the Financial Conduct Authority (FCA). 

Your cash and investments are covered by the Financial Services Compensation Scheme (FSCS) up to £85,000. Plus, your money is ring-fenced, so it’s kept separate from Lightyear’s own money — it doesn’t use your money for its own business use.

How to open a Lightyear Stocks & Shares ISA

You can open a Lightyear Stocks & Shares ISA online or in the app. On the website or after you’ve downloaded the app, you select ‘Sign up’. You’ll then create a login and provide some simple personal information. 

Then it’ll ask you which account you want to open – at this stage you’ll choose the Stocks & Shares ISA. 

At this stage, you’ll be asked for your citizenship information and your National Insurance number. 

Pros and cons of Lightyear

Pros

• No fees for ETFs
• Low cost investing
• No extra cost for ISA
• Large range of investment options

Cons

• No ready-made options
• Could be a little overwhelming for beginners

Lightyear reviews

Over on our sister site, Smart Money People, Lightyear customers have rated the provider 4.9 out of 5. 

Positive reviewers say that it’s easy to use, that it pays interest on uninvested cash and feel like there’s a large range of investments available.  

 Negative reviewers, of which there aren’t many, don’t think the customer service is up to scratch and one mentioned that they don’t like the gamification of the platform

Read customer reviews of Lightyear

Is Lightyear any good?

Zoe’s analysis

All in all, Lightyear is a pretty good investment provider. It’s got a great range of investments available, its app and user interface is really sleek and attractive, and the fact that it offers free investing in ETFs is great.

Other investments are really low-cost at just £1/$1/€1. There are obviously some platforms that offer stock investing for zero commission, like Trading 212 and Freetrade, although this is still a lot less than some of the bigger players, like Hargreaves Lansdown. 

Beginners might be turned off by Lightyear because it doesn’t offer ready-made options — there are lots of alternative providers that offer these.