In the burgeoning world of investment and pensions apps, Interactive Investor has carved out a slice of both sectors.
There are other platforms available with ready-made investment portfolios to make pension planning easy. Likewise, there are online stockbrokers for general investment. But some people want more control over their retirement investments, and this is where ii (as it is often referred to) is ahead of the curve.
Interactive Investor in a nutshell
ii is an online investment platform offering a variety of services, including fund investing, share dealing, ISAs, and SIPPs for pensions. Founded in 1995, it has since grown to become the second largest investment platform, behind Hargreaves Lansdown. In 2021, abrdn acquired the platform, although it continues to function as a standalone business with its own branding.
Today, ii claims to be the UK’s top flat-fee investment platform with more than 400,000 customers and over £50 billion in assets under administration. As you would expect, it is regulated by the FCA, and investments are protected by the FSCS.
The platform is clearly geared towards customers with significant capital to invest. There is no minimum investment threshold but its fees start to make it attractive for portfolios over £50,000.
What are the pension plans like?
The possibilities are almost endless here and depend on your own experience and comfort level with making investment decisions.
At the starter end, Interactive Investor offers 6 “Quick-start funds.” This includes a choice of pensions funds to match attitudes to risk and personal goals. There are 3 passive funds from Vanguard and 3 active/sustainable funds with Columbia Threadneedle to choose from.
It also offers a range of model portfolios, selected and managed by Morningstar.
The ii Super 60 includes active and passive funds, investment trusts and ETFs. The ii ACE 40 selection take a similar structure but focusses on building a sustainable portfolio.
Alternatively, you can build up your own pension portfolio through the many shares, funds, investment trusts, ETFs, and Bonds and Gilts available. For investors taking this route, ii provides analysis, tips, and articles to help on your journey.
What are the pension plan fees like?
What makes ii stand out is its flat fees. Other services take a percentage of your savings. This means that as your pension pot grows, so too do the fees you pay.
With ii, you pay £12.99 a month. There are other offers available if you choose to combine a pension account with an ISA or Trading account.
That amount could be high if you are only just starting a pension. However, pensions are a long-term investment and depending on your starting point, ii’s fees could be a saver.
Data has shown that over 30 years, an initial £100,000 pot with £10,000 added annually, would come out £94,800 cheaper at ii than Standard Life. For anyone looking to put away those kinds of amounts, it is clearly on to something.
Having signed up to a flat fee you can then opt for its regular investing service too. Investing a minimum £25 a month, you can trade in up to 25 shares and funds with no further fees. Above this, trades normally cost £5.99.
There are charges related to a few transactions, in particular Forex. You should make sure you read carefully if this is something you plan on doing.
So, is Interactive Investor a good pension app?
ii does a good job of bringing general investments and retirement savings all into one place.
Competitor Nutmeg offers a similar product but its overall ratings indicate that flashy publicity doesn’t necessarily convert into a good user experience, with a poor 3.7 on TrustPilot.
However, depending on your ambitions and goals, ii might not live up to expectations.
An overhaul of its website at the start of 2023 looks nice but can be clunky to drill down into details. While the app is aimed at retail investors, if you are used to that kind of data then you may find it frustrating. For beginner investors there is enough to get started on but for many a market screener such as TradingView will be necessary.
Similarly, if you only need a pension provider and want ready-built portfolios, you might look elsewhere. We recently reviewed PensionBee which offers a quality service with a simple, user-friendly interface.
Is Interacive Investor the right pension platform for you?
Interactive Investor gets a solid 4.7 on TrustPilot. The biggest “con” that comes up are the fees. The platform really is designed for those with larger amounts to invest and under 50k won’t cut it. Its recent website change has also drawn some criticism but this can be quite subjective.
Overall, we found ii is very much geared towards less-experienced investors. Pensions and long term investments can be tricky to judge, as we have written about before. If you have the time and inclination, then the platform provides a lot of useful information and analysis.
For more experienced users, the platform offers a good investment service, but you will probably still want a second market screener. For beginners who want to do a little investing on the side while setting up their pensions, Interactive Investor is worth a look.
Author: Mike Davies
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