Hargreaves Lansdown vs Interactive Investor 2026: Which Is Cheaper for Pension Drawdown?
HL cut its platform fee to 0.35% in March 2026. ii launched new flat-fee tiers. We compare costs at every pot size from £50k to £500k.
The 2026 Fee War: Two Giants Go Head to Head
In the first quarter of 2026, the two largest pension drawdown platforms in the UK made significant fee changes. Hargreaves Lansdown cut its platform fee from 0.45% to 0.35% from March 1, 2026, while Interactive Investor launched a brand-new fee structure with three flat-rate tiers starting February 1, 2026.
If you're opening a drawdown account or considering a transfer, the fee war between these two giants has never been more relevant. But which is actually cheaper for you? The answer depends entirely on your pot size, asset mix, and trading activity.
The Fee Changes: What Happened in Early 2026
Hargreaves Lansdown (March 1, 2026)
- Platform fee dropped from 0.45% to 0.35% per annum
- Fund dealing fee introduced: £1.95 per transaction (previously free)
- Share dealing fee cut from £11.95 to £6.95 per transaction
- Annual cap on share holdings in ISAs tripled from £45 to £150
The headline cut is significant, but it's partially offset by the new £1.95 fund dealing fee.
Interactive Investor (February 1, 2026)
- Core: £5.99/month (£71.88/year) — portfolios up to £100,000
- Plus: £14.99/month (£179.88/year) — no portfolio limit, lower fund dealing
- Premium: £39.99/month (£479.88/year) — free fund trades, lowest FX fees
Every plan bundles ISA, SIPP, and trading account into one fee. No separate pension charge.
Cost Comparison: Four Pot Sizes
Assuming a typical drawdown investor holding funds passively with minimal trading:
| Pot Size | HL Cost/Year | ii Cost/Year | Difference | Winner |
|---|---|---|---|---|
| £50,000 | £175 | £71.88 (Core) | ii saves £103 | ii |
| £100,000 | £350 | £71.88 (Core) | ii saves £278 | ii |
| £250,000 | £875 | £179.88 (Plus) | ii saves £695 | ii |
| £500,000 | £1,500 | £179.88 (Plus) | ii saves £1,320 | ii |
The pattern is stark: at every pot size, ii is cheaper — often significantly so. At £500,000, HL costs over eight times more than ii Plus.
What About Investment Choice?
Interactive Investor: 40,000+ investments including 3,000+ funds, 1,000+ ETFs, shares, and investment trusts. Strong breadth across ESG and thematic funds.
Hargreaves Lansdown: 14,000+ investments including 4,000+ funds, 1,900 ETFs, and 300 trusts. Fewer options, but backed by a premium research team with detailed fund ratings and the HL Select curated list.
For a passive investor choosing a simple diversified portfolio, both platforms work well. For someone wanting deeper research on income-producing funds (crucial in drawdown), HL's analyst coverage is a genuine advantage.
Drawdown-Specific Features
Both platforms charge £0 for drawdown setup and £0 annual drawdown fee. Neither charges for taking income.
Where they differ:
- HL offers integrated pension drawdown calculators and income-planning tools built into the platform
- ii provides a cleaner, simpler interface but with less drawdown-specific tooling
- HL has award-winning customer service with faster phone support
- ii offers family plans — up to 5 free linked accounts on Plus
Real-World Scenario: A £150,000 Drawdown Pot Over 20 Years
Interactive Investor (Plus):
- Platform fee: £179.88/year
- 20-year total platform cost: £3,597.60
Hargreaves Lansdown:
- Platform fee: £525/year (0.35% of £150,000)
- 20-year total platform cost: £10,500
Difference: £6,902 over 20 years. That's real money — equivalent to an extra year of comfortable retirement spending for many people.
When Hargreaves Lansdown Makes Sense
We're not saying ii is always better. HL wins in specific scenarios:
1. You want premium customer service. HL's phone support is generally faster and more knowledgeable. If you're age 70+, have complex circumstances, or don't feel confident managing your pot online, HL's human touch is worth something.
2. You want research-led investing. HL's analyst ratings on funds are detailed and updated quarterly. If you're considering specialist income funds, HL's research is a genuine edge. ii's research is more basic.
3. You value the investment experience. HL's mobile app and web platform are polished and intuitive. Their fund information is more detailed. For retirees who enjoy learning about their investments, HL offers more engagement.
4. You need drawdown-specific tools. HL offers integrated pension drawdown calculators and income-planning tools. ii is more generic in this area.
When Interactive Investor Wins
1. You want to minimise costs. ii is cheaper at every pot size. If fees matter to you — and they should, especially in drawdown where every pound compounds — ii is the default choice.
2. You're a passive investor. If you're buying a diversified portfolio and holding it, HL's research doesn't add much value. You don't need an analyst rating on a global equity tracker.
3. You want maximum fund choice. 40,000 investments vs 14,000 is significant if you're building a sophisticated portfolio.
4. You hold large balances. The £500,000 scenario shows ii at £179.88/year vs HL at £1,500/year. Over a 20-year retirement, that's a £26,400 saving.
What About Other Providers?
Of course, HL and ii aren't the only options. Vanguard remains the cheapest for pure fund-based drawdown at 0.15% (capped at £375). AJ Bell sits between the two at 0.25% with a £3.50/month cap on shares. And Fidelity offers 0.35% with strong research tools.
Use our fees and charges comparison to see how all providers stack up for your specific pot size.
Our Verdict
For most drawdown investors, Interactive Investor is cheaper at every pot size. At £100,000, ii costs 79% less than HL. That's too big to ignore.
However, if you value premium research, customer service, and a polished experience, HL remains a credible choice — just acknowledge you're paying a premium for it.
If you're uncertain, start with ii Core (£71.88/year) and move to HL only if you find ii's research inadequate. Most drawdown investors won't need to. But if you're the type who reads fund fact sheets and wants an analyst's perspective on which income funds suit your circumstances, HL's team is worth the cost.
The fee landscape in 2026 is more competitive than it's ever been. Use that to your advantage.
Capital at risk. The value of investments can go down as well as up. Past performance is not a guide to future performance. This article is for information only and does not constitute financial advice.