Hargreaves Lansdown vs Interactive Investor: The Complete Fee Comparison for Drawdown

When you're getting ready to take money out of your pension pot, picking the right platform can make a real difference to how much of your hard-earned cash actually makes it to you. Two of the biggest names in the UK investment platform world are Hargreaves Lansdown and Interactive Investor. Both offer excellent services, but their charging structures for drawdown are quite different.

This article is going to break down those differences, especially their fees, so you can see which one might be better for your situation. We - ll look at the main ways they charge, figure out when each platform becomes more cost-effective, and even do some calculations to show you how those fees add up over 20 years. We'll also touch on things like what investments you can pick, how easy their websites are to use, and how flexible they are when you want to take money out.

Understanding the Basic Fee Structures

The first thing to understand is the fundamental difference in how Hargreaves Lansdown and Interactive Investor charge for keeping your pension investments in drawdown. It really comes down to a percentage versus a flat fee.

Hargreaves Lansdown: The Percentage Play

Hargreaves Lansdown (HL) charges a percentage of the value of your investments held on their platform. This means the more money you have, the more you pay in fees.

Here's a breakdown of their current drawdown charges for funds and shares:

• Funds:

  • 0.45% on the first £250,000

  • 0.25% on the value between £250,000 and £1 million

  • 0.10% on the value between £1 million and £2 million

  • Nothing on anything over £2 million

• Shares (and other assets like ETFs, investment trusts, and VCTs):

  • 0.24% with a maximum charge of £200 per year.

This means if you only hold shares in your drawdown pot, your platform fee is capped at £200 for the year, no matter how much you have. If you hold funds, the charges can be much higher and there's no cap until you reach £2 million. Many people hold a mix of both. When that happens, HL works out the fee for each type of investment and then adds them together.

It's important to remember these are platform fees only. You'll also pay ongoing charges for the funds themselves (called 'Ongoing Charges Figures' or OCFs) and dealing charges if you buy or sell investments frequently.

Let's look at an example:

Imagine you have £500,000 in a drawdown pot with HL, all invested in funds.

• First £250,000: £250,000 * 0.45% = £1,125

• Next £250,000: £250,000 * 0.25% = £625

• Total Annual Platform Fee: £1,125 + £625 = £1,750

If that £500,000 was all invested in shares:

• £500,000 * 0.24% = £1,200, but capped at £200 per year.

This shows how big a difference your investment choice makes on HL.

Interactive Investor: The Flat-Fee Approach

Interactive Investor (II) takes a different path, charging a flat monthly fee for their service. This means your platform fee doesn't go up as the value of your pension pot increases. It stays the same, regardless of whether you have £50,000 or £1 million.

Their main pension plan is called the Pension Builder, and it costs £12.99 per month.
This works out to £155.88 per year.

Like HL, this is just the platform fee. You'll still have ongoing charges for any funds you invest in and dealing charges. However, II does include one free trade per month in their plan, which can be useful if you're regularly rebalancing or adding new investments.

For example:

If you have £500,000 in drawdown with II:

• Total Annual Platform Fee: £155.88

If you have £1,000,000 in drawdown with II:

• Total Annual Platform Fee: £155.88

You can see the clear advantage for larger pots with II's flat fee.

The Breakeven Point: When Does Each Platform Win?

Now for the interesting bit: at what point does Interactive Investor's flat fee become cheaper than Hargreaves Lansdown's percentage-based charge? This 'breakeven' largely depends on how much you hold in funds versus shares with HL.

Let's simplify and assume you only hold funds with HL for this first comparison, as this is where HL's fees can really add up.

To find the breakeven, we pit HL's fund charges against II's £155.88 annual fee.

HL Fund Charges vs. II Flat Fee:

If HL charges 0.45% on funds, then to get to £155.88 in fees:

£155.88 / 0.0045 = £34,640

So, if you have around £34,640 or more invested purely in funds with HL, Interactive Investor's flat fee of £155.88 per year will likely be cheaper. Below this amount, HL would be cheaper for funds (e.g., £20,000 at 0.45% = £90 per year).

However, many people invest in a mix of shares and funds, or even just shares. Remember HL's share charge is capped at £200 per year.

HL Share Charges vs. II Flat Fee:

If you only hold shares (ETFs, investment trusts etc.) in your drawdown pot, then HL's maximum charge is £200 per year.

• HL maximum share charge: £200 per year.

• II flat fee: £155.88 per year.

In this scenario, if your portfolio is predominantly or entirely made up of shares, Interactive Investor is always cheaper once your share portfolio reaches a size where a 0.24% charge exceeds £155.88 (meaning £155.88 / 0.0024 = £64,950). Even below this, II is still cheaper than HL's maximum £200 charge.

Mixed Portfolio Scenario:

This is where it gets a bit more complex. Let's compare a few scenarios with specific portfolio sizes:

Portfolio Size HL (100% Funds) HL (50% Funds, 50% Shares) HL (100% Shares) ** II (Flat Fee) £50,000 £225.00 £112.50 (Funds) + £60.00 (Shares) = £172.50 £120.00 £155.88 £100,000 £450.00 £225.00 (Funds) + £120.00 (Shares) = £345.00 £200.00 £155.88 £250,000 £1,125.00 £562.50 (Funds) + £200.00 (Shares) = £762.50 £200.00 £155.88 £500,000 £1,750.00 £875.00 (Funds) + £200.00 (Shares) = £1,075.00 £200.00 £155.88 £1,000,000 £3,000.00 £1,500.00 (Funds) + £200.00 (Shares) = £1,700.00 £200.00 £155.88

**Assuming share portfolio value is above £83,333 for the £200 cap to apply. Below that, it's 0.24% of the share value.

Key takeaway on breakeven:

• For smaller pots (under ~£35,000 in funds, or under ~£65,000 in shares), HL can be cheaper.

• For larger pots (over ~£35,000 in funds, or over ~£65,000 in shares in the example table), Interactive Investor is generally significantly cheaper, especially if you have a lot of funds.

• If your portfolio is 100% shares or a very high proportion of shares, HL's £200 cap makes it more competitive, but II at £155.88 is still cheaper.

This comparison only accounts for platform fees. Dealing charges and fund OCFs will add to the overall cost for both.

Calculating 20-Year Costs: The Long Haul

When you're in drawdown, you might be taking an income from your pension for 20 years or even longer. Small differences in annual fees can really add up over that time. Let's imagine a scenario to illustrate this.

Scenario:

You start drawdown with a £500,000 pension pot. You withdraw £20,000 per year (4% of the initial pot). We'll assume the pot grows at 5% per year before fees and withdrawals. For simplicity, we'll assume the money is invested 50% in funds and 50% in shares. We'll also simplify HL's tiered fund fees a little to avoid overly complex calculations for the whole 20 years, but the principle holds.

• Initial Pot Size: £500,000

  • £250,000 in Funds

  • £250,000 in Shares

• Annual Withdrawal: £20,000

• Assumed Growth (before fees/withdrawals): 5% per year

Year Starting Pot HL Annual Fees (Funds) HL Annual Fees (Shares) HL Total Platform Fee II Total Platform Fee Ending Pot (HL) Ending Pot (II) 1 £500,000 £875.00 £200.00 £1,075.00 £155.88 £503,925.00 £504,844.12 5 £505,091 £890.30 £200.00 £1,090.30 £155.88 £508,829.35 £514,248.86 10 £513,991 £905.85 £200.00 £1,105.85 £155.88 £517,624.96 £528,784.81 20 £536,547 £942.50 £200.00 £1,142.50 £155.88 £540,624.32 £563,001.07

Estimated Total Platform Fees Over 20 Years (Simplified Example):

• Hargreaves Lansdown: Roughly £22,000 (average of £1,100 per year)

• Interactive Investor: £155.88 * 20 = £3,117.60

Difference: Over £18,000 in saved platform fees with Interactive Investor in this specific example! This is a significant amount that could have remained invested, potentially generating further returns.

Important Note: The 'Ending Pot' values are illustrative. Real-world returns, market fluctuations, and actual tiered fee calculations for HL would make it more complex. However, the calculation clearly shows that the flat fee model of II can lead to substantial savings over the long term for larger pots.

Beyond the Fees: Platform Features and Service

While fees are clearly a huge factor, they're not the only thing that matters. What else do you get for your money?

Investment Choice

Both platforms offer a massive range of investments, so you're unlikely to be caught short.

• Hargreaves Lansdown: Access to thousands of funds (including their own range of multi-manager funds), UK and overseas shares, ETFs, investment trusts, corporate and government bonds. They have a particularly strong range of passive (tracker) funds and actively managed funds.

• Interactive Investor: Similarly, you can access a very broad selection of UK and international shares, investment trusts, exchange-traded funds (ETFs), and funds.

You'll find pretty much any mainstream investment you'd want on either platform.

Platform Features and User Experience

This is where personal preference can come in.

• Hargreaves Lansdown: Generally considered to have one of the best user experiences. Their website is slick, easy to navigate, and full of useful content like research articles, fund factsheets, and expert analysis. They have a well-regarded app for managing your investments on the go. They also offer a huge amount of guidance, help, and investment ideas, which many people find really valuable, especially if they're new to investing or want more support.

• Interactive Investor: Their platform is also user-friendly and has improved a lot over the years. It's clean, functional, and provides good tools for monitoring your portfolio. They offer research and news, but arguably not quite as extensively curated as HL's. Their free monthly trade can be a nice perk for those who like to tinker a bit more with their portfolio.

Customer Service

Both providers offer phone and online support. HL historically has a reputation for very strong customer service, though recent years have seen some people report longer wait times, particularly during busy periods. II also has good customer service, with plenty of resources available online. It's often worth trying both to see which 'feel' you prefer if this is a priority for you.

Withdrawal Flexibility and Income Options

When you're in drawdown, getting your income easily and flexibly is key.

• Hargreaves Lansdown: Offers very flexible income options. You can set up regular withdrawals (monthly, quarterly, annually) or take ad-hoc lump sums. They have tools to help you manage your income and tax, and their platform makes it easy to see how much tax-free cash you have taken and how much remains.

• Interactive Investor: Also very flexible. You can arrange regular income payments or take one-off withdrawals. They provide clear breakdowns of your tax-free cash and taxable income.

With both platforms, you'll generally complete an online form to set up your income and can make changes easily through your online account.

When Each Provider Wins

To summarise, based on fees and other considerations:

Choose Hargreaves Lansdown if:

• You have a smaller drawdown portfolio (typically under £35,000-£65,000, depending on asset mix).

• You value extensive research, guidance, and a highly polished user experience over raw cost savings. HL's platform is perhaps more geared towards someone who wants more hand-holding or enjoys browsing investment content.

• You only hold shares (or a very high proportion of shares) in your drawdown pot up to the £200 annual cap. Even then, II technically has a lower overall fee.

• You are happy to pay a bit more for what you perceive as a premium service from a long-established brand.

Choose Interactive Investor if:

• You have a larger drawdown portfolio (typically over £35,000-£65,000, especially if you hold funds). The flat fee structure becomes significantly more cost-effective as your pot grows.

• You are confident in making your own investment decisions and don't need extensive hand-holding or daily research content.

• You prioritise keeping platform costs as low as possible to maximise your retirement income.

• You regularly trade and would benefit from the free monthly trade included.

• You hold a lot of funds, where HL's percentage charges can really eat into your returns.

Important Considerations

• Fund OCFs (Ongoing Charges Figures): Remember that our fee comparisons only looked at the platform fee. You'll also pay an annual management charge for the funds you invest in. These charges are often similar across platforms for the same fund, but it's always good to check.

• Dealing Charges: If you buy and sell investments frequently, dealing charges become more important. HL charges £11.95 per share or ETF trade (£5.95 for funds). II is £3.99 per trade for shares/ETFs (funds are free, and you get one free share/ETF trade per month). For very frequent traders, these differences can add up. Most people in drawdown aren't actively trading daily, though.

• Consolidating Pensions: If you have multiple old pensions, either platform can help you consolidate them into one drawdown pot, which often makes it much easier to manage.

• Seek Advice: This article is for information only and doesn't constitute financial advice. Deciding on the best drawdown strategy and platform is a big decision, and it's often a good idea to speak to a qualified financial adviser. They can help you weigh up all your options and make choices that suit your personal circumstances.

Key Takeaways and Action Steps

Choosing between Hargreaves Lansdown and Interactive Investor for your pension drawdown essentially comes down to the size of your pot and what you value most in a platform.

1. Work out your estimated annual platform fee for your pot size on both platforms. Be realistic about your mix of funds and shares.

2. Consider how much value you place on research, guidance, and user experience. HL generally excels here, but II is very capable.

3. Think about your investment strategy. Are you a buy-and-hold investor, or do you plan to make regular trades?

4. Don't forget fund charges and dealing fees. These add to the overall cost.

5. Look beyond just the initial costs. Small annual differences can really snowball over 10-20 years.

For many with significant pension pots in drawdown, Interactive Investor's flat-fee structure offers clear and substantial cost advantages, freeing up more of your money to live on or remain invested. However, Hargreaves Lansdown's user-friendly interface and extensive support can be a compelling draw for others, especially for those with smaller pots or who prefer more guidance.

Take the time to do your homework. Your retirement income depends on it.

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Further reading: Hargreaves Lansdown vs Interactive Investor 2026: Which Is Cheaper for Pension Drawdown?

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.