Freetrade vs Lightyear (2026): Which UK Investing App Is Better for Beginners?

Short answer: for most cost-conscious UK beginners in 2026, Lightyear is the cheaper place to invest inside an ISA — its FX fee falls to 0.10% for ISA and general-account trades, and it runs a 3.75% Cash ISA that Freetrade doesn't offer at all. Freetrade wins if a pension matters to you: its SIPP is free on every plan, including the £0 Basic tier, and it now includes mutual funds and gilts without a subscription.

This comparison is built from both providers' current pricing pages, help-centre documents and independent broker reviews, checked in July 2026. Neither app has been personally tested for this piece — everything below is drawn from published terms, so treat the numbers as a starting point and confirm current pricing before you sign up.

For the wider field, see our best investing apps UK guide. If you're weighing up the other big UK rivalries, read Freetrade vs Trading 212 or Trading 212 vs Lightyear.

The short version

• Lowest ISA FX fee: Lightyear at 0.10% (ISA and general account) — Freetrade's Basic plan charges 0.99%.
• Cheapest to run day-to-day: tie on commission — both are £0 on UK shares and ETFs, no platform fee, no ISA fee.
• Cash ISA: Lightyear only — 3.75% AER, tracking the Bank of England base rate. Freetrade doesn't have one.
• Pension (SIPP): Freetrade only — free on every plan, including Basic. Lightyear has no SIPP.
• Fund range: Freetrade — mutual funds and gilts are now included on all three plans, alongside 8,200+ stocks, ETFs and investment trusts.
• Best overall for most beginners investing inside an ISA: Lightyear, on cost. Best if you want one app for investing and a pension: Freetrade.

Fees and FX: the number that actually moves the needle

Both apps are commission-free on UK shares and ETFs, with no platform fee and no ISA fee on either side. The real cost sits in the FX fee — what you pay when your pounds get converted to buy a US or other non-GBP share.

Freetrade's FX fee depends entirely on which of its three plans you're on: 0.99% on the free Basic plan, dropping to 0.59% on Standard (£4.99/month, or £59.88 billed annually) and 0.39% on Plus (£9.99/month, or £119.88 billed annually). On a £1,000 US share purchase, that's about £9.90 on Basic, versus roughly £3.90 on Plus.

Lightyear's headline FX fee is 0.35% — but for its UK Stocks and Shares ISA and general investment account, it drops to just 0.10% of the trade value, with no subscription required to unlock that rate. On that same £1,000 US purchase, Lightyear's ISA rate works out to about £1.00 — roughly a tenth of what Freetrade's free Basic plan charges.

One wrinkle worth knowing: older reviews mention a roughly £1 flat fee per UK share trade on Lightyear — that's now out of date. Lightyear scrapped its remaining UK trading commissions in March 2026, so UK share trades are commission-free on both apps, in the ISA and general account alike.

The honest downside for both: "commission-free" doesn't mean fee-free. FX fees are easy to overlook and add up if you regularly buy overseas shares.

ISAs: Lightyear has the edge on cost, Freetrade has more account types

Both apps offer a free, flexible Stocks and Shares ISA for the 2026/27 tax year — flexible meaning you can withdraw money and put it back within the same tax year without eating into your £20,000 allowance.

Where they diverge is account breadth and cash savings:

• Freetrade also offers a Junior ISA and a SIPP on every plan, plus a general investment account — genuinely more account types in one app.
• Lightyear has no Junior ISA, no Lifetime ISA and no SIPP, but it does have something Freetrade lacks entirely: a Cash ISA paying 3.75% AER, tracking the Bank of England base rate (also 3.75% as of July 2026) with what Lightyear calls "no asterisks" — no expiring bonus rates, no withdrawal penalties, and a £0 minimum deposit.

If you want your ISA investing and your tax-free cash savings under one roof, Lightyear is the only one of the two that offers both. If you want your ISA, a pension and a fund range together, Freetrade covers more ground.

The honest downside: rates on Cash ISAs move with the Bank of England base rate and can change without much warning — don't pick an app purely on today's headline number.

Interest on idle cash and Vaults

Money sitting uninvested in either app can earn something.

Freetrade tiers interest by plan: 1% AER on up to £1,000 of uninvested cash on Basic, 2.5% on up to £2,000 on Standard, and 3.5% on up to £3,000 on Plus. Even on the top Plus tier, that's a maximum of about £105 a year in interest against £119.88 in annual subscription cost — so don't buy a plan for the interest alone.

Lightyear offers Vaults — an easy-access investment product managed by BlackRock, paying 3.78% AER (variable) as of July 2026, benchmarked against the Bank of England's overnight rate. There's no minimum and no maximum: you can hold £1 or £100,000 in a Vault. Lightyear also separately holds customer cash in bank deposits and money market funds as part of normal account operation.

The honest downside: Vaults are an investment product, not a bank deposit. FSCS protection applies to Lightyear client money held in banks, but not to money held in Qualifying Money Market Funds — including Vaults. It's low-risk, not no-risk, and you should read the fund details before parking large sums there.

Range and features: Freetrade's pension and fund access vs Lightyear's simplicity

Freetrade now gives every plan — even the free Basic tier — access to its full universe of 8,200+ stocks, ETFs and investment trusts, plus mutual funds, UK gilts and a free SIPP. That's a genuinely wide range for a £0/month account. Paying for Standard or Plus mainly buys you a lower FX fee, more interest on cash, priority support and (on Plus) automated order types like recurring orders and stop losses.

Lightyear covers UK, US and European shares, ETFs and money market funds, plus Plans (its version of ready-made portfolios) and Ready-made Plans. What it doesn't have is a SIPP, a Junior ISA or a Lifetime ISA — so it can't be a one-app home for retirement saving or a child's investments.

The honest downsides: Freetrade's free SIPP still carries the general caveat that pensions are complex — tax relief and withdrawal rules apply regardless of provider, and you should understand them before contributing. Lightyear's narrower account range means anyone who wants a pension will need a second app alongside it.

Side-by-side comparison (July 2026)

Figures checked July 2026 against provider pricing pages and help-centre documents, plus independent reviews where noted. Rates and fees change often — always confirm current terms on the provider's own site before opening an account.

Who should pick what

Pick Lightyear if you mainly invest inside a Stocks and Shares ISA and want the lowest FX cost available (0.10%), if you want a competitive Cash ISA in the same app, or if a clean, simple interface matters more to you than a wide product range.

Pick Freetrade if a pension is on your list — its SIPP is free on every plan, including Basic — or if you want mutual funds and gilts alongside shares and ETFs without paying a subscription, or if you'd rather have a Junior ISA available for a child's investments in the same app.

Honest note: if you only ever buy a single UK-listed global index fund inside an ISA and never touch overseas shares or a pension, the practical difference between these two apps is small — both charge £0 commission and a free flexible ISA. The gap widens the moment you buy US shares, want interest-bearing cash, or start thinking about retirement.

How to get started

1. Download Freetrade or Lightyear and sign up with your email and UK details.
2. Verify your identity with a passport or driving licence — usually takes a few minutes.
3. Open the Stocks and Shares ISA version of the account, unless you've already used this year's £20,000 allowance elsewhere.
4. Add money by bank transfer where possible — Lightyear charges 0.6% on debit card, Apple Pay or Google Pay deposits, while bank transfers are free on both apps.
5. Start with something simple and diversified, such as a low-cost global index fund, and consider setting up a monthly auto-invest so it happens without you.

FAQ

Is Freetrade or Lightyear cheaper in 2026? For ISA investing, Lightyear — its FX fee inside an ISA or general account is 0.10%, versus 0.99% on Freetrade's free Basic plan (falling to 0.39% only on the £9.99/month Plus plan). Both charge £0 commission on UK shares and ETFs. If you stick to UK-listed funds and never touch overseas shares, the fee gap shrinks to almost nothing.

Does Freetrade or Lightyear have a Cash ISA? Lightyear does — its Cash ISA pays 3.75% AER as of July 2026, tracking the Bank of England base rate (also 3.75% at the time of writing) with no bonus-rate expiry. Freetrade has no Cash ISA at all; it offers a Stocks and Shares ISA, a Junior ISA, a SIPP and a general investment account, but nothing for cash savings specifically.

Can I get a pension (SIPP) with Freetrade or Lightyear? Freetrade, yes — its SIPP is free on all three plans, including the £0 Basic plan. Lightyear does not offer a SIPP as of July 2026, nor a Junior ISA or Lifetime ISA. If a pension is on your list, Freetrade is the only one of the two that has one.

Are Freetrade and Lightyear safe? Both are authorised and regulated by the FCA, and eligible cash and investments are protected by the FSCS up to £85,000 if the firm fails. That protection doesn't extend to money held in money market funds — including Lightyear's Vaults — and it never covers normal investment losses.

Do Freetrade and Lightyear charge for UK share trades? No — both are commission-free on UK share trades. Freetrade has always charged £0 commission; Lightyear scrapped its remaining UK trading fees in March 2026, so older reports of a roughly £1 per-trade charge are now out of date.

Does Freetrade have an affiliate programme? No — Freetrade doesn't currently run a public affiliate programme, so any link to Freetrade in this article is a plain, non-commission link. Lightyear does, and the Lightyear links here are affiliate links (see disclosure above).

This is general information, not financial advice. Fees and features are current as of July 2026 and change often — always check each provider's website before you sign up. Investing puts your capital at risk; you may get back less than you put in. Do your own research and consider speaking to a qualified adviser about your situation.

Last updated: 11 July 2026.