Lightyear vs InvestEngine (2026): Which Is Better for a UK Stocks & Shares ISA?

Short answer: weighing up Lightyear vs InvestEngine for a UK Stocks & Shares ISA in 2026, Lightyear is the better default for most people. It's cheaper on the thing that actually costs money (currency conversion), pays interest on cash sitting uninvested, and doesn't restrict you to ETFs only. InvestEngine earns its place for one reason Lightyear can't touch — a genuinely fee-free SIPP — and it also suits anyone wanting the guardrail of an ETF-only account. Both are FCA-regulated and FSCS-covered, and — worth saying before the marketing gets in the way — for the single most common ISA purchase, a GBP-listed global tracker, the two cost almost exactly the same.

This comparison is based on both platforms' own pricing, ISA and SIPP pages, checked 26 August 2026 — we haven't run money through either app for this piece.

Some links in this article are affiliate links. If you sign up through them we may earn a commission — at no extra cost to you. It never changes which products we recommend.

The key points

• Cost: Both are effectively free for GBP-listed ETFs. Lightyear charges 0.10% FX only on currency conversion (e.g. a US share). InvestEngine avoids FX entirely — but only because it restricts you to GBP-listed ETFs.
• What you can hold: Lightyear — ~6,000 shares/ETFs plus three ready-made Plans. InvestEngine — 870+ ETFs only; Managed/LifePlan is paused to new clients.
• Cash: Lightyear pays interest on uninvested cash (Cash ISA 3.75% AER, Vaults ~3.8% after a 0.15–0.20% fee). InvestEngine keeps that interest itself.
• Pensions: InvestEngine has a fee-free SIPP. Lightyear has no pension product.

Fees: narrower than either app's marketing suggests

Both will tell you they're free, and on the core ISA account that's true of both — no platform fee, no dealing fee, no ISA set-up fee. Where they diverge is currency conversion, and it's smaller than most comparisons make it sound.

Lightyear charges a flat 0.10% FX fee on anything priced outside pounds — a US share, a non-GBP ETF — the same rate in the general account and the ISA. That's down from 0.35% before Lightyear's March 2026 price cut; if you've seen the higher figure quoted anywhere, it's out of date. Put £5,000 into a US-listed ETF and the FX fee comes to about £5.

Do the equivalent on InvestEngine and you'll pay £0 — not because it's undercutting Lightyear, but because it doesn't offer the trade. Its entire ETF range is listed in pounds on the London Stock Exchange, so there's no currency to convert. Buy a GBP-listed global tracker on Lightyear instead, though, and its FX fee disappears too. For a beginner's actual first purchase — one broad, sterling tracker — the two cost the same: nothing.

Underlying fund costs are a wash too; both pass through the ETF's own charge, and InvestEngine's "from 0.03% a year" is true of the cheapest trackers on either platform.

The one other fee is funding the account: 0.6% on Lightyear for card or Apple/Google Pay top-ups (bank transfer free); InvestEngine lists no deposit fee.

What you're actually allowed to buy

This is the real structural difference, and no fee comparison changes it.

Lightyear offers roughly 6,000 stocks, ETFs and money market funds across UK, US and EU markets, and in 2026 added Ready-made Plans — three pre-built portfolios (Moderate Mix, Growth Group, All-World Wonder) using iShares and Vanguard ETFs, with no extra buy or sell fee, live and open to new customers.

InvestEngine is ETF-only: more than 870 funds from 18-plus providers including iShares, Vanguard and Fidelity, and nothing else — no individual shares, no investment trusts. Its ready-made option, Managed (and related LifePlan), is currently unavailable to new clients, confirmed on both its costs and ISA pages. Even setting the pause aside, InvestEngine's own site disagrees with itself on price: the costs page states a 0.25% annual Managed fee, the ISA page states 0.45%. We couldn't resolve which is current, so treat both as unconfirmed. Today's comparison, in practice, is a live ready-made option on Lightyear against a paused one on InvestEngine.

Cash: who pays you, and who keeps it

This is the fee that's easy to miss, because it isn't charged to you — it's just not paid to you.

Lightyear pays interest on uninvested cash two ways: a Cash ISA tracking the Bank of England base rate (3.75% AER, matching the rate the Bank held at 3.75% on 30 July 2026, next reviewed 17 September 2026), and Vaults — money-market funds — paying around 3.8% AER, though Vaults aren't FSCS-protected. Lightyear's own pages disagree on the exact Vaults fee — its pricing page says "0.15% or less," its dedicated Vaults page says 0.20% — so treat the fee as somewhere in that range rather than a fixed number until you check the live rate at sign-up.

InvestEngine does the opposite by design: its costs page says plainly that uninvested cash "doesn't generate returns" for the customer — it keeps that interest, openly, as part of how it funds a fee-free DIY portfolio.

Leave £2,000 uninvested for six months and the gap gets concrete: parked in a Lightyear Vault or its Cash ISA at roughly 3.75% AER, that's around £37 landing in your account (Vaults aren't FSCS-protected, so the Cash ISA is the safer of the two if that matters to you). On InvestEngine, it's £0 — not a hidden charge, just interest going to InvestEngine instead of you. Invest promptly and this barely matters; let cash pile up and it adds up in a way "£0 platform fee" won't show you.

The SIPP question decides more than it should

For retirement saving, InvestEngine wins outright, because Lightyear isn't competing. Lightyear has no SIPP — no pension product of any kind, as of August 2026. If you want your ISA and pension in the same app, that rules it out immediately.

InvestEngine's SIPP charges no account fee at all; you pay only the ETF's ongoing charge, the same structure as its ISA. It opens with £100, then accepts regular contributions from £20 a week or £50 a month. InvestEngine claims your 20% basic-rate tax relief automatically from HMRC — typically six to eleven weeks — and higher and additional-rate taxpayers claim the rest via Self Assessment. The one real limitation: no employer contributions, so it suits your own top-ups or an old pension you're consolidating, not a workplace scheme. If a pension is part of what you're deciding today, this alone might settle it in InvestEngine's favour.

ISA mechanics: allowance, flexibility, minimums

Both offer a Stocks & Shares ISA sheltering up to £20,000 in 2026/27, and both are fully flexible — withdraw money and put it back in the same tax year without losing that part of your allowance.

Minimums differ more than you'd expect: Lightyear takes a deposit as small as £1, while InvestEngine needs £100 to open (its Savings Plan then runs from £20 a week or £50 a month).

Neither charges an ISA transfer-in fee. InvestEngine's transfers only move in-specie (without selling) for ETFs it already stocks — anything else is converted to cash first, meaning time out of the market.

Safety: FCA regulation and FSCS cover, read carefully

Both are FCA-regulated — Lightyear UK Ltd (FRN 987226), InvestEngine (UK) Limited (801128) — and both are FSCS members. But they describe cash protection differently, worth reading past the headline number.

For invested money, both give the identical standard: FSCS investment cover up to £85,000 per person, per firm, if the firm fails — not ordinary market losses; a falling ETF is just investing, on either platform.

For uninvested cash, Lightyear is specific: it names the banks holding your money — Citibank and NatWest — and claims up to £120,000 per bank, the higher deposit limit from December 2025. Vaults are excluded, since they're funds, not bank deposits.

InvestEngine's site states its cover more simply, as "up to £85,000," applying that figure to cash and investments together, without naming a partner bank or drawing Lightyear's distinction. That may just describe standard client-money protection — but it doesn't make Lightyear's £120,000 claim. Holding a meaningful cash balance? Ask either provider directly which limit applies.

Lightyear vs InvestEngine: full comparison table

Figures as published on each provider's own site as of 26 August 2026 — confirm before you commit, since these change.

Who should pick which

Pick Lightyear if you want the broader range — shares as well as ETFs — you'd rather earn something on cash before it's invested, and you don't need a pension in the same app right now. For most people opening a first or second ISA, that's the sensible default.

Pick InvestEngine if a fee-free SIPP matters, you want the discipline of an ETF-only account with no temptation to buy a hyped stock, or you invest promptly enough that the uninvested-cash gap costs nothing anyway.

Neither is wrong — two verified, low-cost platforms competing over details, not one hiding a flaw. Weighing a third contender? InvestEngine vs Trading 212 covers a similar ETF-only trade-off, and our best investing apps UK guide runs the full shortlist. For deeper single-platform detail, read our full Lightyear review and InvestEngine review.

How to get started

1. Decide what you need first — an ISA alone, or an ISA plus a pension (which may already settle this in InvestEngine's favour).
2. Check your ISA allowance — £20,000 for 2026/27, shared across every ISA you hold.
3. Open the account. Lightyear needs an email, UK details and ID verification; InvestEngine needs photo ID and a National Insurance number.
4. Fund it. Bank transfer on Lightyear skips the 0.6% card fee; InvestEngine needs £100 up front.
5. Buy something simple first — a broad, GBP-listed global tracker — and set up a regular contribution so it isn't a one-off.

FAQ

Is Lightyear or InvestEngine better for a UK ISA in 2026? Lightyear is the better default for most people — individual shares as well as ETFs, interest on uninvested cash, and a flat 0.10% FX fee only on non-GBP trades. InvestEngine is stronger if you want a fee-free SIPP alongside your ISA, or an ETF-only account as a stock-picking guardrail.

Which has lower fees, Lightyear or InvestEngine? It depends what you buy. A GBP-listed ETF costs the same on both — nothing beyond the fund's own charge. Lightyear adds 0.10% FX only on currency conversion; InvestEngine avoids this by restricting you to GBP-listed ETFs, so it's narrower, not cheaper.

Can I buy individual shares on Lightyear or InvestEngine? Lightyear, yes — around 6,000 UK, US and EU shares and ETFs. InvestEngine is ETF-only, with 870+ funds and no individual shares, as of August 2026.

Does Lightyear or InvestEngine offer a SIPP? InvestEngine does — fee-free, £100 minimum, automatic basic-rate tax relief. Lightyear offers no pension product as of August 2026, so InvestEngine is the only one of the two if you want ISA and SIPP in one app.

Which platform pays interest on cash I haven't invested yet? Lightyear does: a Cash ISA tracking the base rate (3.75% AER, held at 30 July 2026) and Vaults paying roughly 3.8% AER after a 0.15–0.20% fee. InvestEngine's costs page says uninvested cash "doesn't generate returns" for the customer — it keeps that interest as part of how the DIY portfolio stays fee-free.

Is my money protected if Lightyear or InvestEngine goes bust? Both are FCA-regulated and FSCS members, with the same £85,000-per-person investment cover. For uninvested cash, Lightyear names the banks holding it (Citibank, NatWest) and claims the higher £120,000 deposit limit; InvestEngine states a single "up to £85,000" figure for cash and investments together. Confirm directly with either before holding a large cash balance.

This is general information, not financial advice. Fees and features are as published by each provider as of 26 August 2026 and can change — confirm current terms 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: 26 August 2026.