Lloyds Bank has reduced its Ready-Made Investments ongoing fund charge to just 0.1 per cent, in a bid to make investing more accessible to new investors.

The bank said this lower charge will also make investing ‘less intimidating’, while giving easier access to pre-built diversified funds for new investors.

Th new ongoing charge means investors will pay just £1 per year on investments of £1,000. 

Alongside the 0.1 per cent ongoing charge, however, users must pay £3 per month as an account fee. 

The RMI fund charge was reduced from 0.23 per cent, making it a cheaper option than other similar fund types, and pushing it below the cost of both Vanguard and Blackrock’s offerings.

Vanguard’s LifeStrategy range has an ongoing charge of 0.22 per cent, while most of Blackrock’s MyMap funds charge 0.17 per cent. Some have higher charges, with MyMap 4 charging 0.28 per cent.

Cheaper fees: The bank said its lower charge will make investing ‘less intimidating’, while giving easier access pre-built diversified funds for new investors

Vanguard charges a monthly fee of £4, while Blackrock’s funds can be accessed via various investment platforms.

For an investor with just £1,000, fees would be just over £38, rising to around £47 for an investment of £5,000. For an account funded with £20,000, the charge would be around £80.

In comparison, an investor with £1,000 in Vanguard would pay a total of £50.20, rising to £59 for an investor with £5,000 and £92 for an investor with £20,000.

Meanwhile, banking competitors like Barclays and NatWest also offer ready-made investment portfolios.

Barclays charges 0.25 per cent on funds, amounting to just £2.50 per year for funds of £1,000, and £12.50 on an account with £5,000. NatWest charges 0.4 per cent, or £4 per year on £1,000, or £20 on £5,000.

Lloyds’ Ready-Made Investments has three fund options, ‘cautious’, ‘balanced’ and ‘adventurous’, each offering different levels of risk to investors, as well as their own transaction fees on top of the ongoing charge and account fee. 

The cautious option comes with transaction fees of 0.11 per cent, while balanced and adventurous investors pay 0.12 per cent on transactions.

Investors are free to switch their funds to a different risk level at any point, Lloyds says.

Kevin Doran, chief investment officer at Lloyds, said: ‘​We know that many people who want to start investing feel overwhelmed by complexity and cost, so we created Ready-Made Investments to be a simple, affordable ‘portfolio in a box’ solution that removes any guesswork.’

Lloyds launched RMI in 2023, with 60,000 investors now holding their assets in the funds, which are worth £700million combined.

It said the average age of new customers is 40, but that 25 to 34-year-olds make up around 28 per cent of RMI customers.

Doran said: ‘It has been built on Lloyds’ deep understanding of customers and powered by the investment expertise of Scottish Widows. By bringing institutional pricing to everyday investors, we’re turning what may feel like a frightening leap into a simple, confident step forward.’ ​

To access RMI, customers will need to have a Lloyd’s banking account and invest a minimum of £500 as a lump sum, or £50 per month.

An RMI account can be managed through Lloyd’s online banking app.

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