Lightyear¹, the up and coming, low cost investment platform in the UK, has made a significant step to establishing itself further in the UK – it’s now directly authorised by the Financial Conduct Authority (FCA), who are the regulators of financial services in the UK (makes sure companies are doing things properly).
Nuts About Money tip: here’s the full range of our picks of the best UK investment platforms.
That means investors now benefit from the Financial Services Compensation Scheme (FSCS), which provides compensation up to £85,000 should anything happen to Lightyear itself while holding your cash, such as going out of business, and your money not being returned.
Getting directly authorised by the FCA is a tough process, with strict criteria to meet to ensure customers are looked after and their money is safe and secure. Lightyear has now proved this, and adds that extra layer of trust for their customers. And is subject to ongoing checks.
Previously, Lightyear was able to operate and provide their services to customers by using the authorisation of another firm (RiskSave).
Lightyear plans to relaunch in January as the newly authorised company Lightyear U.K. Ltd (currently Lightyear Financial Ltd), and existing customers will be transferred to this new company behind the scenes.
There’s more great news too, with this new authorisation, Lightyear is planning to launch a Stocks and Shares ISA, so customers can invest tax-free, up to £20,000 per tax year (April 6th to April 5th the following year). Saving up to 24% tax on profits (Capital Gains Tax) which has recently been increased from 20% within the Autumn Budget.
Lightyear's ISA is set to be launched in time for the new tax year in April.
Nuts About Money tip: if you’re looking to invest within an ISA, check out our picks of the best Stocks and Shares ISAs for beginners.
Lightyear, which is based in London, has been building its UK team to manage its growth in the UK (and Europe, where it currently operates in 22 countries), a new UK CEO has taken the helm, Wander Rutgers, who was previously Lightyear's COO since 2022, and was the President of the UK for RobinHood (a popular investment app in America) and previously led teams at Wise and Plum, two other great finance apps.
Wander Rutgers (UK CEO) told Nuts About Money “Unlike others who’ve tried to enter the UK with no experience, we’ve been live here since the start, so we’ve had years of experience in the UK, combined with years of experience building a 'global-local' tailored product in each of our other 21 markets.
This is the start of our journey to becoming the best investing platform for the UK market. We now have no blockers in our way, and we’re ready to help everyone here put their hard-earned cash to work, and invest in their futures.”
Lightyear was founded in 2020 by Martin Sokk and Mihkel Aamer, both early employees of Wise, and has raised over $35 million to date from a range of top venture capital firms and individual investors, including Richard Branson.
The platform offers a wide range of stocks and investment funds (ETFs) across the UK, EU and US, and they also offer a top interest rate for saving cash within their high interest vaults (which is invested in a money market fund, which is an investment that earns interest).
You can also hold and invest in multiple currencies – which can put more money in your back pocket by saving on currency conversion fees each time you make an investment.
Lightyear is becoming very popular thanks to its slick app, which is easy to use, and it looks and feels great – unlike the apps of many larger investment platforms in the UK, which aren’t typically the best, and can also have high fees.
A slick app and low fees could be a welcome game changer for the UK, where around 75% of ISAs are held with high street banks or the larger more expensive established investment platforms, and could be the trigger needed to get the UK to focus on investing more for their future. And with FCA approval and ISAs coming soon, there could be no stopping them.
If you’re not familiar with Lightyear yet, we recommend checking them out – the app is great, and easy to use, and the fees are super low overall. Here’s our Lightyear review for more information.
