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How we look after
your money

We perform a range of services to manage your cash and improve the interest rates we can pass on to you. The majority of your money is held with core UK clearing banks such as Lloyds, HSBC, Bank of Scotland and Barclays. We carefully analyse each bank and move your money between them to help keep it safe – each bank is protected by the Financial Services Compensation Scheme (FSCS), so spreading your money around means you receive more protection.

You’ll always have one instantly accessible balance with HL but this balance is spread across many banks. This year we held client money with at least nine banks at any one time and your money is diversified across these banks.

We look at the percentage held at each bank and quantify the cash balance you would need to have with us to exceed the FSCS limit of £85,000. For example, if we allocate 25% of cash to Bank A, you would need to hold over £340,000 in cash with us to be over the FSCS limit with that bank (excluding any balances held outside HL) i.e. (£85,000/ 0.25). The amount allocated to each bank reflects their scale, perceived strength and willingness to accept cash balances.

The table below shows the maximum percentage of client money that could be held with each bank.

Banking license Maximum limit
Core Barclays Bank plc
Bank of Scotland plc
Lloyds Bank Corporate Markets plc
Lloyds Bank plc
HSBC Bank plc
35%
35%
35%
35%
35%
Secondary Santander UK plc
Goldman Sachs International Bank plc
Bank of Montreal
15%
15%
15%
Tertiary Investec Bank plc
Qatar National Bank
Emirates NBD Bank
5%
5%
5%

Interest rates

We aim to offer competitive interest rates, within the top six of our competitors’. We compare the net interest clients receive (i.e. interest received from banks less that retained) for the average cash balances held in accounts on our service.

The costs of actively managing your money include client accounting, audit, regulatory oversight and control, banking analysis as well as client facing support teams to assist with client enquiries.

We think it’s best that we cover these costs by retaining some of the interest banks pay us on client money. The alternative would be to charge clients an explicit fee, which we don’t want to do. We consider retaining interest to be better for our clients because it’s more tax efficient (an explicit charge would be paid from taxed interest income). It also means the return clients receive is more clearly comparable with that they may receive from other platforms or from bank accounts (which also apply their charges in the same way).

We aim to pass on interest rate rises on the day the Bank of England announces the new rate, and have achieved this for the two most recent interest rate rises. The amount we earn is also used to absorb some interest rate changes, we don’t necessarily benefit from immediate rate changes, but we make sure clients do. Clients have instant access to cash, and can deal on money before it’s settled. We don’t charge for any cash transactions.