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 that 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 ten banks at any one time; 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 £120,000. For example, if we allocate 25% of cash to Bank A, you would need to hold more than £480,000 in cash with us to be over the FSCS limit with that bank (excluding any balances held outside HL) i.e. (£120,000/ 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.

Interest rates

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

We do not charge a fee for holding cash or for cash transactions. Hargreaves Lansdown expects to receive interest of between 0.5% below and 0.5% above the prevailing Bank of England base rate over the next 12 months on cash balances held in the Client Bank Accounts and SIPP Trustee Bank Accounts. The rates that we pay clients are determined by the nature of the account and how that account is typically used by our clients. For example, we pay our highest rates in Drawdown, which is often used to hold higher levels of cash for rainy-day money in retirement. HL retains the difference between the interest that HL receives and the interest that is paid to you.

We consider retaining interest to be better for our clients than making a separate charge because it’s more tax-efficient (an explicit charge would be paid from taxed interest income). It also means that the return that clients receive is more clearly comparable with what they may receive from other platforms or from bank accounts (which also apply their charges in the same way).