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Robinhood, the US broker that shot to prominence in the 2021 meme stock craze, plans to take on UK investment platforms such as Hargreaves Lansdown by launching a stocks-and-shares Isa with no fees before the end of the tax year.
The move to create the tax-free account is a step by Robinhood, which pioneered zero-commission share trading, towards offering trading in shares of UK-listed companies as it seeks to expand its business.
It comes as the Labour government pushes to encourage savers to channel more money into UK companies and reinvigorate the London Stock Exchange.
Jordan Sinclair, head of Robinhood UK, said in an interview with the Financial Times that he expected his company to launch a stocks-and-shares Isa before April 2026. The firm said it had all the regulatory approvals needed to offer the accounts and UK share trading.
“UK equities is something we hear from our customers that they want [to be able to invest in],” said Sinclair. “An Isa is something we want to do first. You’ll see that before the next tax year, definitely.”
Robinhood’s plan comes as chancellor Rachel Reeves prepares to review the market for tax-free individual savings accounts to encourage investors to plough some of the £300bn held in cash Isas into shares.
The Treasury is considering cutting the £20,000 annual tax-free allowance for cash Isas and City minister Emma Reynolds discussed this with bank executives last week, the FT previously reported.
Sinclair said the UK’s push to increase retail investment in equities was “really positive” and that the company wanted to be “the single [investment] platform for a customer in the UK”.
The company had to postpone a planned UK launch in 2020 due to a trading glitch and the pandemic. It eventually entered the British market last year, offering trading in more than 6,000 US stocks and 5 per cent interest on uninvested cash, later lowered to 4 per cent as the Bank of England cut rates.
Robinhood has been pushing beyond its domestic market and trading of popular US shares. It gained notoriety in 2021, when US retail investors, many of them inexperienced, piled into trading in stocks based on discussions on social media.
The broker was forced to halt trading in some stocks and had to raise capital to shore up its finances as it was hit with a wave of orders. Retail traders were outraged by the restrictions and politicians ordered the company to explain its role in the frenzy.
In the UK, it has aimed to undercut competitors such as Hargreaves Lansdown, IG and AJ Bell, which charge between £4 and £12 in commission for each share trade.
Platforms use various charging systems, including a flat monthly fee or taking a percentage of assets as a management fee. Some offer “zero-commission” trading and “no account fees” but still impose other charges.
Robinhood instead says it makes money by charging interest for lending out securities and from loans that offer leverage on options trades.
In the US it has competed with companies like Schwab and ETrade by offering incentives like zero-commission trading and a mobile app which pulled retail traders into assets including equities, options and cryptocurrencies.
Sinclair said the UK could learn from the success of Sweden’s Investeringssparkonto, a tax-efficient savings product, by not charging fees on stocks-and-shares Isas.
“I see UK brokers that still charge you a fee for having the stocks-and-shares Isa. Is that really needed?” he said. “The way we’ve approached account types in the US, it’s easy to extrapolate that customers here shouldn’t be charged for opening up an account.”
He also said there was an opportunity for Robinhood to allow US investors to buy UK equities. “When we talk about capital flows, a small slice of the US market is enormous,” he said.