Which platform won't charge me if I miss a monthly direct debit?

19 July 2021

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Question by Charlie

Hello! I'm looking to start investing and after lots of research I'm torn between Evestor and Vanguard Lifestrategy as they both have low fees and passive investing. I understand Vanguard is more established with a traditional platform, while Evestor is newer to the market with a simple easy to use platform. The entry requirements are much higher for Vanguard (£500 upfront and £100/month) while Evestor starts at £1. Is there any benefit of stretching my investment to use the Vanguard fund? Also do you know with Vanguard if I miss a monthly payment, will I be charged? I know this is possible with Evestor to stop a direct debit, however I'm not sure what the consequences (if any) would be of missing a payment with Vanguard. Many thanks, Charlie

Answered by Boring Money

Hi Charlie,

As a start, you are right about both these providers offering low cost, passive investing options.

Both will cost you around 50p per year for every £100 invested, and there are not many cheaper options for a diversified investment solution.

Investing Comfortably

I think the key question is what you can afford to invest and what amount will be comfortable for you on a monthly basis.

Regular investing is a great way to start, as it allows you to invest smaller amounts and by setting up a direct debit it makes it a habit – similar to setting up a standing order into a savings account.

Making investing a habit is an effective way to build up a decent pot over the long term.

Investing is not like a savings account

Unlike a savings account where you may decide to put cash away to use for a holiday next year - with investing you want to stick with it over the longer term (at least 5 years) due to the effect of compounding, and some of the potential dips you could experience along the way.

Affordable investing

Because of this, it’s important that you are investing an amount you can afford.

So if that is less than £100 per month, I would say go with Evestor (/{localLink:umb://document/7444a6188ccc4f739adb42a95cbd7e73})instead of Vanguard (/{localLink:umb://document/35e32e6b88cc4fae8ec3b9e8be9eb18b}).

If you can comfortably afford £100 per month, then Vanguard is a great option (and for full disclosure, around half of my portfolio is invested in a Vanguard LifeStrategy fund.)

Direct debits

Regarding stopping direct debits, both providers allow you to stop a direct debit at any time, but you will likely need to give around 7-10 working days notice so they can stop the payment in time.

For missing payments, Vanguard also won’t charge you.

However you could be charged by your bank account if the direct debit is active and it bounces.

If you think this could be possible in the future, then I’d consider Evestor’s other brand OpenMoney.

They will ask you a few questions to understand your financial circumstances, and to understand if investing is suitable for you.

If they decide that investing is indeed for you, they will recommend a portfolio which matches your attitude to risk, as well as your investing goals.

Hope this helps.

Answered by

Boring Money