Hargreaves Lansdown launches its first cash Isa in bid to take on high street banks

Hargreaves Lansdown on Tuesday unveiled its first branded cash Isa, moving deeper into the cash savings market by teaming with Shawbrook Bank to offer an easy-access Isa at a rate of 3.45%. The rate is variable, but HL said it would never pay less than 0.65 percentage points below the Bank of England base rate, which stands at 4% today. The arrangement marks HL’s first foray into a branded savings account rather than savings products offered through its Active Savings platform.

Deposits into the new cash Isa can be made with as little as £1 and can be extended to as much as £1 million if a saver is transferring an Isa from another provider. Shawbrook will hold customer deposits, with up to £85,000 of savings per saver protected under the Financial Services Compensation Scheme. HL, however, will retain control of the interest rate offered on the Isa, giving the platform a direct say over how cash sits within the product. This structure is meant to position HL as a direct competitor to both large high street banks and the newer wave of challengers that have drawn savers with high introductory rates.

The introduction of a stand-alone cash Isa underscores HL’s broader push to grow its cash-saving business. HL already offers cash savings products through its Active Savings platform, which aggregates deposits from multiple partner banks. Active Savings currently serves about 400,000 clients and holds more than £15.1 billion in cash across accounts. By launching its own Isa, HL is extending the familiarity of its brand into a product that is tax-efficient for savers, and aligning it with the cash-savings ecosystem that has become a substantial part of its client offering.

The new Isa comes as savers have shown renewed interest in cash accounts and the role they play in diversification and liquidity. On average, the biggest high street banks pay about 1.28% on cash Isas, a figure that puts HL’s 3.45% offer well above the industry norm. While HL’s rate is attractive relative to the market, the sector’s landscape remains nuanced: many top rates have historically been concentrated with challenger banks and newer entrants that frequently launch with bonus offers that can disappear after several months. HL’s rate therefore reflects a blend of competitive positioning and the practical need to balance attractive yields with product sustainability in a shifting rate environment.

Mark Hicks, head of Active Savings at Hargreaves Lansdown, said the savings market has been characterized by a cycle in which higher rates are often driven by smaller, newer banks that then taper offers. “The highest rates in the savings market are often dominated by challenger banks and smaller new entrants who attract clients with high rates or bonus rates which very quickly drop after the first 6-12 months,” Hicks said. His comments frame HL’s decision to enter the cash Isa space with a product that blends competitive yield with price discipline and FSCS protection for savers’ deposits.

HL also announced that its Active Savings platform will be accessible through its mobile app, making it easier for clients to manage both investments and savings in one place. For investors who hold uninvested cash in their HL investment accounts, HL notes that cash balances can earn interest of up to 2.75% for sums of £100,000 or more, depending on the balance and product terms. The company said the move to integrate Active Savings into its mobile app is part of its effort to streamline customer experience and deepen engagement with the platform’s savings options.

HL’s latest offering arrives amid a broader trend of platforms expanding their savings capabilities to capture a larger share of customer cash that historically flowed into banks. While the 3.45% Isa is competitive, HL faces ongoing competition from both traditional banks increasing their own savings options and from challenger brands that have gained notoriety for higher introductory rates. The market context is reflected in industry roundups that track the best cash Isa deals across providers, including listings from trading platforms and smaller lenders seeking to attract funds through attractive early terms.

The deployment of this product also has implications for how savers compare offers. This is Money’s coverage of cash Isa deals emphasizes the need for savers to consider factors beyond the headline rate, including withdrawal flexibility, transfer rules, and any potential rate reversion after introductory periods. The publication’s runs of best-buys highlight the wide range of offers available and remind readers that cash Isa performance can be influenced by a lender’s broader funding strategy, liquidity profile, and competitive pressures. In that context, HL’s entry with Shawbrook provides savers with another option that blends a strong headline rate with the security of FSCS protection and the convenience of being managed within a familiar platform.

As HL expands its savings footprint, industry observers will watch how the new cash Isa performs over time and whether it drives broader participation in HL’s savings ecosystem. The move also signals a broader strategic focus on non-investment products that can deepen client relationships and diversify revenue amid a competitive and rapidly evolving market for savings products. For savers exploring cash Isas, HL’s offering adds another data point in a market that increasingly values rate transparency, security, and seamless integration with investment platforms.

In the broader landscape, the savings arena remains dynamic as banks and non-traditional providers compete for deposits. This is Money’s roundups of current Isa deals underscore that while some lenders remain aggressive on introductory rates, the sustainability of those offers depends on factors such as funding costs, reserve requirements, and regulatory considerations. HL’s entry into the cash Isa space with a notable rate positions the platform as a more direct competitor for savers who want a single, consolidated experience for both investments and savings within a regulated and insured framework.

The financial services landscape continues to evolve as platforms seek to translate their scale and technology advantages into more diversified revenue streams. HL’s cash Isa launch with Shawbrook is a notable development in this ongoing process, one that could influence how savers evaluate the trade-offs between rate, protection, and convenience in the months ahead.