Key takeaways
- A £50,000 dealing account holding one global tracker at AJ Bell's published tariff cost £245.25 a year across seven layers — 0.49% of the portfolio.
- The fund's own ongoing charge was £70 of that, or 28.5%. The largest layer was £107.25 of dividend tax, which an ISA removes completely.
- AJ Bell charges 0.25% on funds with no cap, and 0.25% capped at £3.50 a month on shares and ETFs. The same £50,000 costs £125 or £42.
- One-off costs of £220 outweigh a 0.14% ongoing charge for anyone who holds for less than roughly 3.1 years, then fade towards nothing.
- Stamp duty of 0.5% is £50 on a £10,000 direct UK share purchase and nothing on a fund bought from the manager, though the fund still pays it.
Seven layers, £245.25 a year, and the fund charge is under a third of it
What does it actually cost to invest £50,000 in the UK, once you count every layer? On one realistic setup, the published charges come to £245.25 a year. That's 0.49% of the portfolio.
The setup is a taxable dealing account at AJ Bell, holding a single global tracker ETF, owned by a higher-rate taxpayer. Seven separate layers make up that number. The fund's ongoing charge — the figure printed on the factsheet, and the one most people compare — is £70 of it, or 28.5%. The biggest layer isn't a charge at all. It's £107.25 of dividend tax, and moving the identical holding into an ISA takes it to zero.
Every figure below comes from a published document, retrieved on 8 August 2026. Each layer is a mechanism in its own right, and each has a piece of its own linked from here. What this page adds is the assembly: all seven in the same unit, on one portfolio, ranked.
You can't rank cost layers until you convert them to one unit
Here's the awkward part of any total-cost list. Some of these charges are annual percentages. Some are one-off percentages. One is a fixed number of pounds. One is a tax rate applied to income rather than to the portfolio. As published, they aren't comparable at all.
Converting them takes two assumptions that no document can supply for you: how large the portfolio is, and how long you hold it. Size matters because one layer is capped and the others aren't. Holding period matters because a one-off charge spread over 20 years is a twentieth of the same charge spread over one.
So everything below is stated for £50,000 held for 20 years, in pounds a year. Change either assumption and the order changes. That instability is the finding, not a footnote to it.
The full stack, layer by layer, on £50,000
The holding is the Vanguard FTSE All-World UCITS ETF, distributing share class. Vanguard's costs and charges document, dated 28 July 2026, discloses three separate numbers for it: ongoing costs of 0.14%, transaction costs of 0.03% and one-off costs of 0.03%. The transaction cost data is as at 31 December 2025.
- Dividend tax, £107.25. FTSE Russell put the dividend yield on the FTSE All-World index at 1.60% as at 31 July 2026. On £50,000 that's £800 of dividends. The allowance is £500 for the 2026 to 2027 tax year, leaving £300 taxed at the higher dividend rate of 35.75%.
- Fund ongoing charge, £70.00. 0.14% of £50,000, deducted from the fund's price rather than billed to you.
- Platform custody, £42.00. AJ Bell's tariff, effective from 10 July 2026, charges 0.25% on shares and ETFs with a maximum of £3.50 a month.
- Fund transaction costs, £15.00. 0.03% of £50,000, incurred inside the fund when it trades.
- Currency conversion, £10.00 a year. Buying the US dollar line costs 0.75% on the first £10,000, 0.50% on the next £10,000 and 0.25% above £20,000 — £200 once, or £10 a year over 20 years.
- Bid-offer spread, £0.75 a year. The disclosed 0.03% spread is £15 at purchase.
- Dealing charge, £0.25 a year. £5 for an online share or ETF trade.
The chart ranks them, with the three purchase costs grouped into one bar because at £11 a year combined they'd be invisible next to the rest. The shape is the point: two layers carry 72% of the bill, and the four smallest together come to £26 a year. The crossover between flat and percentage platform pricing decides the third bar, and the mechanics of the currency margin decide the fifth.
The ongoing charge is built to exclude the layer sitting underneath it
The number people compare hardest is the one with the narrowest definition. BlackRock states it plainly in the investor information document for the iShares Core MSCI World UCITS ETF, accurate as at 9 February 2026. That fund's ongoing charge is 0.20%, and the document says the figure "excludes portfolio trade related costs, except costs paid to the depositary and any entry/exit charge paid to an underlying collective investment scheme (if any)".
Read that twice. The fund's own dealing costs are not in the fund's headline charge, by design. They're disclosed separately, if at all, and they're real money either way. On the All-World tracker they add 0.03% to 0.14% — small, but a fifth again on top. The gap between a fund's headline figure and what it costs to own gets wider on funds that trade more.
Stamp duty doesn't vanish inside a fund, it moves to a different line
GOV.UK is direct about the rate: "When you buy shares, you usually pay a tax or duty of 0.5% on the transaction." It applies to "existing shares in a company incorporated in the UK". Buy £10,000 of a UK-listed company directly and that's £50, once.
The same page lists what escapes it, including when you "buy units in a unit trust from the fund manager". So a UK equity fund purchase carries no stamp duty for you. It carries it for the fund. Vanguard's glossary defines the transaction cost line as "all costs and charges incurred as a result of the acquisition and disposal of underlying investments within the fund", and says it "includes broker commissions, entry and exit charges, spreads, stamp duty, transactions tax, and foreign exchange costs".
Three of my seven layers reappear inside a fourth. That's what assembly reveals and a single tariff page can't: the layers aren't independent bills, they're the same costs charged at different points depending on how you buy.
The relocation is usually favourable, because a fund pays the duty on its own turnover rather than on your whole holding. Vanguard's FTSE U.K. All Share Index Unit Trust discloses 0.06% of ongoing costs and 0.00% of transaction costs. That 0.00% is a rounding convention, not a zero — the same document notes that "transaction costs less than 0.01% will be displayed as 0.00%". Even so, an index fund holding UK shares reports under a fiftieth of the 0.5% you'd pay to buy those shares yourself.
Move the same portfolio into an ISA and the ranking inverts
Dividends inside an ISA aren't taxed, so the largest bar disappears. The recurring bill on the same £50,000 falls from £234.25 to £127.00 a year. The ongoing charge, £70, becomes the biggest layer at 55.1% of the total.
That's the same portfolio, the same platform and the same fund. The layer you'd rationally attack first has changed, because the wrapper changed. Capital gains tax behaves the same way and can't be put on this chart: the annual exempt amount is £3,000 for 2026 to 2027 and the rate on shares is 24% for a higher-rate payer, but the bill only arrives when you sell, and its size depends on a return nobody can supply in advance.
Hold it as a fund rather than an ETF and the platform layer triples
AJ Bell's custody charge splits by instrument type. Funds are charged 0.25% on the first £250,000 with no cap. Shares and ETFs are charged 0.25% capped at £3.50 a month. On £50,000 that's £125 against £42 — an £83 gap created by nothing except the legal form of the holding.
The comparison isn't hypothetical. Vanguard's FTSE Developed World ex-U.K. Equity Index Fund discloses ongoing costs of 0.14% and transaction costs of 0.04%, near-identical to the All-World ETF's 0.14% and 0.03%. They track different indices, so they're not substitutes. But two products with the same headline charge produce a bill £83 apart on this one tariff, and neither factsheet mentions it.
Under about 3.1 years, getting in costs more a year than the fund does
The one-off layers total £220 on this portfolio: £200 of currency conversion, £15 of spread, £5 of dealing. Set against a £70 ongoing charge, they take 3.1 years to fall below it in annual terms.
Hold for three years and those one-offs run at £73.33 a year, above the fund charge and second only to dividend tax. Hold for 20 and they run at £11 a year, below the fund's internal dealing costs. Nothing about the charges changed. Only the divisor did.
This is why cost tables that mix entry costs and annual costs without stating a horizon can't be ranked at all. It's also why the currency layer is the strangest one on the list. At £200 it's the second-largest single payment you make, and it's the easiest to remove: the same fund has a sterling line, and buying that instead costs nothing extra.
Three levers, and the one people pull hardest is the smallest
Take the three decisions that move this stack, sized in pounds a year on £50,000.
- Pick a cheaper tracker. Vanguard's FTSE Global All Cap Index Fund discloses 0.23% of ongoing costs against the All-World ETF's 0.14%. That 0.09 point difference is worth £45 a year.
- Change the instrument type. £83 a year, from the platform's capped versus uncapped bands.
- Change the wrapper. £107.25 a year, from the dividend tax the ISA removes.
Fund selection is the lever with the most published comparison data, the most commentary and the smallest effect of the three. It's also the only one of the three that's genuinely free to pull, which is a fair reason to pull it. The point isn't that 0.09 points doesn't matter. It's that £45 was the smallest number on a list nobody assembles.
The strongest objection: a ranking that flips under every assumption isn't a ranking
Here's the serious criticism of everything above, and it's mostly right. I chose the portfolio. Change the wrapper and the top bar vanishes. Change the instrument and the third bar triples. Change the holding period and the bottom four reorder. Change the platform and the cap moves. A number that unstable is a sensitivity table wearing a ranking's clothes.
Two things survive the objection. The first is that the ongoing charge was never the largest layer in the unwrapped case and never more than 55.1% of the bill in any case tested — so the layer with the most attention is, at best, half the problem. The second is that the layers differ enormously in what it costs you to change them, and size alone doesn't capture that. Cancelling the currency charge takes one different ticker. Cancelling the dividend tax on an existing unwrapped holding may mean realising a gain first. A big layer you can't move is worth less attention than a small one you can.
There's a second objection worth stating. The disclosed transaction cost figures are produced by the regulator's slippage method, which compares the price a trade executed at with the price when the order arrived — and it can return negative numbers. Vanguard's ESG Global All Cap ETF discloses ongoing costs of 0.24% and transaction costs of −0.02%. The document concedes that "transaction cost calculations may result in negative transaction costs". A measure that can go below zero is not a precise input to a ranking.
What this stack cannot tell you
It's one platform's tariff and one fund family's disclosures, on one day. A different platform with a flat monthly fee moves the third bar in both directions depending on portfolio size, and the whole exercise is a snapshot of prices that change.
The dividend figure is an index yield, not the fund's actual distribution, so the £107.25 is an estimate of the layer rather than a bill anyone received. The transaction cost figures are backward-looking, as at 31 December 2025, and a fund whose index reconstitutes heavily can look cheap and dear in consecutive years.
Two real costs are missing entirely. Withholding tax on foreign dividends is deducted before the fund ever receives the income, so it never appears on a tariff — the piece on how domicile decides the withholding rate covers it. And securities lending runs the other way, returning revenue to the fund; the manager's share of that revenue is disclosed in annual reports, not in any cost table. Neither is in the £245.25.
Finally, none of this measures whether the fund did its job. A fund can be cheap on every line here and still trail its index; the gap between a fund's return and its index captures outcomes that no cost disclosure does. LedgerTouch tracks the layers you're actually charged; it can't tell you which of them bought you anything.
What would change the ranking
If every platform capped its percentage fee, custody would stop scaling with portfolio size and settle as a fixed number. On £50,000 that's the difference between £125 and £42. Above a few hundred thousand pounds, a capped fee becomes a rounding error while every other layer keeps growing.
If the dividend allowance changed, the largest bar moves before anything else does. At £500 for 2026 to 2027, a £50,000 portfolio yielding 1.60% has £300 exposed. A larger allowance would erase the top layer for a portfolio this size; a smaller one would widen the gap between wrapped and unwrapped further.
If funds disclosed one all-in number, the argument in this piece would stop being necessary. The regulator already requires the fund's dealing costs to be measured; the factsheet still shows a figure that excludes them. Until those two numbers merge, the most visible cost figure will keep being the one that leaves things out.
The number worth watching isn't any single charge. It's the ratio between the headline figure and the assembled total — 0.14% against 0.49% here, a factor of 3.5. When that ratio is close to one, the factsheet is telling you the truth. When it isn't, the layers you never priced are doing the work.