Major bank with 6.6million customers sells key services affecting 150,000 users – what it means for your money

A MAJOR high street bank has sold a key service affecting 150,000 customers.

Virgin Money, which merged with Nationwide last October, has sold its investment business to Octopus Money.

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This deal will affect customers with stocks and shares ISAs, which let you save or invest up to £20,000 a year without paying tax.

It will also involve moving general investments and private pensions to Octopus Money’s platform, but this will only happen if approved by the Financial Conduct Authority (FCA).

Octopus Money, owned by the same parent company as Octopus Energy, plans to expand its investment services for individual customers as part of this acquisition.

Once the transfer is complete, Virgin Money’s investment division will operate under the Octopus Money brand, marking the end of Virgin Money’s presence in the investment market.

Ruth Handcock, chief at Octopus Money, said: “Our investment platform has always been closely tied to our mission – helping people feel confident they’ll have enough to live the future they want.”

Octopus Money has confirmed that investment account fees won’t change after the move.

When investing through ISAs or pensions, customers usually pay fees like platform charges, fund management fees, and transaction costs.

For example, Virgin Money charges 0.75% of your investment value annually.

This means you’d pay £75 per year for an account worth £10,000, or 75p for every £100 invested.

However, some financial experts have raised concerns about Octopus Money’s transparency, as the company does not openly display fees for personal investments on its website.

Consumer rights expert Martyn James said: “This is a reminder that whenever a big change occurs to a business or anything where you have a contract with a business, it is vital that you read the new documents and terms and conditions in detail.

“Business that takes over any financial agreement and applies new terms and conditions – including fees and charges – has to make this very clear when the new ownership begins.”

“If you aren’t happy, you should be given the chance to move your ISA/investment to another provider without fees as a consequence.”

Here’s what the proposed takeover means for you.

What does this mean for me?

If the deal is approved by the FCA Virgin Money expects the sale of the business to complete early in 2026.

For now, there are no changes to your service, investments, or fees.

You’ll continue to manage your account and receive support from Virgin Money as usual.

• Your money will remain invested as it is.
• Regular contributions will continue as normal.
• Your funds will still be protected by the FSCS (Financial Services Compensation Scheme) up to £85,000.

This change only applies to Virgin Money Stocks and Shares ISAs, Investment Accounts, and Pensions.

Other Virgin Money products, like cash ISAs, current accounts, mortgages, and credit cards, are not affected.

What happens next?

Virgin Money will continue to support customers until the transition is complete.

Updates will be shared through secure messages in your investment account or by post.

Once the deal is finalised:

• The Virgin Money Investments brand name will be replaced by Octopus Money.
• You’ll need to download a new version of the mobile app, which will work the same way but feature the Octopus Money name and logo.

Octopus Money plans to enhance services over time, adding new tools, easier account management, and more personalised support – but any changes will be introduced gradually after listening to customer feedback.

Your investments will stay in the same funds, and your fees won’t change as part of this move. 

However, you will have the option to transfer or close your account at any time if you choose not to stay with Octopus Money.

For now, Virgin Money’s support team remains your point of contact for any account-related questions.

Octopus Money will only step in after the transition is complete.

What if I want to move to another provider?

If you don’t want to move your stocks and shares ISA, investments, or pensions to Octopus Money, you can transfer to another provider.

Switching your stocks and shares ISA is usually straightforward, as your new provider will handle the process, but you should check with both your current and new providers for any possible fees or penalties.

There are two ways to transfer your ISA.

With an ‘in specie’ transfer, your existing investments are moved directly to your new provider without being sold, so you remain invested during the process.

This option is ideal if you are happy with your investments, but it can take longer, typically four to six weeks, and may involve exit fees.

Alternatively, with a cash transfer, your investments are sold, and the proceeds are sent to your new provider.

Your money retains its ISA status throughout the process, but it will be out of the market, meaning you could miss out on potential gains if the value of your investments rises.

Once you’ve chosen a new provider, you simply need to apply for the new ISA to get started.

If you’re transferring a general investment account, which isn’t within the ISA wrapper you can follow a similar process.

If you’re transferring a general investment account (not held within an ISA), the process is similar.

However, it’s usually better to transfer the funds via an in specie transfer to avoid triggering Capital Gains Tax (CGT).

Alternatively, if you haven’t used your full £20,000 ISA allowance, you could consider moving your investments into an ISA.

However, you can’t transfer investments directly from a general account to an ISA.

Instead, you can use a process called “bed and ISA.”

This involves selling your investments in the general account and then repurchasing them within an ISA.

This way, you end up with the same portfolio but in a more tax-efficient account.

Again, transferring your private pension to a new provider is generally straightforward.

Your new provider will typically handle most of the process, but it’s important to check for any exit fees or penalties from your current provider.

You can choose to transfer your pension as cash or as an in specie transfer.

Before transferring, ensure your new provider offers the features and investment options you need for your retirement goals.

How do Virgin Money’s fees compare?

Different banks and investment platforms have their own fees, which should be explained when you open an account.

These fees cover things like account management, fund costs, investment manager fees, and legal expenses.

High street banks often charge higher fees.

For example, Virgin Money charges investment customers 0.75% per year, so if your account is worth £10,000, you’d pay £75 annually.

Meanwhile, NatWest charges 0.55%, which is 55p for every £100 invested.

Specialist investment platforms, like Interactive Investor, often charge a fixed fee instead, which can be cheaper if you’re investing large amounts.

For example, Interactive Investor’s Investor Essentials plan costs £4.99 per month.

You can use websites such as moneyfactscompare.co.uk and Forbes to compare ISA providers and their fees.