There are fees attached to forex trading. One of these charges is the spread. A currency pair or any CFD instruments usually have two price quotes for it – the bid price and the ask price. The spread is the difference between the two prices and is measured in pips.

The spread is the most important of all trading fees. Some forex brokers do not charge commissions or swaps. You will hardly find a forex broker without spreads. This is why you should know about this particular fee.

When the spread for a forex pair or CFD is high, you will pay more in terms of trading fees. This is why we have reviewed the best forex brokers with low spreads in the UK for you.

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Comparison of Best Low Spread Forex Brokers UK

Broker FCA Firm Regulated GBP/USD Spread (pips) Round-turn Commission Visit
Tickmill

Yes
0.1
£4 per standard lot (Pro Account), £2 per standard lot (VIP Account)
Visit Broker
CMC Markets

Yes
0.90
None
Visit Broker
Pepperstone

Yes
1.19 (Standard Account)
£4.5 per standard lot (Razor Account)
Visit Broker
AvaTrade

Yes
1.5
None
Visit Broker
City Index

Yes
1.8
None
Visit Broker
ETX Capital

Yes
1.85 (MT4 Account)
None
Visit Broker

Note: The spread data & commission is as per information on these brokers’ websites in Mar. 2022.

Best Low Spread Brokers in the UK

Here the list of best low spread brokers in the UK as per our research:

  1. Tickmill – Forex Broker with Lowest Spreads in the UK
  2. CMC Markets – Low Spread Broker with Most CFD Instruments
  3. Pepperstone – Forex Broker with Social Trading
  4. AvaTrade – XFD Broker with Temporary FCA Regulation
  5. City Index – Low Spread Broker with FCA Regulation
  6. ETX Capital – FCA Regulated Broker with Moderately High Spreads
  7. Warning: Low spreads do not guarantee the safety of your funds. Make sure the CFD broker is regulated with the FCA to reduce the risk of fraud.

    #1 Tickmill – Forex Broker with Lowest Spreads in the UK

    GBP/USD Benchmark:
    0.1 pips
    Major Pair with Highest Spread:
    USD/CHF (0.4pips)
    Account Minimum:
    £100

    Tickmill has the lowest spreads for major pairs compared to other brokers. The typical spread for EUR/USD and GBP/USD are 0.1 pips and 0.3 pips respectively. Tickmill is regulated with the FCA so they are low-risk.

    The typical spread for other major pairs is low too. USD/CHF has the highest spread among the major pairs (0.4 pips). This shows how low the spreads are with Tickmill.
    For other trading fees, Tickmill charges a swap on long and short positions and they are quite high. They also charge a commission on their Pro Account (£4 per standard lot) and VIP Account (£2 per standard lot). Their commission is one of the lowest compared to other brokers.

    The spread for other major pairs is shown below

    Major Pairs Spread
    EUR/USD 0.1
    USD/JPY 0.1
    USD/CAD 0.2
    AUD/USD 0.1
    NZD/USD 0.3

    #2 CMC Markets – Low Spread Broker with Most CFD Instruments

    GBP/USD Benchmark:
    0.90 pips
    Major Pair with Highest Spread:
    NZD/USD (1.5pips)
    Account Minimum:
    £0

    CMC Markets rank second in our review. They offer low minimum spread for major pairs at 0.70 pips for EUR/USD and 0.90 pips for GBP/USD. CMC Markets are considered low-risk because of FCA regulation.

    With a minimum spread of 1.5 pips, NZD/USD has the highest spread among the major pairs. It is closely followed by USD/CAD with a 1.3 pips minimum spread.

    CMC Markets do not charge extra commissions per lot. Other trading fees include overnight charges for both long and short positions. This is the structure of trading fees on their CFD Account and Corporate Account.

    For non-trading fees, CMC Markets charge a £10 monthly inactivity fee and a premium fee for guaranteed stop-loss orders.

    Here are CMC Markets spreads for other major pairs

    Major Pairs Spread
    USD/CHF 1.00
    USD/JPY 0.70
    AUD/USD 0.70

    #3 Pepperstone – Forex Broker with Social Trading

    GBP/USD Benchmark:
    1.19 pips
    Major Pair with Highest Spread:
    NZD/USD (1.52 pips)
    Account Minimum:
    £0

    Pepperstone offers three accounts with different spread for major pairs. For this review, our focus is the Standard Account. The average spread for EUR/USD and GBP/USD on this account is 0.77 pips and 1.19 pips respectively. Pepperstone are regulated with the FCA so they are low-risk to trade with..

    NZD/USD has the highest spread among the major pairs (1.52 pips). It is followed by GBP/USD and USD/CAD (1.07 pips)

    Pepperstone charges an extra commission per lot on their Razor Account alone. (£4.5 per standard lot). On cTrader, they charge $3 per standard lot. There are also overnight charges that you can find on their trading platform. No account inactivity fee.

    The spread for other major pairs:

    Major Pairs Spread
    USD/CHF 1.09
    USD/JPY 0.86
    AUD/USD 0.84

    #4 AvaTrade – CFD Broker with Temporary FCA Regulation

    GBP/USD Benchmark:
    1.5 pips
    Major Pair with Highest Spread:
    USD/CAD (2 pips)
    Account Minimum:
    £100

    The spread for EUR/USD and GBP/USD is 0.9 pips and 1.5 pips respectively. AvaTrade’s regulation with the FCA is temporary. Their regulation is in another European Economic Area. They are considered moderate-risk.

    USD/ CAD is the major pair with the highest spread (2 pips). AvaTrade does not charge an extra commission per standard lot but you pay a swap for holding trades overnight. There is also an account inactivity fee

    The spread offered by AvaTrade for other major pairs are shown below:

    Major Pairs Spread
    USD/CHF 1.6
    USD/JPY 1.0
    AUD/USD 1.1
    NZD/USD 1.8

    #5 City Index – Low Spread Broker with Zero Commission

    GBP/USD Benchmark:
    1.8 pips
    Major Pair with Highest Spread:
    NZD/USD (2.8 pips)
    Account Minimum:
    £0

    City Index rank fifth in our review. They offer EUR/USD and GBP/USD at 0.8 pips and 1.8 pips. City Index are regulated with the FCA so they are low-risk to trade with.

    Of their major pairs, NZD/USD have the highest spread with 2.8 pips. USD/CAD follows at 2.6 pips.
    City Index does not charge extra commission. Their fees are calculated with the spread. They also charge swaps and account inactivity fees.

    The table below shows City Index’s spread for other major pairs:

    Major Pairs Spread
    USD/CHF 2.3
    USD/JPY 0.8
    AUD/USD 0.9

    #6 ETX Capital- FCA Regulated Broker with Moderately High Spreads

    GBP/USD Benchmark:
    1.85 pips
    Major Pair with Highest Spread:
    USD/CHF (2.76 pips)
    Account Minimum:
    £250

    ETX Capital offers EUR/USD and GBP/USD at 1.01 pips and 1.85 pips. These spreads are for their MT4 account only. ETX Capital is a low-risk broker because they are regulated.
    Update: ETX Capital used to be the trading name of Monecor (London) Ltd. In May 2022, Monecor (London) Ltd changed its trading name from ETX Capital to OvalX .

    ETX Capital has moderately low spreads compared to other brokers. USD/CHF has the highest spread at 2.76 pips. USD/CAD follows closely at 2.66 pips. A forex trader will likely incur more costs in spreads trading with ETX Capital.

    ETX Capital does not charge an extra commission per lot but there are overnight charges

    ETX Capital’s spread for other major pairs:

    Major Pairs Spread
    NZD/USD 2.20
    USD/JPY 1.35
    AUD/USD 1.49

    What are Forex Spreads?

    Spread is one of the ways CFD brokers make their money. When you place a trade, there is a difference between the price you are willing to pay for a currency pair and the price a seller is willing to sell. The difference between these two prices is referred to as the spread. You may be wondering how the spread which is measured in pips translates to money. We have this covered in another section of this article.

    Here are the common spreads in forex trading

    1) Variable spreads: A broker offers variable spreads if they pass on the best and bid price at a certain time. The variability depsends on the broker and the currency pair(s) or CFDs. Variable spreads are contantly changing and are cheaper when liquidity is high. However, they are subjected to high volatility due to economic new and macroeconomic events.

    2) Fixed spreads: Fixed spreads are consistent. For most of the time, they remain unchanged regardless of market conditions. It is easier to plan your trading fees with fixed spreads because they are not constantly changing like variable spreads. It is important to note fixed spreads can change dramatically during important news events. Other than this, they are constant.

    How to Check a Forex Broker’s Spread

    Forex brokers are usually transparent with their spreads. There is always a section of the website dedicated to this. Spreads are part of your trading fees and every broker has them. They are charged regardless of the result of your trade (profit or loss). This is why you should always check a broker’s spreads before signing up.

    Here is a systematic guide on how to go about it. Our example is CMC Markets.

    1) Go to CMC Markets website (make sure that you are visiting their actual website that is listed on FCA Register, to avoid any clones). You should arrive at the homepage shown below

    Broker website spread

    2) Move your cursor to markets and click on forex (in the yellow box)

    Searching Low Spreads

    3) When the page loads, you will find the spreads for currency pairs as shown in the image below.

    Low spread major pairs

    4) The page in (3) does not display the spread for all currency pairs. To find the rest, click on “view all our costs”. It will take you to the page shown below. All you need to do is enter the currency pair in the box and click on search. The currency pair with its minimum spread, margin, and holding costs.

    Low Spread for other pairs

    How to Calculate your Spread Cost

    It is one thing to know the spread your CFD broker attaches to a currency pair. However, this value is of no use if you do not know how much it is costing you in real money. This is why you should learn to calculate your spread cost.

    The simple formula to calculate your spread cost is (Lot size * Spread). Here is an example:

    Let’s say you want to buy 1 standard lot GBP/USD at a bid-ask price of 1.2636/1.2634.

    Remember that spread = bid price – ask price
    1.2636-1.2634 =0.0002 (2 pips)

    Spread Cost = 100,000 *0.0002 =$20.

    So this trade will cost you $20.

    How to Choose a Low Spread Broker in the UK

    In the previous section, we covered how you can check a broker’s spread. This is a major factor to consider when choosing a low spread broker. However, that is not the only factor you should look into. In this section, we cover the other important factors.

    Regulation: Low spreads do not guarantee safety. Trading with a regulated broker only guarantees that. After confirming a forex broker has low spreads, you have to confirm if your funds are safe with them. This is done by verifying if your broker is regulated with the FCA. Here is how you can go about this using pepperstone as an example.

    1) Check your broker’s regulation at the footnote of their website. Pay attention to the company name and reference number.

    Pepperstone Homepage

    From the image, you can see that the company name is Pepperstone Ltd with license number 648312. We need these details to correlate with the one on FCA’s website.

    2) On the FCA’s website, scroll down to the search area and enter the broker’s name. Select ‘Firms’ and click on ‘Search’.

    Pepperstone FCA Search

    The image below shows the final result. You can see that the detail match the ones we saw on the broker’s website. This is the simple way to verify a low spread broker’s regulation.

    Pepperstone UK Regulation

    Account type: It is common for a broker to have more than one account. Usually, the spreads on these accounts will differ. If one of the accounts is a raw ECN-type account, the typical spreads are usually low. Since you are looking to choose a low spread broker, you might as well go for the accounts with the lowest spreads.

    This is why you should check if your broker offers varying account types.

    Other trading fees: We have covered how to calculated spread costs. But spreads are not the only trading fees you incur. There are commissions and overnight charges too. For brokers with multiple account types, their ECN accounts usually combine low spreads with extra commission charges.

    Swaps can be high or low depending on the broker. These fees determine your total loss or profit per trade. This is why you have to check them to know if they are high or low.

    FAQs on Best Low Spread Forex Brokers in the UK

    Which Forex Broker has a Low Spread?

    As per our research Tickmill has very low spread. The have Pro Account with which they have spread starting from 0 pips, and the commission is £4/lot roundturn.

    What is a Low Spread Account?

    With Low spread accounts brokers charge very low spread fees. This means the difference between the bid & the ask price is very low, or close to zero. But such brokers charge fees in the form of commission. But the overall trading fees is still low. It is important to note that the spreads may be higher depending on the market conditions.

    Is there a Broker with 0 Spread?

    There are many brokers that advertise Raw spread or Zero spread, but the actual spread are likely to be higher than 0 pips during most of the times. Take into account that the advertised 0 pips does not mean that you will get 0 pips spread on all instruments, these are typical spreads which are variable.

    Which Forex Pair has the Lowest Spread?

    Generally, forex brokers determine the spreads of forex pairs. If the broker is ECN broker or STP broker, their spreads are usually low. In addition, major and minor currency pairs have low spreads compared to extoic pairs.

    Are Low Spreads Good in Forex?

    Low spreads only guarantee reduced trading fees (specifically, spread costs). However, low spreads should not be your sole reason for signing up with a broker. You need to consider other factors like FCA regulation, execution model, other trading fees, and their range of CFD instruments.

Tickmill has spread from 0 pips & $4/lot commissionVisit