| Updated: January 15, 2025Forex is a popular investment vehicle in the UK, with over 400,000 residents regularly engaging in currency pair trading. To navigate this market, it’s essential to understand what is legal in the country, what is not, and how to identify reliable brokers approved by the local financial watchdog.
The forex market is overseen by the UK Financial Conduct Authority (FCA), ensures licensed brokers satisfy its stringent requirements and operate in the best interests of their British customers. Considering the tax implications is also a good idea. We cover all this and more in the following article.
Below you can find a list with Forex brokers regulated in the UK:
Top 9 Forex Brokers in the UK
-
IG
- Offers different account types, including DMA (Direct Market Access) one
- Offers turbo warrants on forex pairs, commodities, indices, and equities
- Supports popular platforms like MT4 and TradingView as well as ProRealTime, L2, and more
Trading Instruments- CFDs on Indices
- Shares
- Crypto
- Futures
- Commodities
- Options
- Interest Rates
- Sectors
- Bonds
- Knock-out trading
-
Plus500
- Multi-Level Regulated Broker
- Proprietary trading platforms
- Easy to use mobile app
Trading Instruments- CFDs on: Forex
- Crypto
- Indices
- Commodities
- Stocks
- Options
- ETFs
-
Fusion Markets
- Australia regulated broker
- MT4, MT5, TradingView, Ctrader
- Leverage up to 500
-
FP Markets
- Australia & CySEC regulated broker
- MT4/MT5, TradingView, Ctrader, Iress
- EUR/USD spread from 0.0 pips
Trading Instruments- Forex CFDs
- Shares CFDs
- Metals CFDs
- Commodities CFDs
- Indices CFDs
- Crypto CFDs
- ETF CFDs
-
Pepperstone
- Australia & CySEC regulated broker
- MT4/MT5, TradingView, Ctrader, Iress
- EUR/USD spread from 0.0 pips
Trading Instruments- Forex
- Indices
- Commodities
- Cryptocurrencies
- Share CFDs
- ETFs
-
eToro
- Popular broker for social trading
- Trading is conducted on innovative in-house platform
- Offers both investing and trading products
Trading Instruments- CFDs on Forex
- Stocks
- Commodities
- Crypto
- ETFs
- and Indices
-
Admirals
- Trade using MetaTrader 4 and 5, as well as Admirals' specialized plugins for additional functionality.
- Access forex, shares, indices, commodities, ETFs, bonds, and cryptocurrency CFDs.
- Admirals is overseen by top-tier regulatory bodies: FCA, ASIC, CySEC, and EFSA, assuring transparency and customer security.
Trading Instruments- CFDs on Forex
- Indices
- Stocks
- Commodities
- Bonds
- ETFs
- Cryptocurrencies
-
BlackBull Markets
- Broker boasting lightning-fast execution speed
- ECN brokers with tight spreads from 0.0 pips
- $0 minimum deposit requirement
Trading Instruments- Forex
- Commodities
- Futures
- Indices
- Stocks
- Cryptocurrencies
-
FxPro
- NDD broker offering deep liquidity and ultra-fast execution
- Over 99% instant order executions with no requotes
- Supports MT4, MT5, cTrader, and a proprietary platform
Brokers Compared by Spread
| Brand | Commission per lot | |
|---|---|---|
| IG | 0.86 av.spread | $0 |
| Plus500 | 1.2 | $0 |
| Fusion Markets | 0.93 avg (Classic) | $0 Classic Account, $4.50 round turn on Zero Account |
| FP Markets | 1.1 | $0 Standard Account; $6 round turn on Pro Account |
| Pepperstone | 1.00 (min) | $0 (Standard Account), $7 round-turn (Razor Account) |
| eToro | 1.0 | $1 or $2 (stocks only) |
| Admirals | 0.1 | $3 per lot |
| BlackBull Markets | 0.1 | $0 Standard; $6 per lot Prime; $4 per lot Institutional |
| FxPro | 0.25 | $0 on Standard Account; $3.5 per side on Raw+ and Elite Accounts |
FX Brokers Deposit Method Comparison
| Brand | Minimum deposit | |
|---|---|---|
| IG |  |
$0 |
| Plus500 |  |
$100 |
| Fusion Markets | |
$0 |
| FP Markets | |
$50 (AU$100) |
| Pepperstone | |
$0 |
| eToro | |
$50 or $100 based on country ($10 for the UK, $1 in the US) |
| Admirals | |
$100 ($1 for Invest MT5 Account) |
| BlackBull Markets | |
$0 (Standard)$2,000 (Prime)$20,000 (Institutional) |
| FxPro | |
$100 |
Brokers by Regulator
| Brand | Maximum leverage | |
|---|---|---|
| IG | |
1:30 |
| Plus500 | |
1:30 |
| Fusion Markets | |
1:30 (1:500 for forex and metals via VFSC) |
| FP Markets | |
1:30 |
| Pepperstone | |
1:30 |
| eToro | |
1:30 (1:400 advanced leverage at Seychelles entity) |
| Admirals | |
1:30 |
| BlackBull Markets | |
1:500 |
| FxPro | |
1:30 |
Forex Brokers Platform Availability
| Brand | FX pairs to trade | |
|---|---|---|
| IG | |
80+ |
| Plus500 | |
60+ |
| Fusion Markets | |
80+ |
| FP Markets | |
70+ |
| Pepperstone | |
90+ |
| eToro | |
55 |
| Admirals | |
82 |
| BlackBull Markets | |
70+ |
| FxPro | |
70+ |
Comprehensive Comparison of the Best UK Forex Brokers
| Brand | Min. Deposit | Trading Platforms | Spread | Regulation | Trustpilot |
|---|---|---|---|---|---|
 |
$0 |
|
0.86 av.spread |
|
|
 |
$100 |
|
1.2 | ||
 |
$0 |
|
0.93 avg (Classic) |
|
|
 |
$50 (AU$100) |
|
1.1 |
|
|
 |
$0 |
|
1.00 (min) |
|
|
 |
$50 or $100 based on country ($10 for the UK, $1 in the US) |
|
1.0 |
|
|
 |
$100 ($1 for Invest MT5 Account) |
|
0.1 |
|
|
 |
$0 (Standard)$2,000 (Prime)$20,000 (Institutional) |
|
0.1 |
|
|
 |
$100 |
|
0.25 |
|
Legal Forms of Forex Trading in the UK
Several forms of forex trading are legal in the UK, each with its unique characteristics and benefits. It is vital to understand how these work before you dive head-first into the forex market. This will enable you to make better-informed decisions and manage your risk more adequately. Without further ado, here are the most popular forms of legal forex trading in the UK.
-
Spot Trading
Spot trading, for instance, involves the immediate exchange of currencies at the current market price, with traders owning the underlying asset. Here your goal is to buy a given base currency at a lower price and sell it later when its value appreciates against the quote currency in the pair.
-
Contracts for Difference (CFDs)
Contracts for difference (CFDs) are also legal in the UK, enabling traders to speculate on currency price movements without actually owning the underlying asset. You can profit from rising and falling prices of currency pairs and increase your market exposure using leverage. We shall elaborate more on this later.
-
Spread Betting
Spread betting on currency pairs, on the other hand, allows traders to bet on the direction of price movements, with the potential for tax-free profits. The practice involves guessing the direction of a currency pair’s price fluctuation and your goal is to profit from the difference between the buy and sell prices.
For example, a trader might bet that the value of the GBP/USD pair will appreciate. If the price moves in their favor, they receive a payout based on the amount they have bet and the number of pips corresponding to the change. If the price moves against them, they will suffer a loss.
-
Forex Futures and Options
UK residents can also legally engage in forex futures, options, and forwards trading. Forex futures contracts are standardized agreements to buy or sell a specific currency pair at a predetermined price on a specific date. This complex instrument allows traders to lock in a price and use it for hedging purposes to mitigate risk.
Options contracts, on the other hand, give traders the right, but not the obligation, to buy or sell a currency pair at a specified price, known as the strike price, before a certain date. Options pose a flexible way to manage risk and speculate on price movements, with the premium paid for the option being the maximum potential loss.
-
Forex Forwards
Forex forwards are customized contracts between two parties to buy or sell a specific currency pair at a predetermined price on a prearranged date in the future, allowing traders to tailor the terms of the contract to their individual needs and hedge against exchange rate risks.
Restrictions on Currency Trading in the UK
The UK financial regulatory body (UKGC) imposes several restrictions on currency trading to protect local consumers and maintain market integrity. One key area of focus is the prohibition of Contracts for Difference (CFDs) involving cryptocurrencies. These were altogether banned in the country in early January 2021 due to their high level of risk. This basically means local traders cannot speculate on the price movements of crypto against fiat currencies. CFDs on pairs like BTC/USD are unavailable at UK-regulated brokers.
Additionally, the UK has banned the sale of binary options to retail traders, citing concerns over their similarity to gambling products. These restrictions aim to prevent locals from taking on excessive risk and promote a more stable and transparent trading environment. By limiting access to high-risk products, the UK regulators hope to reduce the number of traders who suffer significant losses and to promote a more responsible approach to currency trading.
Who Regulates Forex Trading in the UK
The Financial Conduct Authority (FCA) is the primary regulator of forex trading in the UK. Established in early April 2013, under the Financial Services Act of 2012, the FCA is an independent body responsible for regulating the UK’s financial services industry. It consists of a Board, which sets the overall strategy and regulatory direction, and several divisions, including the Authorisations, Supervision, and Enforcement divisions.
The FCA’s regulatory responsibilities include overseeing the conduct of financial services firms, ensuring they operate with integrity and fairness, and protecting consumers from harm. In the context of forex trading, the FCA is responsible for regulating forex brokers, ensuring they comply with strict rules and guidelines, such as maintaining adequate operating capital, providing transparent pricing and reliable order execution, and safeguarding client funds.
Banks, insurance companies, investment firms, pension providers, and credit unions also fall under its regulatory gaze. The FCA also works to prevent market abuse, such as insider trading and manipulation, and to promote competition and innovation in the forex market.
Requirements for Forex Brokers in the UK
UK-licensed forex brokers must meet strict requirements to operate, ensuring a safe and transparent trading environment. These regulations protect traders from excessive risk and help preserve the integrity of the local financial markets by promoting trust and confidence among market participants. All brokers regulated in the country must adhere to the requirements listed below.
- Negative balance protection: All brokers must provide negative balance protection to prevent retail traders from losing more than their initial deposits, safeguarding them from slipping into debt.
- Investor compensation: Licensed brokerage must provide up to £85,000 in compensation through the Financial Services Compensation Scheme (FSCS) in the event of insolvency.
- Retail leverage restrictions: Retail leverage is capped at 1:30 for major pairs and 1:20 for minor pairs to mitigate risk for inexperienced forex traders. Professional traders have access to higher leverage.
- Clear and prominently displayed risk disclaimers: UKGC licensees must inform traders about the potential risks and consequences of leveraged derivatives like the CFD, allowing them to make more informed decisions.
- Fund segregation: The brokers must keep client funds separately from their own assets and operating capital, preferably in first-tier local banks.
- Automatic margin closeouts: The licensees must automatically close out losing leveraged positions to prevent further mounting losses.
- Transparent pricing and execution: This requirement ensures fair and accurate pricing, with the best possible order execution, promoting trust and confidence in the broker.
Are There Taxes on Profits from Forex Trading in the UK?
In the UK, profits from forex trading may be subject to taxation, but it all depends on the individual’s circumstances and the type of trading activity. For example, profits from spread betting on currencies are generally exempt from capital gains and income taxes, making it a popular choice for UK traders. However, profits from other forms of forex trading, such as CFDs and spot trading, are typically subject to capital gains tax, which ranges from 10% to 20% depending on the individual’s income tax bracket and the amount of gains.
Basic-rate taxpayers pay 10% on gains up to £50,000, while higher-rate taxpayers pay 20% on gains exceeding this amount. It is essential for UK traders to understand their tax obligations and keep accurate records of their trading activities to ensure compliance with HMRC regulations. Consulting a tax professional or financial advisor can help traders navigate the complexities of taxation and minimize their tax liability.
How to Identify Reliable Forex Brokers Accepting UK Clients
When searching for a reliable forex broker in the UK, it’s essential to conduct thorough research and due diligence. A reputable broker can provide a safe and secure trading environment, while a dishonest one can lead to significant financial losses. To avoid potential pitfalls, UK traders should look for brokers that meet specific criteria.
- UKGC licenses ensure the brokers adhere to strict operational requirements and offer the necessary consumer protection to retail customers.
- Price transparency is another essential aspect to consider. There should be no hidden fees or commissions, enabling traders to make informed decisions.
- Strong regulatory compliance demonstrates a commitment to adhering to strict standards and reduces the risk of fraud and manipulation.
- Positive customer reviews indicate a high level of customer satisfaction and trust in the broker.
- Secure and reliable trading platform: offers a stable and user-friendly platform, with robust security measures to protect traders’ funds and personal data.
- Competitive spreads enable traders to optimize their trading strategies and minimize costs.
- Effective customer support should be available via multiple channels of communication, to quickly assist traders with their queries and concerns.
FAQ
What is the minimum deposit required to start trading with a UK forex broker?
The minimum deposit required to start trading with a UK forex broker varies depending on the broker. Some brokers may require a minimum deposit of £100, while others may have higher or lower requirements. Traders should check the broker’s website or contact their customer support to confirm the minimum deposit requirement.
What trading platforms do UK forex brokers support?
UK forex brokers typically support a range of trading platforms, including MetaTrader, TradingView, cTrader, and proprietary platforms. All great brokers also offer mobile trading apps, allowing traders to access the markets from any location.
Will I get in trouble for trading with a broker regulated outside the UK?
Trading with a broker regulated outside the UK may pose risks, as these brokers may not be subject to the same regulatory requirements as UK-based brokers. While it’s not necessarily “trouble” to trade with a non-UK regulated broker, traders should exercise caution and ensure they understand the risks involved.
Are professional traders in the UK entitled to negative balance protection?
Professional traders in the UK are not entitled to negative balance protection, as they are considered to be more experienced and aware of the risks involved. However, retail traders are protected by negative balance protection, which prevents them from losing more than their initial deposit.
What are the average spreads at UK forex brokers?
The average spreads at UK forex brokers vary depending on the broker, the currency pair, and market conditions. However, traders can expect to find competitive spreads, ranging from 0.5 to 1 pip for major currency pairs, such as EUR/USD and GBP/USD. Traders should compare spreads across different brokers to find the most competitive rates.
Why You Should Trust RationalFX
When it comes to making informed decisions about forex brokers, it’s essential to rely on trustworthy sources. RationalFX, a company with over 17 years of experience since its founding in 2005, has established itself as a credible authority in the industry. With an impressive collection of over 2500 reviews on Trustpilot, boasting a score of 4.2, it’s clear that Rational FX has built a reputation for providing reliable and unbiased information.
What sets Rational FX apart is its rigorous evaluation process, which considers over 30 different criteria when selecting forex brokers. This comprehensive approach ensures that every aspect of a broker’s service is taken in consideration, including regulation, forex spreads, trading platforms, deposit methods, and reputation. With its wealth of experience, transparent review process, and outstanding customer feedback, Rational FX is a trusted source for anyone seeking reliable information on forex brokers. You can reach us via e-mail at [email protected] or contact us through our social media accounts here: Facebook, YouTube, or leave a feedback here.