The investment platform calculated that with a £100,000 ISA portfolio growing at 7% gross a year, a 1% annual charge would result in a pot of £320,720 in 20 years’ time.

Reducing the charge to 0.8% a year would mean a pot of £333,040 in 20 years’ time – £12,320 more.

Laith Khalaf, financial analyst at AJ Bell, said: “Investing in an ISA has never been easier, or cheaper, but it still pays for investors to keep a lid on costs wherever they can. It’s important not to throw the baby out with the bathwater, sometimes it can be worth paying more to get more, for instance for quality active management which delivers outperformance.

“But there are a number of ways investors can lower the charges they pay on their ISA, and over time those savings can add up to a significant pot of money.”

Five ways to reduce charges in an ISA

Use tracker funds and ETFs

There has been significant growth in the number of passive funds available to investors in the past 10 years, and these come with very low charges, usually about 0.1% or less for index trackers.

This compares to charges of about 0.75% for a typical actively managed fund. But, unlike an actively managed fund, passive funds don’t come with the prospect of outperformance.

Some active fund managers have demonstrated the ability to outperform over long timeframes, even after charges. However, many have not, so if you’ve got some funds which have continually failed to perform, consider replacing them with tracker funds to reduce portfolio costs.

Don’t overtrade

Every time you switch into and out of investments, there are costs to doing so, in the form of bid-offer market spreads, and potentially dealing commission and stamp duty, depending on what you’re trading.

There are sometimes very good reasons to sell out of one thing and buy into another, but doing so repeatedly without good cause will be a drain on your ISA portfolio because of the charges you’re racking up.

Consider investment trusts

While there are a range of charging structures available for both actively managed unit trust and investment trusts, there are a few more bargains to be had in the latter camp when it comes to charges.

A typical actively managed fund charges in the region of 0.75%, but some highly successful investment trusts are available for significantly less. Scottish Mortgage has an annual ongoing fee of just 0.36%, for example.

Consolidate ISAs

If you have ISAs scattered all over the place you may find you can reduce fees by consolidating them in one place. That may be a result of moving to a lower cost platform, or simply avoiding trading duplication.

If you hold BP shares in two separate ISAs and decide to sell out, then you will find yourself paying two lots of dealing commission. Holding your ISAs in one place will also make them easier to manage as a portfolio.

Keep it simple

As a rule of thumb, simpler investment products investing in mainstream markets tend to be cheaper than esoteric investments.

This is evident in both active and passive fund markets. For instance, the iShares Core FTSE 100 ETF costs just 0.07% per annum, while the iShares MSCI Brazil ETF carries a Total Expense Ratio of 0.74%.

If you want to gain exposure to an area, and it fits in your portfolio, that should be the driving reason for investment decisions. However, it pays to be aware of the additional costs likely to come from investing in more niche areas, as well as the risks, and so not to over-complicate your portfolio without good reason.