Do UK CFD brokers charge overnight financing fees?
Verdict
- Yes. UK CFD and spread betting firms, Pepperstone included, charge overnight financing on leveraged positions kept open past the daily cut-off, which Pepperstone sets at 10 pm UK time.
- The charge is a daily interest amount on the full value of the position, not just the margin, so it grows with position size and with how long you hold.
- Pepperstone's swap-free account is limited to residents of 23 listed countries, and the UK is not one of them.
- If you trade intraday and close before 10 pm UK time, you pay no overnight financing at Pepperstone.
Overnight financing is the cost of borrowing to hold a leveraged position, and every UK firm we have looked at charges it in some form. Pepperstone, our top pick for UK traders, publishes the cut-off and shows the rate per market in its platforms, so you can price a hold before you open it.
When Pepperstone charges it
Pepperstone's UK costs page says overnight fees apply to positions held past 10 pm UK time, on spread bets and CFDs alike. Close before then and there is nothing to pay for that day. The account itself carries no inactivity or maintenance fee, so financing and the spread (plus commission on Razor) are the main costs of a held position.
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How do brokers calculate overnight swap charges?
The method is broadly the same across the industry, though rates differ by broker and market. For index, share and commodity CFDs, the broker takes the full value of your position and applies an annual rate made up of a benchmark interest rate plus or minus its own charge, divided by the number of days in the year. Long positions usually pay; short positions may pay less or receive a small credit. On currency pairs the rate reflects the interest-rate difference between the two currencies, which is why the swap on a pair can be positive one way and negative the other. Most platforms show the current long and short swap for each market in its contract details.
- Worked example (illustrative rate): a £10,000 long index position at an assumed 6.5% a year costs about £1.78 a night (£10,000 × 6.5% ÷ 365).
- Held for 20 nights, that is about £36, before any change in the rate.
- Ask your broker how weekend nights are charged, as the timing varies between firms.
Why financing matters more than it looks
Because the charge is on the full position, leverage multiplies it relative to your margin. At the UK retail limit of 1:20 on a major index, a £10,000 position needs £500 of margin, but you pay interest on all £10,000. Over a few weeks, financing can cost more than the spread you paid to enter.
Ways to keep the cost down
- Close day trades before the cut-off (10 pm UK time at Pepperstone).
- Check the long and short swap in the platform before choosing direction on a multi-day trade.
- For long-term holdings, compare the financing bill with buying the underlying asset outright.
- Do not plan around a swap-free account at Pepperstone: UK residents are not eligible.
Sources
Overnight fee terms published by Pepperstone.
Do spread bets have overnight financing in the UK?
Yes. Rolling spread bets held past the cut-off pay overnight financing; Pepperstone applies it after 10 pm UK time.
Can I get a swap-free account as a UK resident?
Not at Pepperstone; its swap-free account covers residents of 23 listed countries, and the UK is not on the list.
Is overnight financing charged on the margin or the whole position?
On the whole position value. That is why it can be large relative to the cash you put up.
Holding leveraged CFDs or spread bets overnight adds financing costs to an already high-risk product; you can lose money rapidly. Example rates are illustrative only. This page is not investment advice.