Times are more than a little tricky right now. With the cost of living crisis in full swing, and inflation reaching record highs, our money seems to matter more than ever before. We all know the importance of saving and investing, but as things get tighter, we need to know that we’re making the best decisions possible. That’s why this Plum investment review is very timely.
The truth is that there are probably now more ways to invest than ever before. The rise and rise of Fintech companies can only be described as a blessing. One that has made investing accessible to almost anyone. The only problem that this has caused is that there is now such a wide selection, that it can be confusing when it comes to deciding where you should invest. That’s where this Plum Investment review will help.
Plum Investment Review
In this Plum Investment review, we’re going to cover all that you need to know about this app. By the end, you’ll have the full picture and will be able to decide if Plum is the best option for you. Some of the things that we’re going to be covering include:
- How Plum actually works
- If it’s a safe place to be putting your money
- The different investment funds that are available
- The costs involved
- Anything to be aware of
Of course, there are other investment apps to consider. Whether Plum is right for you is all down to your personal circumstances and what you’re trying to achieve. You can explore our article that covers a round-up of the best apps that exist before making up your mind.
With that being said, let’s dive in now and find out what Plum is all about.
Plum Money Saving App – How Does it Work
Plum is a clever saving and investments app. It makes saving and investing money as easy as possible. It does this by linking with your bank and then analysing your spending. Once it’s done this, it works out how much you can afford to put away each month. This amount is automatically deducted on a regular basis, and the nice thing is you can set the intensity level.
The money that Plum deducts can be placed into saving pots or it can be used to invest. Although Plum automates things, you still have complete control. If you feel the amount being put away is either too much or too little, you can edit this. If one month you’d rather no funds were deducted, you have control of this too.
The people behind Plum are Victor and Alex. They are both from Cyprus and were working and living in the UK. They set up a savings challenge between them and this led to Alex developing something that could analyse his spending. It was this early algorithm that led to the development of Plum as we know it today.
Investing with Plum – Is it safe?
One of the most important parts of a Plum Investment review is taking a look at the app and how safe it is for users. The first positive point here is that Plum is regulated by the Financial Conduct Authority. This means that it must follow strict rules around being transparent and not being misleading.
You can choose to hold your funds with Plum in an instant access account. If you do this, your money is placed in a red circled UK bank account and is protected by E-Money Safeguarding Rules. However, your funds in this account are not protected by the Financial Services Compensation Scheme (FSCS).
If FSCS protection is a big factor for you, and it should be, then there is still good news here. If your money is held in an easy-access account, or within an investment account, it is covered just like it would be at any bank.
Plum Investment Funds – Stocks and Shares or General Savings?
When it comes to your investment decisions, with Plum you can opt for a Stocks and Shares ISA or a General Investment account. If you opt for the ISA option then you have the benefit of any returns being free from tax. However, legislation limits how much you can invest in this way each financial year. The current limit is set at £20,000, but this can change so it’s always worth checking out.
With a Plum General Investment account, you’re not limited to the same deposit level. However, you will need to pay tax on any returns that are generated through the investments.
Plum offers 12 funds that can be invested in. These all come with varying levels of risk. While high-risk options can bring bigger returns, the volatility means that there is an increased chance that you could lose out. It’s worth bearing in mind that, with all investments, your capital is at risk.
Plum Investment Fees – How Much Does It Cost?
This may be the first section of our Plum Investment review that you jump to. After all, we’re all keen to know what things are going to cost us. When it comes to Plum, the amount that you’ll pay depends upon the account that you choose. The basic version, which allows you to save automatically, is completely free of charge.
If you want to be able to invest, and benefit from other features then you’ll need to subscribe to the Plus, pro, or Ultra version. These cost £1, £2.99, and £4.99 a month respectively.
If you opt to invest with Plum, rather than just save, there are other charges on top of the monthly subscription. You will also need to pay an annual fund management fee and a product provider
fee. On average, you can expect this to cost around 0.48% of your investment. The provider fee sits at 0.15% while the fund management fee ranges from 0.06% up to 0.905.
Plum Investment Review – My Experience
To make a Plum investment review worthwhile, it needs to be tried out. You’ll find many reviews that exist and don’t really have any practical experience of what they are reviewing. We like to be different.
The reality is that it’s early days with using Plum. What can be said is that the sign-up process is extremely easy and the app is as user friendly as it gets.
I like the fact that plum offers a vast array of funds to invest into, and they each have different themes. I chose “growth ethical” because it’s important to me that my money goes towards companies that help the planet.
Plum Investment performance
The important thing to state here is that past performance is by no means a guarantee as to what will happen in the future. The figures that Plum presents on its website are correct as of May 2022 and show that the average growth in an investment account is 8.07%. This makes the returns substantially better than what you’d earn through interest in a bank account.
As an example, if you were to invest £50 a month into a savings account over a 10 year period, you’d now have a pot that’s worth just over £6,000. If you used the same funds each and invested, you’d now have a pot that’s worth almost £9,000.
Investing with Plum – Things to be aware of
An important part of a Plum Investment review is to provide balance. There is nothing that is completely perfect and, just like everything else, Plum has a couple of things to be aware of.
Firstly, as we’ve already seen, if you decide to leave your money in a primary pocket, there is no FSCS protection. This scheme covers people should their bank go bust while holding their funds and protects up to the value of £85,000. Plum offers this protection elsewhere, just not in the primary pocket.
The second point to be aware of is the charges for investing. If you’re investing small amounts, these fees are a little on the high side and you could find it cheaper elsewhere. On the flip side of this though, you can start investing with just £1 and that means that it’s open to everyone.
Lastly, with Plum, you need to pay to access nearly all of the features that are worth having. While the lowest subscription is just £1, there are other providers who offer the same, or similar, features, for free.
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Plum Investment Review – Conclusion
Overall, Plum is certainly a handy app and it provides a great introduction to investing. the automated side of things is very clever, but it’s also reassuring to know that you can override this at any time that you want to. There’s also reassurance in the fact that Plum is regulated by the FCA and, when it comes to investments, offers FSCS protection.
Is it Worth Investing through Plum?
In short, yes it is. Although the fees may be a little on the high side for those who are investing smaller amounts, Plum still represents value for money. When you consider how Plum has performed over the years, then these fees become almost insignificant.
Of course, it’s always worth comparing with other providers, such as Moneybox. You may find others that are better suited to you personally. However, in our opinion, you can go far wrong with Plum and it is certainly with using as an investment tool.
Until next time,