Plum review: Why this is the perfect solution for those who don’t have money to invest

Have zero investments or savings?

Plum is a solution I can happily recommend for anyone who would like to be saving or investing towards their future but doesn’t think they could ever afford to. It’s a very painless, uncomplicated way to put money aside without even thinking about it.

You can put that money straight into a high-yield savings account and easily move it across to investing once you’ve reached a decent amount. And, there is a pension account that has the best 10-year returns of any account we’ve analysed thus far. For a complete beginner with a very limited knowledge of the stock market, this is a great one-stop shop that can meet all your needs.

This is one of my top recommendations for Cash ISA as Plum has one of the leading interest rates to be found whilst protecting your gains from the taxman.

There is a simple range of savings and investment accounts here. It’s worth noting that interest rates differ between the various plans but the cash ISA rate is the second highest rate available at the time of writing.

Savings account

• Easy Access Savings – 4.00% AER
• Plum Interest – 4.96% VAR
• Cash ISA – 5.17% AER

These are great savings rates. I have my own cash ISA here (as of the 2024-25 tax year you are at liberty to open more than one ISA account) and I have no complaints so far. It’s a variable rate, which means it can change at any time.

It’s worth noting that the rate is only for the first 12 months, after which you will lose the bonus rate of 0.88% AER and go down to earning 4.29% AER. Also, the rate will drop to 3.00% if your balance drops below £100 or you withdraw more than 4 times.

Investing accounts

• Stocks and shares ISA
• SIPP

The stocks and shares ISA will give you access to the range of investment funds on offer at Plum. It is a limited selection, however, there are some pretty decent options in there which makes this an ideal choice for someone who doesn’t want to be overwhelmed but still wants to see their investment grow.

Of particular note is the Legal and General Tech Giants fund which has continued to see considerable growth for the past few years. Lack of choice needn’t be a negative thing, as long as the choices are good and I believe this is the case here. There is plenty of opportunity for diversification, and the introduction of individual stocks will offer an opportunity for investors who want to branch out into choosing their own assets to do so.

Plum SIPP

The pension product at Plum is worth going into more detail on. This is because here at Investing Insiders we did some research around the historical returns of the various platforms offering ready-made portfolios for pension savers.

Plum sits comfortably in the middle of the pack among their peers when you look at the 1-year returns; however, a more compelling comparison comes when you toggle between 3, 5, and 10-year returns. (The graph below is interactive, allowing you to choose between time frames in the top left).

However, portfolio returns are only part of the overall picture, and Plum isn’t always a cost-effective option. So we showed what their returns look like once you take off the fees you would have paid to achieve them and the results were still great. They are only beaten in this example by Moneybox; however, Plum had a better cash ISA interest rate at the time I wrote this review, so it would depend on what your overall purpose was as to whether this was going to be the best option.

This is a basic range of account types and assets; however, it covers all bases for most people just starting on saving and investing and makes for an uncomplicated and easy-to-navigate interface.

Investment options

This is never going to be the most comprehensive selection of investment options, but for new investors who could find a wide breadth of options intimidating, this is plenty.

Funds

Funds are offered in various sectors or as index trackers. This means that you can always access something worth investing in. We are big fans of index trackers here at Investing Insiders and the Vanguard Core US fund tracks the S&P Total Market Index, which has historically been fruitful.

There are 9 extra funds available with the Premium account, although I wouldn’t necessarily think they were worth the additional cost.

Stocks

The most recent addition to the Plum offering is the individual stocks that can now be accessed. Again, it is a limited offering but all trades are commission-free.

The big appeal to the selection of stocks is the fact that you can purchase fractional shares. This allows you to purchase a piece of stock that you may not otherwise be able to afford.

However, be aware of FX fees when buying and selling non-UK stocks. At 0.45%, the FX charge is fairly average (eToro and interactive investor charge 1.5%) but this is still a consideration worth taking.

Money-saving tools

This is where I believe Plum take the lead over all the other money saving apps out there. That’s because as well as offering tools such as round-ups and payday boosts, at Plum they harness the wisdom of algorithms and AI to analyse your income and expenditure in order to transfer small amounts of money from your bank account into your Plum savings account.

I’ve used this service myself for several years and can confirm that it is an effective and painless way to save money. You literally won’t notice the difference (apart from Plum does send you a notification each time it transfers money).

Readymade portfolio performance

Plum isn’t a robo advisor, so it won’t match you with a ready-made portfolio. There are funds on offer, and some of those are a good option, however, none of them are exclusive to Plum.

This means that the funds on offer at Plum were excluded from our initial analysis of ready-made portfolios. However, in order to give you a picture of whether you would have made significant gains at Plum in the past, we have analysed the funds on offer and compared their results to the industry average.

There’s nothing on the web or desktop here, you must download the Plum app and conduct all your transactions as well as manage your accounts from there.

That being said, in 3 years I have not missed having access to my account on the web. In truth, the app requires very little intervention once the initial setup is complete. There will be the odd occasion where you will be asked to re-link your bank account, and if you want to see how your savings and investments are performing you will need to log in, but other than that, this is designed to save you as much time and effort as possible, and in that endeavour, Plum is entirely successful.

The app is well-designed and easy to use. All your Plum accounts are in one place, and it's very straightforward to move money between accounts. You also get a total ‘Plum Value’ which is the sum of all your accounts, providing you with a complete picture of how much money you have managed to save.

The basic account is free at Plum and provides access to a number of features to help you save. I recommend this as a starting point for those without enough money to start investing. Set the algorithm and leave it to do its magic and before long you will be ready to open an investment account. Beyond that, you will have to pay to access the services. Here’s a breakdown of costs

Basic plan – FREE

• Easy Access Savings with 4.00% AER
• Plum Interest with 4.96% VAR
• Cash ISA with 5.17% AER
• Automated deposits based on the algorithm
• Spend tracker
• 1 Extra savings pocket
• Access to stocks within the general investment account

Pro – £2.99 per month

All the above plus…

• Access to stocks and shares ISA
• Access to 16 funds
• 6 additional rules for setting aside money
• Extra savings pockets to work towards goals

Ultra – £4.99 per month

All the above plus…

• The Plum Visa Debit card so you can spend directly from your Plum account

Premium – £9.99 per month

All the above plus…

• Automatic stock investment per day, week, or month
• Price alerts when an asset reaches a target price

SIPP

• Annual management fee of 0.45%

For amounts less than £100,000, this is fairly good value and is in line with the SIPP charges levied at Moneybox. However, Moneybox drop this charge to 0.15% once you go over this amount which means they will then represent better value.

If you don’t mind picking your own funds and are happy to do so from an extensive range of ETFs, then you won’t find better value than InvestEngine.

Research is limited to some blog articles that are mainly aimed at promoting new Plum products and helping beginners understand some of the terminology surrounding investing. There are some simple tools, although on the investing side, price alerts are probably the only useful tool I could find, and even then you will pay handsomely for those.

Of course, where Plum shines is with the tools they provide to help you save. These are numerous (possibly more than I've seen on any other platform) and very effective.

There are also so budgeting tools, including the new spend tracker which helps customers see where the bulk of their money is going.

This is a fairly limited offering by any standards. However, for an app of this nature, there is little need for any comprehensive tools of research.

Plum is authorised and regulated by the Financial Conduct Authority and offers clients protection from the Financial Services Compensation Scheme up to the value of £85,000.

However, most platforms have this as standard. Where Plum stands out is with the financial backing of Wise, Eurobank and DMG Ventures who are all stakeholders in the business.

Account Security

Your account is kept completely secure with passcodes and biometric ID as standard. Plum will automatically lose connection with your main account after a set period of time unless this is re-established in your banking app. This is for additional security.

Customer service is a little clunky at Plum. For me, a five-star service is a Live Chat button that hooks you straight up to a human or a phone number. That simply isn’t happening here.

What you do get is a chatbot asking you multiple questions which you have to navigate past in order to speak to an actual person. Plum claims to respond to messages within a few hours which is usually the case, but there are other platforms that can put you through to a person within minutes so there is definitely room for improvement here.

Plum have designed a really seamless account opening process. Make sure you have your National Insurance Number to hand as that is required for all ISA accounts, but everything else should be information that you can access from the top of your head.

If you have your banking app on the same smartphone as your Plum account, then you should be able to automatically link the two without any need for your banking details.

The entire process can be completed in around 5 minutes.

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