Do you find it a struggle to put money away every month? What if there was a way to save money automatically in such small amounts that you would hardly notice? Take a look at this Plum app review to see if it really is worthwhile and the added benefits to consider.
Let’s be honest, for the majority of us, saving money can be tough. We often start with good intentions, but by the end of the month, your account is hovering around the 0 mark. You think that you’ll give it a try the following month only for the same thing to happen.
It’s quite scary when you think that over 25% of UK adults have no savings at all. What do you do if you have an unexpected bill? Or the worst case scenario… how long could you stay in your house if you were to lose your job?
This is why it’s so important to have some money saved away. Retirement may be 30 or 40 years away, but you never know what’s around the corner.
Start saving
Don’t think that you suddenly have to put £100’s into an account straight away and give-up eating for several months. One great trick to start your saving is by doing it in small amounts.
A couple of pounds here and there every week is something you will probably not notice. And within a couple of months, you’ll soon have a nice little sum growing. This is what Plum is all about.
What is Plum?
Plum is run by a Plum Fintech Limited and is based in London and has been operating since 2016.
Taken from their website:
Our mission is to help people save money without even lifting a finger.
We’ve always hated saving money, but we wanted to change that. We decided to make Plum so that there would be an easier way to save money to spend on things we want, rather than the things we need.
How does the app work?
Plum is a free app for both Apple and Android users. All you need to do to get started is to visit the Plum website and download. From there you will need to fill out some personal details and then connect your bank account and you’re ready to start saving.
Plum analyses the money going in and out of your account to determine how much you can afford to save. And don’t worry, it guarantees that you will never go into your overdraft when money is transferred from your current account to Plum. However, if that did happen, they promise to refund any fees.
With a click of a button (or a push of a finger) you can tell Plum whether you want to increase or decrease the amount you’re willing to save.
Plum also provides some handy insights about your current account. You can get summaries for how much you have spent over the last week, month or by category.
Another option to help you save is by turning on Round-ups. With this option activated, it means that every time you make a purchase from your current account, the app will round this amount up to the nearest pound which is then transferred to your Plum account.
For example, spend £2.40 on a coffee and 60 pence will be sent to Plum.
In just under 1 year, having Plum linked to my current account helped me put away over £1000. Something that I could never have done without it!
How much does it cost?
Using the basic savings functions with Plum is absolutely free.
But there are 2 chargeable features – Plum Pro and investing. More on these below.
Is the Plum app safe?
Taken from Plum’s FAQ’s
When you deposit money in a bank, the bank will usually lend out (part of) your deposits. This is how a bank makes most of its money! What this means is that your money is effectively “at risk” if the bank goes bankrupt, hence there is a need for deposit insurance, commonly known as FSCS, for up to £85,000.
Your Plum savings are deposited in a secure account, and held as e-Money by PayrNet (a subsidiary of Railsbank), our e-Money provider. Your money is safeguarded because e-money cannot be lent out (this is also why it doesn’t earn interest), and stored in a ring-fenced account for you with the Bank of England.
That same safeguarding also prevents any of Plum’s or PayrNet’s creditors from claiming your money in the event that either business should go bankrupt.
Both Plum and PayrNet are regulated by the Financial Conduct Authority (the UK’s financial watchdog) to make sure of this.
In a nutshell, the money is equally safe with Plum vs your bank
Which banks does Plum work with?
Unfortunately, Plum won’t work with every bank, but most of the big players are available. However, this is for personal bank accounts only and doesn’t cover joint accounts and business accounts.
Supported accounts are:
- NatWest
- RBS
- Santander
- HSBC
- M&S
- Lloyds
- Barclays
- First Direct
- Halifax
- Nationwide
- TSB
- Bank of Scotland
- Ulster Bank
- Post Office Bank
- Monzo
- Starling
- Danske Bank
What interest rate do you get on your savings?
0%. That’s right nothing. If you want to start earning some returns, you will need to start investing with Plum. Investing is purely optional though. Some people prefer just to save for short stints and aren’t particularly concerned with earning interest.
But if you want your money to work a little harder for you, Plum offers you the chance to invest in stocks and bonds. There are several funds in which you can invest, all offering different rates of return in the region of 5-23%. This is pretty impressive when you think of the interest you would get if you placed the money into a cash ISA.
Plum doesn’t invest the money themselves but uses Vanguard investment funds which are an investment manager with more than $5.1 trillion worth of funds.
However, as with any kind of investment of this type, these returns aren’t guaranteed and there is a chance you could lose your investment. Generally, the bigger the return, the higher the risk.
Is it worth investing with Plum?
I am not a Financial Advisor, so I can’t give you any advice. However, I have invested and seen better returns than I would from an ISA. My dad always told me not to invest more than I can afford to lose, so this is the mentality I have adopted with Plum.
I have managed to save over £1000 without noticing the money missing from my current account and made £438.13.
In % terms, that’s just over 33% return on my investment. But don’t expect returns to always be quite so good.
There are a couple of negatives you need to be aware of though.
The drawback to investing with Plum is that it’s not free. There is a charge of £1 per month for investing, a 0.15% fee on the value of your fund investments and a fund-specific management charge of up to 0.9%.
You see, Plum pass on the fees to you that Vanguard charge for managing your money, plus they add their own. You will get better value for your money if you invested directly with Vanguard.
Because of the money Plum charges, you don’t want to just put £10 in and leave it, as the fees will always outweigh the possible gains. Because of this, you need to make sure you’re investing a decent amount each month.
The investing process is a little slow too. It usually takes around 4-5 days for your money to leave your current account and reach Plum. And if you decide to invest, it usually takes another 4 days for the money to leave Plum savings and enter your investment account.
Plum has promised to speed this process up, so fingers crossed they won’t take too long.
Other problems with the app
There is another issue I have found with Plum. The link between your bank account and the app can be temperamental. TSB and Barclays seem to provide the biggest problems, but recently my Santander account lost all contact.
I would like to blame the banks, but I have never had problems with other apps such as Chip and Tandem. However, over the last 12 months, my connections have become quite stable.
What is Plum Pro?
If you fancy getting a bit more from the app, you can try out Pro.
Plum Pro offers several more benefits over the free version:
True Balance – Giving you spending limits so you don’t overspend before pay day.
Rewards – Earn cashback when you shop at your favourite retailers.
Goals – Set yourself a target amount.
Diagnostic reports – allows you to compare yourself with other Plum users in a similar position.
Pockets – Separates money into different savings pots
Exclusive deposit rules – Allows you to create different saving rules.
How much does Pro cost?
Currently, Plum Pro membership (July 2020) costs £2.99 per month. However, you can trial Pro for 30 days for free.
Is Plum Pro worth it?
If you want to keep a much closer eye on your finances, then Pro could be a good option for you. However, I’m not really sure the £2.99 is really worth it. The cashback isn’t a great feature either as you can find the deals elsewhere and for free.
What other people say
Plum has over 8000 reviews on Trustpilot and scores 4.3 stars out of 5 and is rated as ‘excellent’. Some of the positive reviewers state:
Saving without even noticing
Brilliant app for saving money
A real gamachanger in saving
Whereas, some of the negative reviewers say:
Longest reply time’s ever!!!!!
Very poor service, not transparent
Inefficient process/functionality behind fancy App
My Plum app review conclusion
Plum really is an excellent method to use if you struggle to save and very easy to use. Yes, you can get better value investments elsewhere, but this is a great way for novice investors to get started… even though you can find better value elsewhere.
And it’s certainly worth signing up for, even if you don’t want to invest.
There’s even an active Facebook page for investors and savers to discuss all things Plum. And if you manage to refer 3 friends to sign-up to Plum and you can earn yourself £15.
Click the sign-up button below to find out more. It’s free to join, so you have nothing to lose!
If my Plum review hasn’t convinced you, why not take a look at the best personal finance and savings apps.
Please note that this post contains an affiliate link to Plum. All views are my own.
Not one I’d come across before so thanks for this – will take a gander!