Most of us know the importance of putting our money to work – it’s getting started that’s the problem.
After all, the world of saving and investment can seem complicated and confusing to newcomers, not least due to the blizzard of jargon and sales speak…
If this all sounds familiar, it could be time to try a smart money app that’s making money management more accessible than ever before.
Plum (available on App Store and Google Play) has already got over 2 million people onboarded thanks to its clever automated saving and investing features.
The simple-to-use app sets aside just enough cash every week so you don’t notice, before saving or investing it in a way that works for you. As with all investing, please remember that your capital is at risk and you may get back less than you put in.
Plum’s approach to simplifying money management was what caught the attention of Lily Devins, a 25-year-old graphic designer and illustrator from London.
She’s now saved around £7000 with Plum since 2021. As well as investing in the stock market for the first time, she’s also opened a Cash ISA – which lets you save up to £20,000 every year without paying tax on your interest.
Tax treatment depends on your individual circumstances and may change in the future. Always do your own research.
Also keep in mind, as with all investing, your capital is at risk, meaning the value of your investments can go down as well as up.
Lily Devins is a 25-year-old graphic designer and illustrator from London
Plum links to your bank account and uses the power of algorithms to analyse your income and outgoings, calculating how much you can afford to set aside
‘I received a sum of money after my dad died and knew I wanted to do something with it rather than put it in a bank account earning hardly any interest or spend it on something useless,’ she says.
‘And while I was interested in investing, I found the financial jargon really inaccessible and felt I had to know what it all meant before I got started. I did some research and Plum looked user friendly, so I decided to give it a go!’
The app links to your bank account and uses the power of algorithms to analyse your income and outgoings, calculating how much you can afford to set aside.
It then uses this information to make regular automatic transfers from your bank account into your various Plum ‘pockets’ – based on a breakdown chosen by you using the ‘Splitter’ tool.
Crucially, the Plum app aims to help you manage your money effectively and you can decide to increase or decrease the size of your transfers at any time.
The aim is to target money that might end up ‘leftover’ in your bank account – increasing the temptation to spend it on things you don’t necessarily need.
Plum has nine automatic savings rules that aim to help you stash more money away on a consistent basis
While automation can be a good solution to save consistently, note that some of Plum automatic savings rules are available behind paid plans, and you should always monitor periodically if automation is suitable for you.
For Lily, automating the process of saving has been a revelation.
‘Especially living in London, you often look at your bank account and wonder what you’ve spent your money on that week,’ she says.
‘But then I forget I’ve automatically saved lots of money I might have otherwise just spent on food or coffee. Most of the time you don’t even notice it’s being saved!’
With Plum, you have the option of putting your money into a variety of different pockets, including a Cash ISA earning a competitive 5.01% AER (variable) – which includes a bonus rate of 1.22% if kept for 12 consecutive months*.
Note this rate is only for a new Plum Cash ISA account. A variable rate of 3.79% AER applies if you transfer-in from another Cash ISA.
For maximum flexibility, you can choose an Easy Access Interest Pocket**, which allows you to withdraw your money on the same working day (up to 3 pm).
Lily splits her transfers three ways, with 35% going into an Interest Pocket, 20% into a Cash ISA and the remaining 45% into a selection of Plum’s professionally managed investment funds.
She’s chosen ‘Global Tech’, ‘Core US’, ‘Core Europe’ and ‘Growth Stack’, which is made up of approximately 80% shares and 20% bonds. (Not financial advice).
Keep in mind, The value of investments can go down as well as up and you may get back less than you invest. Past performance is not a reliable indicator of future results.
‘Plum is good at helping you understand what is in your funds and where your money is going,’ Lily says.
‘They include all the terminology but break it down and explain it for you, and thanks to the easy to use interface it’s simple to change things when you want to.’
Plum has nine automatic savings rules that aim to help you stash more money away on a consistent basis, which Lily praises for making saving and investing more interesting and accessible.
‘I’ve chosen Payday, which sends an allotted amount that goes out each time I get paid,’ she says.
Lily praises the clever features for making saving and investing more interesting and accessible
‘I’m also doing the 52-week challenge, which saves £1 in the first week of the year before increasing this by £1 each time until you get to £1,378 by the end.’
Plum lets you create different pockets for each of your savings goals – like buying a car or a house – so you can use its clever features to help reach them faster.
If you’ve hit one of your targets, or simply want a bit of extra cash to spend, you can typically request to withdraw your money at any time.
‘My short term savings goal is very travel oriented,’ says Lily. ‘I’ve done a lot of travelling this year and have got a really big trip next year to Central and South America that I’ve been saving for over a few years now.
‘In the longer term I’d like to own a property, and I also save for a rainy day fund. It’s nice to know I’m now putting my money into places where it should benefit me in the long run.’
Given the success she’s already had with Plum, it’s no surprise Lily has been recommending it to friends.
Plum offers more than 25 professionally managed investment funds
‘It’s so hard to save money at the moment, and I have a lot of friends who have good jobs but are still living paycheck to paycheck,’ she says.
‘I’ve recommended the app to them because you don’t really notice the money going out of your bank account until you check.
‘It’s one of those things that can feel a bit scary to start with, but the longer you’re on it the more benefit you’ll receive!’
Download Plum NOW (available on the App Store and Google Play).
*Includes a bonus rate of 1.22% if kept for 12 consecutive months. To secure the bonus rate, savers must make no more than three withdrawals in a year.
Tax treatment depends on your individual circumstances and may change in the future. Always do your own research.
**Easy Access Interest Pockets are provided by Investec Bank Plc. Money held in an Easy Access Interest Pocket is protected up to £85,000 by the Financial Services Compensation Scheme (FSCS).
