Building up a savings pot and putting away a regular amount each month is something that most Britons find difficult and this is proven by the fact that almost 50% of the UK has savings of less than £1,500. Living standards have been hit in recent years due to weak wage growth and rising prices, making the difficult task of saving money even harder.
There are many ways to start saving and investing, but what is the best way and how can you get started?
What is Plum and how does it work?
Plum* is a savings and investment 'robot' for your phone that analyses your spending and automatically saves your money for you, so you don't have to. Plum decided to make saving money seem less of a chore and easier by allowing us to spend on 'things we want, rather than things we need'. Originally Plum worked using a Facebook messenger chatbot but has since developed into stand-alone iOS and Android apps.
Plum was founded by Victor and Alex, two Cypriots living and working in the UK, who decided to challenge each other to save. This, in turn, resulted in Alex coming up with an algorithm that monitored his spending, putting aside the amount he could afford to save each month. This process allowed him to automate the savings process without having to alter his spending habits.
Plum works by linking to your bank account (it supports all major UK banks) and analyses your spending and transactions to work out the best amount to put away every week. You determine how much you want Plum to save and can ask it to stop saving at any time. To sign up to Plum you need to be a UK resident, aged 18+ and have a UK current bank account.
With Plum not only do you have the opportunity to build up a savings pot, but you can also invest your savings for a small monthly fee.
Plum features
- Automatic deposits using Artificial Intelligence (AI) - Plum uses AI to analyse your spending and set aside an affordable amount each month
- Savings Pockets - in addition to your primary pocket you can open a pocket that pays interest. Money can be withdrawn from the Primary Pocket instantly. Easy Access Interest Pockets (provided by Investec Bank plc) require 1 day's notice
- Option to invest your money - invest in a Plum Stocks and Shares ISA or a General Investment Account where your Capital is at risk
- FSCS protection - your money saved in an Easy Access Pocket is protected by the Financial Services Compensation Scheme
- Roundups - save by rounding up last week's transactions to the nearest £1
- Weekly depositor - set an amount you wish to set aside each month and Plum will automatically deposit this for you
- Invest from £1 - open an investment account with Plum from as little as £1
- Payday saving - choose a set amount to save or invest every time you get paid
- 52-Week Challenge - take part in the 52-week challenge and set money aside every week starting with £1 and increasing by £1 each week (subscription users only)
- Rainy Day feature - Plum will set aside or invest money every time it rains (subscription users only)
- Privacy mode - show your friends how Plum works without sharing your personal account details
- Adjustable moods - change how much you automatically set aside each month with adjustable moods ranging from 'Shy' to 'Beast Mode'
- Bills tracker - When analysing your spending if Plum notices you may be being overcharged for a financial product it will notify you and help you switch
- Link multiple accounts - Plum allows you to link more than one bank or credit card
- Overdraft savings - If you regularly use your overdraft Plum allows you to save whilst you are in your arranged overdraft. This feature has to be turned on as it isn't an automatic feature
- Save for retirement - Plum allows users to save for retirement with its Self Invested Personal Pension (SIPP). You can also consolidate your other pensions in one place, which means your Capital is at risk
- Plum card - spend money fee-free abroad on your visa prepaid debit card and only pay Visa’s daily exchange rate (Ultra and Premium users only)
Plum accounts
Plum offers four plans and they are summarised in the comparison table below:
| Plum Basic | Plum Pro | Plum Ultra | Plum Premium | |
| Cost | FREE | £2.99 per month (30 days free) | £4.99 per month (30 days free) | £9.99 per month (30 days free) |
| Instant Access saving account |  |
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| Easy Access saving account (AER) | 1.50% AER | 1.95% AER | 1.95% AER | 1.95% AER |
| Unlimited free withdrawals |  |
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| Automatic depositing | |
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| Roundups | |
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| Pay Days | |
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| Extra Pockets | 1 | 15 | 15 | 15 |
| Pension (iOS only) | |
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| Investing |  |
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| Assign Pocket Goals |  |
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| 52 Week challenge | |
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| Cashback | |
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| Money Maximiser | |
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| Plum Card | |
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| Repeat investments | |
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| Choice of stocks | |
100 | 100 | 3000+ |
| Expertly managed funds | |
12 | 12 | 21 |
| Annual asset management fee | |
0.45% | 0.45% | 0.15% |
| Priority customer support |  |
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Saving with Plum
Plum* helps you to save by using its algorithm and artificial intelligence to analyse your spending to set money aside automatically. You can decide how much money you deposit with Plum based on the moods shown in the image below as per Plum's website (the standard saving setting for Plum is 'Normal'):
You can change your mood in the app or via the 'Brain' section of the app. Plum will analyse your spending and move its calculated deposit amount to your Plum account every week. If you want to withdraw money from your Plum account you can also do this via the app. If you request to withdraw money from your instant access primary pocket it should be in your bank account within 30 minutes. If you request to withdraw money from an interest pocket before 3pm you are likely to receive it the same day, however, if you request to withdraw money after 3pm you may not receive it until the next working day. All of Plum's accounts allow you to take advantage of its clever automatic algorithm that allows you to deposit money without needing to remember. However, if you wish to set savings goals or take part in the 52-week and Rainy day challenges you will need to upgrade to a Plum Pro, Ultra or Premium account.
Where are my savings kept?
Funds are kept in 'pockets' and you can choose between a 'primary pocket' which provides instant access to your money or an 'easy-access interest pocket' where you'll need to provide 1 day's notice in order to access your savings. Primary pockets do not pay any interest and the money is held as e-money with Plum and so is not protected by the Financial Services Compensation Scheme (FSCS). The Plum Easy-Access pockets are provided by Investec Bank plc and pay up to 1.95% AER interest (depending on the Plum plan you are on). Plum's Easy Access Interest Pockets are protected by the FSCS.
We provide a useful table below which explains which pockets are available, as well as the main features.
| Plum Primary pocket | Plum Easy Access Savings (Basic accounts) | Plum Easy Access Savings (Pro, Ultra and Premium accounts) | |
| Plum account cost (monthly) | Free | Free | £2.99/£4.99/£9.99 |
| Interest paid | 0.00% | 1.50% AER | 1.95% AER |
| Instant Access | |
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| Notice Required* | No notice required | 1 day | 1 day |
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*If requested before 3pm on business days it may be completed the same day
Investing with Plum
You can invest in a Stocks and Shares ISA or a General Investment account with Plum from as little as £1. Set how much you want to invest and Plum will automatically do this for you. With a Plum investment account, you can deposit and withdraw money as little or as often as you would like (withdrawals can take between 5-7 working days). Bear in mind that your capital is at risk when investing.
Plum provides a choice of 12 investment funds that you can invest in with varying levels of risk as shown below. These are provided by a number of third-party investment houses and include the extremely popular Vanguard Lifestrategy fund range. The table below shows the investment type alongside the current 5-year total return. Where the number is green it means that the fund outperformed the average of its peer group. Where it is red it means that it underperformed. A "n/a" means that the fund has not been in existence for five years. The latest performance figures and yearly breakdowns for each fund can be found in the key investor information document on the Plum website. If you have a Plum Premium subscription account - charged at £9.99 a month - you can benefit from 9 additional funds exclusive to Premium accountholders only. More information on these funds can be found on the Plum website.
| Investment type | 5-year return | Risk level | |
| Tech Giants | Technology shares | 96.17% | High |
| Clean & Green | Socially responsible companies | -2.38% | Average |
| Balanced Ethical | Diverse asset mix based on ESG criteria | N/A | Average |
| Growth Ethical | Shares of global companies selected for ESG track record | N/A | Average |
| Rising Stars | New companies in Asia & Africa | 20.74% | Average |
| American Dream | Shares of the 500 largest public companies in the USA | 65.12% | Average |
| Best of British | Shares of the 100 largest public companies in the UK | 19.36% | Average |
| European Essentials | Shares of the large and mid-size companies in Europe | 29.47% | Average |
| Medics | Healthcare, Pharmaceuticals & Biotechnology companies | 65.06% | High |
| Slow & Steady | 20% shares and 80% bonds (Vanguard Lifestrategy) | 2.75% | Low |
| Balanced Bundle | 60% shares and 40% bonds (Vanguard Lifestrategy) | 19.43% | Average |
| Growth Stack | 80% shares and 20% bonds (Vanguard Lifestrategy) | 28.68% | Average |
Remember: You can hold as many stocks and shares ISAs as you like across multiple providers, however, you can only contribute the current tax-year allowance into one stocks and shares ISA with one provider and so make sure you check before you commit to a PlumISA
Plum Self-invested Personal Pension (SIPP)
Plum recently launched a Self-invested Personal Pension (SIPP) to help you to prepare for retirement. The Plum SIPP is provided by Gaudi Regulated Services Ltd and is covered by the Financial Services Compensation Scheme (FSCS). You can choose to consolidate existing pensions into a Plum SIPP or start a new Plum Pension altogether. Whilst Plum lets you save into a pension it does not currently allow you to draw an income - often referred to as pension drawdown - and so you would need to transfer your Plum SIPP to another provider when you want to access your money.
You can contribute to a Plum Pension via regular contributions from your Plum auto-deposits that can be increased or reduced to suit your budget. You can also make one-off contributions to the Plum pension from your connected bank account or your Plum Balance.
When investing in the Plum SIPP you can choose from three investment fund types:
- Target Retirement Date Fund - this fund changes what it invests as you approach retirement age starting with higher-risk investments and changing to lower-risk investments as you near your retirement date. The funds are provided by Vanguard.
- Global Equity - this fund invests in a range of worldwide company shares and is provided by Legal & General.
- Future Planet - according to Plum this fund invests in 'shares of companies that meet positive environmental, social and governance criteria' and it is provided by Legal & General.
Should I invest with Plum?
It is important to remember that any type of investing comes with a certain level of risk meaning it is possible to get back less than you put in.
If you invest in tech and growth funds with Plum your money is held in an investment account with Saveable LTD, which is FCA regulated and your money is FSCS protected. If you invest in other funds with Plum you also have FSCS protection.
Plum Card
Ultra and Premium Plum subscribers can order a free Plum card which can be loaded from your primary pocket or linked bank account. Plum Ulta and Premium subscribers can use the Plum card anywhere that Visa is accepted benefitting from fee-free spending while abroad, with customers only paying Visa’s daily exchange rate. The Plum card can take up to 10 working days to arrive and is dispatched by Royal Mail.
If you are looking at other prepaid debit cards or ways to spend money abroad fee-free check out our article, 'The best app-only bank in the UK'.
How much does Plum cost?
The cost of Plum varies depending on the account you choose. The most basic version of Plum is free and allows you to take advantage of the AI deposit features. However, if you want to benefit from more budgeting features or you would like to invest you will need to upgrade to either Plum Pro, Ultra or Premium at £2.99, £4.99 or £9.99 a month.
How much does it cost to invest with Plum?
If you choose to invest with Plum you will need to pay a minimum of £2.99 for the Plum Pro account. There is also an annual fund management and product provider fee which is on average 0.48%. This consists of a product provider fee of 0.15% and a fund management fee that ranges between 0.06%-0.90%.
Plum SIPP fees
The fee for a Plum SIPP is 0.45% a year which is broken down into a 0.35% administration charge and a 0.10% custody service charge. The fee is payable at the end of the month and is deducted from your Plum SIPP balance. In addition, a fund management fee is charged, ranging from 0.21% - 0.30%, depending on the fund you choose to invest in.
Is Plum safe to use?
Plum is authorised and regulated by the Financial Conduct Authority to carry out payment services activities as a Registered Account Information Service Provider, under the Payment Services Regulations 2017.
If you choose to hold your money in an instant-access primary pocket then it is held as e-money. Plum uses an e-money provider that maintains a specific UK bank account and so it says your money is protected by the E-Money Safeguarding Rules. It is important to note that money held in an instant-access primary pocket or on a Plum Card is not protected by the Financial Services Compensation Scheme (FSCS).
However, if you choose to hold your money in an easy-access interest pocket or with an investment account, then your money is protected by the Financial Services Compensation Scheme (FSCS).
Plum reviews
Plum is rated as 'Excellent' on Trustpilot scoring 4.4 out of 5.0 stars from over 3,900 reviews. 78% of users rate it as 'Excellent', with most commenting on how great it is at helping them to save money and great customer service. 10% of users rated it as 'Bad' with some users complaining about how long it takes for their money to transfer back into their account.
Alternatives to Plum
Plum vs App-only banks
Monzo and Starling Bank are app-only banks that can help you to save with round-up spending. When you spend with Monzo and Starling you can opt to round up your change, putting it into a savings pot. By setting up automatic saving you save every time you spend and while it may not seem like much, it quickly adds up. Chase Bank is another app-only bank that offers round up savings and you can also benefit from 5% interest on your round-ups.
For more information read our Monzo, Starling and Chase Bank reviews.
Plum vs Chip
Chip allows you to save automatically by using open banking to analyse your spending habits. Chip works in a similar way to Plum in that it saves your money for you and moves it into your Chip account. You can also choose to invest with a ChipX account but this comes with a £5.99 fee every 28 days.
Like Monzo and Starling Bank you can set savings goals and track your progress to achieving those goals. Chip is FCA regulated and your savings are stored with partner banks and are therefore FSCS protected.
For more information on Chip, read our Chip review.
Plum vs Moneybox
Moneybox is another savings app that allows you to invest the money you put away. Moneybox helps you to save by rounding up your spare change and you can invest the money you save into a variety of savings products such as a Stocks and Shares ISA, Stocks and Shares Lifetime ISA, Pension, Junior ISA, General Investment Account, Socially Responsible Account, Cash Lifetime ISA, Simple saver or 32, 45, 95 or 120-day notice account.
For more information on Moneybox, read our Moneybox review.
How does Moneybox compare to Plum?
In the following comparison tables, we compare Plum and Moneybox saving and investment accounts.
Plum investments vs Moneybox investments
| Plum | Moneybox | |
| Minimum investment | £1 | £1 |
| Monthly fee | £2.99 | £1 |
| Platform fee | 0.15% | 0.45% |
| Fund provider fees | 0.06% - 0.90% | 0.12% - 0.58% |
| Investment types | Stocks and Shares ISA, General Investment Account, SIPP | Stocks & Shares ISA, Stocks & Shares LISA, Pension, Junior ISA, General Investment Account |
| FSCS protection |  |
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| FCA registered | |
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Plum savings vs Moneybox savings
| Plum Easy Access Savings (Basic) | Plum Easy Access Savings (Plus/Pro/Ultra) | Moneybox Simple Saver | Moneybox 32 day Notice account | Moneybox 45 day Notice account | Moneybox 95 day Notice account | Moneybox 120 day Notice account | |
| Cost | Free | £2.99/£4.99/£9.99 | Free | Free | Free | Free | Free |
| Notice required | 1 day | 1 day | 1 day | 32 days | 45 days | 95 days | 120 days |
| Interest paid | 1.50% AER | 1.95% AER | 2.00% | 2.22% | 2.68% | 2.32% | 2.94% |
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Pros and cons of Plum
Pros of Plum
- Automatic deposits
- Invest from £1
- Easy to set up
- Can adjust to save more or less money
- FCA regulated
Cons of Plum
- Money in a primary pocket isn't protected by the Financial Services Compensation Scheme (FSCS)
- Investing charges are expensive if only investing small amounts
- Have to pay to get some features that other apps offer for free
Summary
Overall, Plum is a useful tool for those who have trouble saving and I like the feature that allows you to change how much you want to deposit each month by selecting your mood. Plum is regulated by the FCA and any money held in savings (i.e not in your primary pocket) or investments funds are covered by the FSCS. If you want to compare it to other personal finance apps you can do so in our article, The best money apps you should have in 2022.
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