MTTM Podcast Episode 431 – How to start investing, pricing strategies to watch out for and the MTTM pension quiz

8 min Read Published: 17 Sep 2023

Episode 431 - On this week's show we discuss the various options if you want to start investing, including Monzo's new investment service. I then discuss drip pricing, how much it impacts consumers and how to avoid it. I also explain other pricing strategies to watch out for. Finally, as it's Pension Awareness Week, take part in our pension quiz and see how many you can get right.

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Abridged transcript

How to start investing

UK digital bank Monzo has recently launched ‘Monzo investments’ allowing its 8 million customers access to investing at the touch of button. This means that more people than ever before will be able to gain easy access to investing from their mobile and so we have provided a summary of the alternatives that are worth considering.

Let’s start with Monzo:

Monzo Investments - Good for convenience, Invest straight from your banking app

  • Stocks and Shares ISA and General Investment account
  • 3 ready-made portfolios
  • Cost is 0.45% platform charge fee per year, plus 0.14% fund fee for Monzo free customers. Monzo Plus and Premium customers pay a lower platform fee of 0.35% per year, plus the same fund fee of 0.14%
  • Minimum investment £1

Below we provide a summary of some of the alternatives to Monzo, including what we think they are good at.

InvestEngine - Good for investing in ETFs (Invest in ETFs for free)

  • Stocks and Shares ISA and General Investment account
  • 10 managed growth portfolios. Autoinvest via a ‘Savings plan’ weekly, fortnightly or monthly.
  • Cost is 0.25% platform charge per year for its managed portfolios plus average ETF charges of 0.15% - 0.25% per year (Average 0.16%)
  • Minimum investment is £100 to open an account or £10 per week for its regular savings plan

Dodl - Cheapest for ready-made ‘managed’ portfolios

  • Stocks and Shares ISA, Lifetime ISA, Pension and General Investment account
  • 7 ready-made portfolios and a range of 23 themed funds. Also offers a small selection of around 80 UK and US shares.
  • 0.15% per year, per account. Minimum charge of £1 per month per account.
  • Minimum investment £100 or set up a direct debit for £25 per month

Moneybox - Best product range and good for round-ups

  • Stocks and Shares ISA, Lifetime ISA, Junior ISA (Existing customers only), Pension and General Investment account
  • If investing in an ISA, you’ll first choose one of its 3 ready-made portfolios but you can then customise your allocation if you wish by choosing a limited number of ETFs and US shares. If investing in a pension, there is a choice of four pension funds.  
  • 0.45% annual platform fee with fund costs ranging from 0.12% to 0.58%. Moneybox charges a £1 per month subscription fee for all accounts except for its pension.
  • Minimum investment £1 for one-off deposits or £2 per week for recurring weekly subscriptions

Plum - Good for automation - Combines AI spending analysis and investing

  • Stocks and Shares ISA, Pension and General Investment account
  • Offers 22 ‘themed’ funds of varying risk levels as well as access up to 3,000 individual shares, depending on the type of account you hold.
  • Choose between 3 subscription plans. £2.99 per month, £4.99 or £9.99 per month. The more you pay the more access you get.
  • Minimum investment £1 

Wombat - Good for share trading

  • Stocks and Shares ISA, Junior ISA and General Investment account
  • Offers 30+ ‘themed’ funds of varying risk levels plus access to around 40 shares
  • Free to invest in shares via general investment account, however there are FX fees of 0.65%. £1 per month subscription if you want to access its ISA and themed funds. plus annual fee of 0.10% and annual fund fees of between 0.07% and 0.75%
  • Minimum investment £10 

Chip - Good for saving and investing in the same place

  • Stocks and Shares ISA and General Investment account
  • Choice of up to 7 themed funds of varying risk levels 
  • 0.50% annual charge for Chip Basic account (£1 minimum charge) or £5.99 subscription charge (charged every 4 weeks) for Chipx
  • Minimum investment £1 

What are the alternatives to investing via an app?

The apps we’ve mentioned above are a good way to get started with regular investing. Once you are happy with the process, you may want to move over to something like a robo-adviser or a more traditional online investment platform. 

A robo-adviser can be an easy way to create a low-cost, diversified investment portfolio. Investors will usually need to answer to a series of questions that helps ascertain someone’s attitude to risk and capacity for less. They will then be with with investment options that best suit their investment goals. Most will offer fixed-allocation investments which have little or no human intervention as well as managed portfolios where the funds and asset allocations will be adjusted to ensure they continue to match the risk/return profile. Top robo-advisers include Wealthify, Nutmeg and Moneyfarm.

Next we have online investment platforms and the most popular ones include Hargreaves Lansdown, Interactive Investor, Fidelity and AJ Bell. A platform goes further than a robo-adviser, offering a larger product range as well as additional tools, research and even regulated advice.

Advances in technology in recent years means it is easier to get into investing than ever before. It is good news for consumers as a number of well-established investment platforms have made product improvements and cut costs, in order to stay competitive. Both Interactive Investor and Hargreaves Lansdown have scrapped fees in recent years where investors were being charged for regularly investing with them. 

Larger platforms such as Interactive Investor, Fidelity and Hargreaves have also removed charges for holding investments in Junior ISAs, giving investors more reasons to consider them as their wealth increases.

When to move from investing app to robo or investment platform?

This is tricky to answer as there are a number of things to consider. How big is your portfolio? How involved do you wish to be? What types of products do you want access to? How much will you be able to invest going forward? 

Product choice and cost are likely to be key factors in your decision-making so moving over to a Robo Adviser or investment platform could make sense if and when the time is right. Platform fees for both robo advisers and investment platforms are often tiered, meaning you pay less as you invest more. The exceptions are Vanguard which charges a platform fee of 0.15%, capped at £375 per year and Interactive Investor, which charges a monthly subscription fee. Before you get too excited about Vanguard, bear in mind that choice is limited, as it only offers its own range of funds. 

Interactive Investor is an interesting proposition as its base plan costs just £4.99 per month and it allows you to hold up to £50,000 in your portfolio before needing to upgrade to the next plan at £11.99 per month. 

If you are an active investor then you may want to think carefully before moving over to a platform. Most online platforms allow you to switch funds for free, the exception being AJ Bell which charges £1.50 per switch, however, most will charge a fee for buying and selling shares. Interactive Investor is one of the cheapest platforms for trading, recently reducing its fees to £3.99 per trade and others tend to charge somewhere between £5 and £12.

Experienced investors who prefer to actively trade may be better off moving over to a specialist trading app, such as Freetrade, eToro or Trading 212 as they do not charge a fee for trades. Be aware that there may be other charges to consider, for example, Freetrade charges a fee to access a Stocks and Shares ISA and eToro charges currency conversion and withdrawal fees.

Ultimately, we think once you’ve been able to build a portfolio of around £10,000, it is a good time to consider your options. There may be a cheaper way to invest or there may be an alternative that offers a better user experience or provides more choice. 

Pricing strategies to watch out for

Drip Pricing

  • Where the additional charges are added during purchase on top of the advertised price.
  • A popular pricing tactic with airlines where they add fees for luggage, seat selection, etc.
  • Drip pricing makes price comparison difficult.
  • Drip pricing works because of human nature of anchoring to the initial low price.
  • Strategy to Counter: Be aware and compare final prices, not initial prices.

Value-based Pricing

  • Pricing based on perceived consumer value rather than the actual cost.
  • Example: Apple iPhones priced high due to their perceived value.

Competitive Pricing

  • Where prices are based on competitor's prices.
  • Example: Supermarkets like Tesco and Sainsbury's offering deals on certain items.

Price Skimming

  • Where a product launches at high price but reduces over time.
  • Example: Gaming consoles.

Penetration Pricing

  • Initial prices are low to gain market share.
  • Example: Ryanair's low initial prices were used to attract customers.

Economy Pricing

  • Offer lower prices on generic and private label goods.
  • Example: Supermarkets like Lidl and Aldi offering basics at cheaper rates to attract customers.

Dynamic Pricing

  • Prices fluctuate based on demand, seasonality, and other factors.
  • Examples: Hotel bookings adjusting prices. Uber's surge pricing.
    Strategy to Counter: For online browsing, use incognito mode to avoid price increases due to repeated viewings.

General Tip: Be aware of all of the above pricing methods when shopping and make informed decisions based on the final price rather than the initial or advertised price.

MTTM Pension quiz

On this week's show we carried out a Pension quiz in aid of Pensions Awareness Week. See if how well you do.


  1. What is the current state pension age for both men and women in the UK?
    • A) 65
    • B) 66
    • C) 67
    • D) 68
  2. True or false: The state pension amount you receive is based solely on the number of years you have paid National Insurance contributions.
  3. What is the maximum amount you can pay into a defined contribution pension in a given tax year?
    • A) £20,000
    • B) £40,000
    • C) £60,000
    • D) There is no limit at all.
  4. It is also possible for more than your annual allowance to be saved into your pensions while still benefiting from tax relief by using unused annual allowances from up to how many previous tax years?
    • A) One
    • B) Two
    • C) Three
    • D) Four
  5. If you have a defined contribution pension, what is the normal minimum pension age?
    • A) 55
    • B) 57
    • C) 60
    • D) 65
  6. Which of these is not part of the triple lock?
    • A) Inflation as measured by the consumer prices index in the September of the previous year
    • B) Inflation as measured by the retail price index in September of the previous year
    • C) Average earnings growth
    • D) 2.5%
  7. Which of the following is not a tax advantage of saving into a pension in the UK?
    • A) Tax relief on contributions
    • B) Tax-free growth within the pension fund
    • C) Tax-free income in retirement
    • D) Tax-free income within the pension fund
  8. How is the state pension funded in the UK?
    • A) From general taxation
    • B) From National Insurance contributions
    • C) From individual contributions to the state pension fund
    • D) From lottery revenue
  9. What is the minimum contribution percentage that is the combined employee and employer contributions under the auto-enrollment scheme in the UK for the tax year 2023-2024?
    • A) 2%
    • B) 5%
    • C) 8%
    • D) 10%
  10. What is the employer's minimum contribution percentage?
    • A) 3%
    • B) 4%
    • C) 5%
  11. True or false: You can continue to work while receiving the state pension without any impact on your pension amount.
  12. True or false: If you continue to work after state pension age, you will still pay National Insurance contributions.
  13. How does the money purchase annual allowance affect your pension contributions if you've already started drawing money from your pension pot?
    • A) It allows you unlimited contributions without any tax consequences
    • B) It reduces the annual contribution limit
    • C) It increases the tax relief on contributions
    • D) It allows penalty-free withdrawals


  1. B) 66, C) 67, D) 68 are all correct as it depends on birthdate
  2. True
  3. D) There is no limit at all. (the £60,000 limit refers to the amount you can contribute and receive tax-relief on those contributions)
  4. C) Three
  5. A) 55 and B) 57 (It is currently 55 but is set to change to 57 on the sixth of April 2028)
  6. B) Inflation as measured by the retail price index in September of the previous year
  7. C) Tax-free income in retirement
  8. B) From National Insurance contributions
  9. C) 8%
  10. A) 3%
  11. True
  12. False
  13. B) It reduces the annual contribution limit