Plum is a Fintech start up that links to your bank account and uses complex algorithms powered by artificial intelligence to calculate exactly how much you can afford to save, without you even realising it. It’s aimed at people who historically struggle to save and comes with some handy little features that you can use to increase your savings pot.
I’ve had my own account with Plum and tested the app for the last eight months at the time of writing this Plum app review, and can confirm that it works very well as a saving tool. The app calculates what it thinks you can afford and transfers that money across without any intervention from you. However, Plum isn’t the only savings app on the market, and it also has an investment account which I have investigated further in this Plum app review so you can decide for yourself whether this is the saving and investment app to suit your needs.
Plum was launched in 2016 and is authorised and regulated by the Financial Conduct Authority as well as offering protection from the Financial Services Compensation Scheme (FSCS).
Who is Plum?
Plum is a savings and investment app that allows users to manage their lifetime money from their phone at the click of a button. There are several accounts on offer, with associated costs to the user, however their basic account is completely free of charge and an effective saving tool.
Who owns Plum?
Plum was co-founded by early TransferWise (now Wise) employee Victor Trokoudes and Alex Michael. Victor Trokoudes still acts as CEO to the company and is continually developing the app.
Product Range Overview
Plum has three main accounts, as well as an ISA and a SIPP all offering varying degrees of functionality to help you save money.
If you are simply looking to put some money aside, then the basic account offers two main pockets:
- Instant Access
- Easy Access
Plum Instant Access
The instant access savings account is effective, intuitive and best of all, free! The wizardry of artificial intelligence is harnessed to analyse how you currently spend your money, in order to ascertain a suitable amount to save every few days, an amount which you won’t even miss in your day to day life. You can control the rate of saving money by selecting your ‘mood’ and withdraw your money back into your bank account within 24 hours.
The instant access account is provided by Investec Bank where your money is held in a segregated account. This account is great if you are saving money for a one off item, or saving for the short term (you could easily take some of the financial stress out of Christmas this way), however, the main drawback with this account is that if offers nothing in the way of interest, and is therefore not a great place to store your savings for any substantial length of time. It does give you instant access to your money so is a handy account if you think you may need to access your savings within 5 minutes. If you are looking to save for the long term, you may want to consider changing to the Plum Easy Access Pocket.
Plum Easy Access
This is a new feature of the Basic Account and pays interest of 0.25% AER without any account fees. You will have to wait for 1 working day in order to withdraw, however, all the great features of the Instant Access account are available and your money is covered by the Financial Services Compensation Scheme (FSCS).
Another handy feature of the Instant Access and Easy Access accounts is that Plum will automatically suggest ways to save on your household bills. Whilst this is essentially little more than a comparison site, they can take some of the leg work out of the process and automatically switch you across as well as ensure you remain with a cost effective provider.
There is also the option to take advantage of the rounding up feature, where Plum will round up all your purchases to the nearest £1 and tuck this amount away in your Plum saving account. Whilst this is a great way to save money, it’s not exactly ground-breaking and has been offered by many high street banks for a good few years now.
For longer term savers the Plum Plus account gives you the opportunity to invest money for the small fee of £1 a month. All the features of the Plum Basic account are still available, however you also have easy access to Plum’s 12 investment funds that include a mix of thousands of companies and assets, in a risk assessed portfolio. Plum Plus works in a similar way to a general investment account, however, most general investment accounts won’t have access to the neat savings features.
Plum actually outsources the management of your funds to Vanguard which is a well respected investment platform, however, you would pay slightly lower fees if you were to invest with Vanguard directly (of course you would then be missing out on the saving functionality that you have easy access to at Plum). Fund management fees at Plum are currently 0.15% of your portfolio and fund fees are 0.08% – 0.90%. However, this still comes out cheaper than some of Plums closest competition, including Moneybox who charge fund fees of 0.12% – 0.30%.
Plum Plus account holders can also take advantage of the ‘Splitter’ function, which allows you to split your savings, leaving a predetermined portion in your savings account whilst investing your remaining funds.
The Plum Plus account also provides an easy access which allows you to separate funds that are going towards a certain goal and where you can earn interest at an interest rate of 0.40% AER.
Plum Pro has all the advantages of the Plum Plus account, plus some handy little features to really help you make the most of your savings. Plum Pro will set users back £2.99, however, it does include the £1 you would have spent on the Plum Plus account for investing your savings. Some of the features of this account include:
- Pockets – As with the Plum Plus account, however, with Plum Pro you have access to multiple easy access interest pockets for multiple savings goals.
- Goals – Set predetermined goals for each of your interest pockets.
- Gamify your saving – Plum has a 52 week saving challenge that has received great reviews from users.
- Rainy day savings – save more money into your account every time it rains in your local area.
- Cash back – Earn cashback when you shop at one of their partner retailers.
- Diagnostic Report – Plum analyses your spending to help you identify areas with further potential for saving.
- True Balance – true balance provides information on the exact amount you have available to spend taking into account any regular payments that are due to come out.
This account has everything you would find in the Plum Plus account but with the added benefit of a management tool called Money Maximiser. The money maximiser is designed to maximise on the amount of interest you earn on your cash by moving your cash automatically between your bank account and your Plum Easy Access account so you can both earn interest on the cash, but always have enough in your bank to pay your bills.
This system can effectively help Plum users budget by tracking their spending in real time. The amount of money you have to spend before you next payday is calculated, minus your regular outgoings, and then allocated on a weekly basis.
The tool suggests a daily limit on spending which is automatically recalculated when you overspend. If you are the sort of person who struggles at the end of each month, this little tool could be a game changer. It will set you back £4.99 a month however, which seems pretty steep, especially for people who are budgeting!
Plum offers a stocks and shares ISA where account holders can take advantage of the investment portfolios on offer, with the added benefit of tax breaks. As with all the investments on offer at Plum, Plum isn’t investing the money for you, but outsourcing your funds to a fund provider.
Also consider: Will ISA rates go up in 2022?
Plum SIPP Review
This is the most recent offering from Plum however at this early stage, Plum are still asking interested parties to register their interest while they roll out the Self Invested Personal Pension. This works in much the same way, you can transfer your savings from your other pockets into your SIPP and invest the money in any of Plum’s 3 SIPP portfolios which include the following:
- Target Retirement Date Fund
- Global Growth
- Future Planet
Is it cost effective?
Whilst you will have to pay a product provider fee of 0.45% each year and a fund management fee of an average 0.25%, the Plum SIPP is free of any subscription charges.
Below is some of the key data that might be useful when deciding whether Plum would have a portfolio to suit your investment needs.&
|Name of Fund||Risk Level||Avg. Annual Return||Fund Management Fee||Fund Provider|
|Balanced Ethical Fund||5/7||NA||0.17%||Blackrock MyMap 5 Select ESG Fund|
|Growth Ethical Fund||5/7||N/A||0.20%||Vanguard ESG Developed World All Cap Equity Index Fund (UK)|
|Tech Giants||6/7||29.13%||0.32%||Legal & General Global Technology Trust|
|Clean and Green||6/7||11.03%||0.90%||ASI UK Ethical Equity Fund|
|Rising Stars||6/7||14.60%||0.78%||Vanguard Global Emerging Markets Fund|
|American Dream||5/7||16.61%||0.10%||Vanguard U.S. Equity Index Fund|
|Best of British||6/7||6.46%||0.06%||Vanguard FTSE U.K All Share Index|
|European Essentials Fund||6/7||11.48%||0.12%||Vanguard FTSE Developed Europe ex-U.K. Equity Index Fund|
|The Medic Fund||6/7||10.50%||0.69%||Legal & General Global Health & Pharmaceuticals Index|
|Slow and Steady||3/7||4.31%||0.22%||Vanguard LifeStrategy 20% Equity Fund|
|Balanced Bundle Fund||4/7||8.25%||0.22%||Vanguard LifeStrategy 60% Equity Fund|
|Growth Stack Fund||5/7||10.21%||0.22%||Vanguard LifeStrategy 80% Equity Fund|
Past performance is intended as a guide and cannot guarantee future results. If you are unsure of how to invest I would advise that you seek independent financial advice.
Plum App Review
Everything about the Plum money management app is designed to make this as accessible to everyone as possible. There is a clean interface, with clear graphics that make navigating through the various functions really user friendly.
Security is outstanding, which considering it is linked to your bank account is an absolute must. I was asked to provide a digital password as well as biometric authentication (face and touchID). Plum has received 4.7 out of 5 stars on the app store with reviews that commented on the personal and friendly interface.
Within moments of opening a Plum account I had identified a couple of subscriptions that I no longer used and cancelled them. The algorithm had also worked out how much money it would take from me this week and let me know when this would be transferred to my new Plum account.
As a negative, there was a bit of upselling to the paid accounts almost immediately, however, this was quick and easy to get rid of and to be expected with any App of this nature
Research Service and Tools Review
Because Plum has essentially done all the work for you by selecting the Vanguard funds on offer, there isn’t much in the way of research, tools or an information service to help you make money from your investments. However, you can of course track how your investments are performing and withdraw your funds at any time.
In addition to this, Plum has a blog section to their website, where they share helpful articles that can help you identify whether you are ready to start investing with Plum, as well as some information on the past performance of the funds they have on offer and details of some of Plum’s investment features.
There is also a ‘plummunity’ forum, where members can share their experiences, and ask questions. Being fairly new this is still quite sparse on information, however, it is a great little way of talking to fellow investors in order to share investment tips.
Fees and Charges Review
How much does Plum cost?
The Plum Basic account is totally free of charge, which is great if you are simply looking for a way to utilise artificial intelligence in order to effectively save as much as possible in line with your income and spending. Having the option to earn interest is also a great feature and really makes this competitive.
The Plum Pro account costs £1 per month and also incurs fund management charges for your investments of 0.15% and fund fees of 0.08% – 0.90%. As a comparison Moneybox charges fund fees of 0.12% – 0.30% as well as fund management charges of 0.15%, which makes Plum a reasonably low cost offering.
Plum Pro levies a monthly fee of £2.99 on top of the fund management and fund fees.
Plum Ultra has an account fee of £4.99 per month.
Guide to opening an account
The Plum mobile app really couldn’t be easier to use. Setting up your account takes seconds, and you really don’t need to have bank login details to hand as it automatically links to your current account through your banking app (with your permission of course), accesses your bank transaction data and your bank account balance, and in moments the savings bot has got to work in order to analyse your spending habits, crunching numbers to work out where you can potentially start saving so you can begin to set aside money.
You can link Plum to multiple bank accounts, however it is for private accounts only and will only be able to link to major UK banks.
Having been through the process, and read some of the reviews from other users, I suspect that Plum has an affiliate deal with Octopus as it seems to be the default supplier they recommend when analysing your energy bills. That being said, they can tell you how much you stand to save by switching and handle all the fiddly admin for you.
Deposit and Withdrawal Review
Deposits into your Plum account happen automatically by direct debit so this isn’t an area that you really need to think about.
Withdrawals are free, fairly straight forward and can be completed in a few simple steps within the Plum app. You have instant access and should receive your money into your account within 24 hours, although Plum claims that this is more often than not completed within 30 minutes of the withdrawal request.
Should you wish to withdraw your investments, this can take up to five working days as your investments will need to be sold prior to you withdrawing your funds. This money will be paid into your Plum account and you will need to initiate a withdrawal back into your main bank account from there.
Customer Service Review
The Plum website has a help centre with useful FAQ’s and a telephone number, however, I failed to get any reply from their customer support team when I tried calling the number provided on the website whilst conducting this Plum review. Within the app there is a chatbot, however, if you want to speak to a real person you can expect to wait around for a response. I waited for two and a half hours for a response. However, you don’t need to keep the app open while you wait, as the response to your question will be sent to the email address you provided.
Who is Plum Suitable For?
Plum has been targeted at customers who need help saving, whether it’s as a nest egg, or towards a particular goal. Plum effectively analyses your spending every few days using AI in order to identify the perfect amount to save.
Plum is also a good tool for people looking to pay off their overdraft or credit cards by putting aside money that you can use later. Plum will only use your overdraft for auto-deposits once you have a zero balance. This can help anyone who is looking to take control of their finances.
When it comes to investing, Plum aims to provide an investment platform that is so easy to use, that even people who have been deterred by lack of investment knowledge can have the confidence to start their investment journey. Plum provides a safe, easy to use platform for first time investment groups who don’t typically invest, such as women and millennials.
Some key information to help you navigate the Plum app.
How to contact Plum?
The best way to contact Plum is through the chat function within the app. Whilst response times can be slow, you don’t need to stay logged into the app as you will receive a notification as soon as you have a response to your question.
Plum is also available on email at firstname.lastname@example.org and their customer support team is available from 9.00-17.00 on weekdays and 10.00 – 16.00 on Saturday and Sundays.
How to withdraw money from Plum?
Customers wanting to withdraw money can do so by logging into their Plum app and selecting the ‘Home’ tab. From there tap ‘Pockets’ and ‘Withdraw’. Simply enter the amount you wish to withdraw and wait one working day for your funds to appear in your bank account.
How to close an account at Plum?
Closing your account with Plum is fairly straightforward, however, you should ensure you have paused all saving direct debits previously and withdrawn all your money to your main bank account. Once this has been completed simply go to Personal Details and select Close Account.
Is Plum any good?
This very much depends on what you are using it for. Essentially the concept behind the Fintech start up was as a tool to help you save. In this endeavour they seem to be fairly effective and the reviews from customers on the app store are reflective of this. However, unless you are putting money aside for the very short term, the question arises of what to do to effectively maximise these savings, and to this end they have introduced their stocks and shares ISA. Whilst the account fees are low and Plum can automatically transfer your savings into your ISA account for you to invest in one of their portfolios, with your risk level in mind, these portfolios are actively managed through Vanguard, and you effectively reduce the fees you pay were you to invest through Vanguard directly.
Is Plum safe?
In short, yes Plum is safe to use. It has taken all the correct steps to ensure the safety of your funds. They are covered by the Financial Services Compensation Scheme (FSCS) which means you could get up to £85,000 compensation should anything happen to Plum or their custodians to put your money at risk. The money you have with Plum is stored as E-Money with Barclays bank, your investments are held with Vanguard and protected by the FSCS, and money held in your interest pockets is held on Trust with a UK Bank.
Plum uses an Electronic Money Provider, PayrNet, to set up and administer an e-wallet where you money is held, effectively adding to your security as well as 256-bit TLS encryption to protect your data.