Plum Review 2024: Pros & Cons

Table of Contents

Plum is a highly acclaimed smart money app founded in 2016 by Alex Michael and Victor Trokoudes. With over 1 million users and £1 billion saved, Plum employs open banking technology to connect bank accounts and credit cards. The app utilizes AI to analyze spending habits, providing personalized suggestions for saving and investing. Originally a Facebook Messenger chatbot, Plum evolved into a standalone app, available on both Android and iOS, making money management effortless and effective.

Plum's innovative approach automates the saving process, eliminating the need for manual effort. The founders, inspired by a personal savings challenge, developed an algorithm that monitors spending and sets aside affordable amounts for users, emphasizing the ease of saving for desired items. The app stands out for its user-friendly design, automation features, and commitment to making saving less burdensome.

Account Types

Plum offers three primary investment accounts, each catering to specific financial goals:

  1. Stocks & Shares ISA:
    • Allows tax-free investing up to £20,000 annually.
    • Limited to contributing to one Stocks & Shares ISA per tax year.
  2. General Investment Account (GIA):
    • A standard investment account with no tax benefits.
    • Potential taxes apply if profits exceed £6,000 in a tax year.
  3. Self-Invested Personal Pension (SIPP):
    • Designed for retirement savings, providing automation and flexibility.
    • Allows contributions and the option to transfer existing pensions.
    • Offers tax relief, and funds cannot be withdrawn until the age of 55.

For Plum's specific account types:

  • Plum General Investment Account (GIA):

    • Functions as a standard investment account.
    • No tax advantages; potential taxes on profits over £6,000 in a tax year.

  • Plum Self-Invested Personal Pension (SIPP):

    • Designed for automated and flexible retirement savings.
    • Allows contributions and transfers of existing pensions.
    • Offers tax relief, with a consolidated view of all accounts.

  • Plum ISA:

    • Utilizes the annual allowance of £20,000 for tax-free investing each tax year.

Account Types and Fees with Plum

Plum offers three account types catering to different financial needs:

  1. Basic (Free):

    • 3.51% interest on cash.
    • 2 separate accounts.
    • Option to make personal investments.

  2. Pro (£2.99/month):

    • All Basic features.
    • 3.72% interest on cash.
    • 15 separate accounts.
    • Automatic investing.
    • Goal-setting and challenges.
    • Cashback on spending.

  3. Ultra (£4.99/month):

    • All Pro features.
    • 3.72% interest on cash.
    • Plum card.
    • Expanded stock and fund options.

  4. Premium (£9.99/month):

    • All Ultra features.
    • 4.21% interest on cash.
    • Even more stocks and funds.
    • 'Repeat stock investments' tool.

Investment Fees:

  • Investment fees include a £1/month charge after the first month.
  • Fund management fee ranges from 0.06% to 0.90%.
  • Average annual provider fee of 0.15%.
  • Costs are deducted from investments, in addition to the monthly fee.

Plum Pro Features:

  • Rainy day savings rule.
  • 52-week saving challenge.
  • Pay days feature.
  • Monthly spending diagnostics report.
  • True balance calculation.
  • Cashback rewards.
  • Splitter tool for fund allocation.
  • Interest Pockets.

Plum Ultra Features:

  • All Pro features.
  • Plum debit card.
  • 33% increase in cashback offers.
  • Money maximizer for efficient spending.

Plum Premium Features:

  • All Ultra features.
  • Increased stock options (3000).
  • Expanded fund selection (21).
  • 'Repeat stock investments' tool.

Is Plum Safe?

Yes, Plum is a safe platform for managing money. It is authorized and regulated by the Financial Conduct Authority (FCA) , indicating approval and trust in handling users' finances. Additionally, investments made through Plum are safeguarded by the Financial Services Compensation Scheme (FSCS) , offering protection up to £85,000 in case of unforeseen circumstances like the investment provider going out of business.

While the FSCS coverage doesn't extend to funds held in a general Plum account, Plum takes various measures to ensure user safety and security. For instance, it never stores or accesses users' bank login details, and it employs read-only access for transaction data, providing limited information.

Customer Review:

Plum receives high praise from its customers, earning an impressive score of 4.4 out of 5 on Trustpilot from over 5,700 reviews. Users particularly appreciate the platform for its ease of use in initiating savings and its valuable assistance with budgeting.

Advantages:

  • Effortlessly automate your savings.
  • Registration and usage are free of charge.
  • Convenient access to Plum's services through its Android and iOS apps.
  • 24/7 withdrawal capability with funds typically received within 24 hours, often even faster.
  • Plum's partnership with PayrNet, an EU-licensed e-money provider, ensures the safeguarding of funds in your Plum account.
  • The algorithm implemented by Plum prevents auto-deposits from causing overdrafts, unless manual deposits are made while in overdraft.
  • Opportunity for potential growth through investment.
  • Option to create an Interest Pocket that earns interest.
  • Automated deposits starting from £1.
  • User-friendly setup with the flexibility to adjust savings amounts.

Drawbacks:

  • Investment involves risk, and users should be aware that there is a risk of losing capital when investing with Plum.
  • Customer funds, excluding those in Interest Pockets, are not covered by the Financial Services Compensation Scheme (FSCS).
  • Withdrawals may not be instantaneous and can take up to 24 hours to process.
  • Customer support is available only during specific office hours from Monday to Sunday.
  • Funds in a primary pocket are not protected by the Financial Services Compensation Scheme (FSCS).
  • Investing charges may be relatively high for small investment amounts.
  • Some features that require payment with Plum are offered for free by other competing apps.

Closing Thoughts:

Plum receives a positive review from us. Its user-friendly interface and automatic savings features make it an excellent tool for those looking to save and grow their money effortlessly. The customer service, while above average, provides a live-chat option for quick responses.

While Plum may have slightly higher fees compared to other investment platforms, its simplicity and seamless integration with bank accounts make it a worthwhile choice. The app's ability to calculate affordable savings based on individual spending patterns is a notable advantage.

In conclusion, Plum is a valuable tool for individuals who struggle with saving, offering features like mood-based deposit adjustments. Regulated by the FCA, Plum ensures the safety of funds held in savings and investment accounts through the FSCS. For a more in-depth comparison with other personal finance apps, check out our article on the best money apps in 2024.

Ultimately, Plum's automatic savings feature provides a convenient and efficient way to set money aside without the need for manual transfers. While the general account does not accrue interest, Plum introduces Interest Pockets and diverse investing options, catering to both novice and experienced investors.If you're seeking an alternative to Plum, you may want to explore similar platforms such as Chip or Cleo, each offering unique features and functionalities to help you manage your finances effectively

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