Plum App Review — Smart AI, Dumb First Impression?

Managing to build up savings every month is something incredibly difficult for the average person to maintain, and as a result, most people have less than £2000 in savings. Even fewer people regularly make use of those savings by investing their money, even if it’s in small amounts.

The problem is, saving money is seen as a chore by many people, and they generally have a tough time setting aside money or budgeting for things they want to buy, instead impulsively making purchases based on the availability of cash and the opportunity to buy something.

The Plum App aims to solve this by changing the rules. No longer is putting cash to the side about mental fortitude and prudent planning, but it’s left in the careful “hands” of an AI, which analyses your income, expenses, and transactions, working out and automatically setting aside a sustainable amount to save each week. It does this by being linked to your bank account and automatically reviewing your cashflows. You still retain full control though — you won’t wake up one morning to find out Skynet used all your money to take over the world.

The app allows you to set limits on how much is saved each month, and you can stop it saving automatically anytime you want to. There are other alternatives like the Chip Savings app, but Plum has received some pretty good feedback, so it only made sense to check it out.

Plum app review — How I found it

While I found the Plum app to offer a lot of useful features, I found a problem where each time I opened a new section of the app, I got information overload and multiple sign-up and upsell offers thrown at me. This was exceptionally bad on initial sign-up and I found myself tapping through a multitude of different pop-up text walls and T&C agreements with offers for payment plans and upgrades each time I opened a new section of the app.

I understand the need to inform a new user on features of an app, but there is a right way and wrong way of doing it, and this is most definitely the wrong way. Even tapping through myself, I nearly signed up to an investment plan which would have set up a direct debt to deduct monthly percentages from my bank account, with a £1 monthly charge for the service.

With that said, I found the Plum App to have a lot of fairly useful features, even though some of the best were behind paywalls. The interface, once all the popups were removed, was actually pretty clean and intuitive, with your savings and investment pots clearly up front and centre, reminding you of your progress and balance.

There were a number of useful features that I will go into more detail in this Plum App review.

Pros

Cons

  • High easy-access savings account up to 0.4%
  • Sleek interface
  • Customizable savings trategy
  • Automated savings AI
  • Mostly FSCS protected
  • Variety of investment options
  • Speedy money transfers
  • Overbearing product spam on sign-up
  • Best features locked behind paywalls
  • While low investment fees, plenty of free alternatives

What Plum offers savers

Plum allows saving to be done automatically with the guidance of an intelligent algorithm. Each week, the app will use a direct debit to withdraw funds from your bank account and deposit them into a “pocket.” This will depend on your saving targets, the mood you have selected, and how much you’ve spent, earned and your historical savings rate.

You set the aggressiveness of the savings algorithm by selecting a mood which starts at Normal but can range from Shy to Beast Mode. This doesn’t change the frequency of savings deposited, but it changes the amount of savings stored. Beast Mode is 1.75x the normal rate, while Shy is 0.5x the baseline. This is set by you and reflects how much you feel like allowing to be stashed away in your saving pocket.

You also have access to the very useful roundups feature. This is one of my favourite savings tools as it’s thoughtless, rounding up any expenses you have to the nearest pound and saving the difference.

How does that compare?

The saving rates are pretty generous to a regular savings account. Most quick-access savings accounts offered by banks will have below 0.2% interest, with ISAs being a requirement for anything over 1%. Even the free savings pocket offers 0.25% and is a great default option for any temporary saving balances (such as saving for a deposit or a holiday). The paid services get a little more complicated though.

For context, to make up the £1 per month (£12/year) account cost with the 0.4% returns account, you would need a minimum balance of £3000 in your Easy Access Plum Plus pocket. This is, in my opinion, an excellent savings rate compared to banks, but requires you to save thousands to make it worth the cost.

For anyone that doesn’t already have thousands to stash away, I wouldn’t recommend going above the free tier unless you plan on investing or using some of the other features, such as cashback.

How to invest with the Plum App

Investing with Plum requires at least the £1/month Plum Plus plan and involves you choosing to deposit money into a variety of pre-set investment baskets. These baskets are fairly industry-standard and range from regular Index stocks and bonds to risky medical companies and high-growth portfolios. Plum does a good job of explaining each one and the risks and costs involved with investing in them. Plum is also in the process of bringing out a Self-funded pension fund, which would be a great feature when it arrives in future.

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Is it worth it?

I’m highly experienced with investing accounts and while I know of better ways to invest with no fees, the Plum app provides a simple and automatic platform for investing for the average person. Plum charges a 0.15% fund management fee and fund fees between 0.06% and 0.9%. It’s stated that they have average fund management costs of 0.48% per year, so on a £1500 investment, it would cost you £18 per year to maintain. This seems to include the £12 per year Plum Plus cost, but this isn’t clear on their site.

Their investment funds have mostly performed well on a yearly basis over the last 5 years, ranging anywhere from 4% annualized return with the stocks and bonds portfolio, to 18% per year with their “high risk” Tech Portfolio. These in themselves aren’t bad returns, but management fees will significantly cut into these gains.

Is Plum safe to use?

Depending on which tier of Plum membership you use, and whether you are saving or investing, you will be offered different ranges of safety for your money.

The Instant Access Pocket is the basic savings pocket you can have with a free account, and this is the only pocket which is not Financial Services Compensation Scheme (FSCS) covered. The primary pocket is the only one which provides instant access to your money, while any other pocket will take anywhere from 1-7 working days. However, all other pockets offered, as well as their investment funds are FSCS protected, which means if Plum, or any of their subsidiaries fail, you will be covered up to £85,000. This does not protect your investments from declining in value, however.

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Plum is authorized and regulated by the Financial Conduct Authority (FCA) and has had no history of financial misconduct or cases where people have illegitimately lost money using the app. I consider it safe to use.

The many tiers of Plum

There are numerous subscription tiers to the Plum app, each tier includes the benefits of the previous.

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Plum Basic

This is free to use and offers a variety of fairly useful features, including:

  • Automatic AI assisted saving
  • 0.25% savings pocket
  • £1 roundup savings
  • Household bills analyser
  • Automated payday savings (IOS only)

Plum Plus

This account costs £1 per month and gives you access to more features of Plum such as:

  • Investment accounts
  • 0.4% savings pocket

Plum Pro

This version costs £2.99 per month and has much more specialized features available, including:

  • Up to 11% cashback on partner brands
  • Additional savings pockets
  • Goals to help you plan savings
  • Rainy day savings (saves or invests when it rains)
  • 52 week challenge – adds a pound to your savings each week for a total of £1,378 over a year
  • Additional diagnostics such as True Balance and future reports (IOS only)

Plum Ultra

For £4.99 the main feature offered is the Money Maximiser which actively moves free cash from your bank into the 0.4% savings pocket, and then transfers it back in time for bills. This helps maximise your interest on any money just sitting in your account waiting for bills.

Additionally, Plum Ultra users get better cashback rates than the Plum Pro tier.

Is Plum free to use?

The basic tier of Plum is free to use, but it has payment tiers from £1 per month to £4.99 which each give access to different features. You cannot invest with Plum or access the highest saving rates without the first paid tier.

Conclusion

Plum offers savers a great automated package to help with making basic savings, but without paying, you don’t get access to much more than that. The real value in Plum is the premium savings pockets providing 0.4% that are FSCS covered and the flexibility of its platform to provide savings, bill reduction, and investments all in the same place.

Being able to set it up and let it do its thing, automatically building your savings and investments is a pretty useful tool, but for financially savvy savers and investors, you are paying for the convenience of being able to do what you could do for free elsewhere. I would recommend it for the average person looking to improve their savings or possibly start investing for the first time.

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Author

Edward

Edward brings years of experience in a variety of different fields including online marketing & No-code app development, and he's been investing in stocks and cryptocurrency since 2016. Outside of work you'll usually find him watching movies at the local cinema or playing games in the Apple Arcade.

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