How you could grow your savings and start investing easily

There’s nothing like the start of a brand new year to focus on sorting out your finances.

During the various pandemic restrictions, you may have managed to save money that would typically be spent on restaurants, bars and vacations abroad.

Although there has been a lot of spending lately – especially in the run up to Christmas – you may have managed to keep some of those savings, or at least have continued your new savings habit of putting money aside.

During the various restrictions of the pandemic, you may have managed to save money that would usually be spent on restaurants, bars and vacations abroad.

But while that’s something to applaud, chances are your money isn’t working hard enough and languishing in bank accounts paying little or no interest.

The good news is you can grow your money with Plum, which offers savings and investments for everyone, with better interest rates than the big banks** and access to investment funds and stocks.

Saving vs investing and how Plum can help you

While it’s important to have some cash on hand for emergencies, over long periods of time falling interest rates and inflation mean you can’t buy as much with your money.

The Bank of England predicts inflation will hit 6% this year, meaning every £100 saved would be worth just £94 due to how the rising cost of living is eroding people’s purchasing power. ‘silver.

Having too much money saved means missing out on the possibility of getting better returns from investing.

Investing in stocks of companies can provide inflation protection, as companies can potentially raise the prices of their products in times of rising inflation, increase profits, see their stock prices rise and return equity. money to shareholders in the form of dividends.

Still, investing in a single company is risky business, and investors who buy stocks directly need to build a diversified portfolio to spread their risk.

Instead, you can try using funds, which allow ordinary investors to pool their money and invest in a basket of stocks, either expertly selected by a professional fund manager or as tracker following a defined investment index.

You don't need a big lump sum to start investing with Plum.  In fact, you can invest quite a bit but often from just £1

You don’t need a big lump sum to start investing with Plum. In fact, you can invest quite a bit but often from just £1

And investing is not just for the rich, it can be started with small amounts.

For example, you don’t need a large lump sum to start investing with Plum. In fact, you can invest quite a bit but often from as little as £1. Don’t worry if what you can afford to set aside on a regular basis seems small. It’s about getting into the habit of saving investment money as much as anything else.

Plum offers access to attractive funds. You can invest anywhere in the world or choose where your money is invested.

This could be by region, such as the UK and Europe or further afield in Asia and Africa. Or you can also choose based on industry, like choosing a fund that invests in tech giants like Facebook and Apple, or the option based on doctors, healthcare, pharmaceuticals, and biotech.

Alternatively, you can make a choice based on how much risk you are comfortable taking with your money.

Nearly a quarter of Plum investors choose the higher-risk Growth Stack fund***, which had a historical average annual return of 9.76% (as of December 2021), while there is also the Balanced Bundle fund. most popular (average annual return 8.14 percent) and the Slow & Steady option, preferred by 20 percent of Plum investors, with an average annual return of 4.94 percent.

Keep in mind that, as with any investment, your capital is in danger and the value of your investment can go down as well as up and that past performance is not a reliable indicator of future results.

There is also the opportunity to invest in what matters to you. One fund invests in stocks of global companies selected for their environmental, social and governance track records and another in those selected solely for their social responsibility.

The beauty of Plum is that once you’ve created your account – which can be done in minutes – and selected the funds, you know your money can start working hard.

“We saved £5,000 to fund our new kitchen thanks to Plum”

Downloading the app is a key step to start your savings journey, as Tom Cox and his girlfriend Martha discovered. The couple, who live in Ipswich, downloaded Plum when they decided to save for a new kitchen in their new home.

Tom says, “I came across Plum and the concept seemed so simple. I downloaded it and within minutes I was up and running.

“He logged into my bank account and immediately calculated my regular monthly expenses – our mortgage, streaming subscriptions and car payments. The fact that the software calculates what you can store based on history helped us a lot. It’s tempting to go wild in the aisles on payday – but Plum has added a level of structure to our finances, so we can live within our means, save but also have fun.

Once Martha set up her Plum account, the pair set themselves the goal of saving £5,000 in 12 months. Tom adds, “We often had competitions to see who could put the most aside, adjusting our moods to ‘beast mode’ from time to time. When we saved enough, we were finally able to book the kitchen fitters.

“What we really love about Plum is the experience. It’s always nice to get a virtual punch every time you spend an extra £10!’

How Plum Works

The app will connect all your bank accounts and cards in one place to get a complete view of your spending.

It will then calculate what you can afford to save and automatically set money aside each month. Adjustable moods change the amount you set aside each month, from ‘shy’ to ‘dumb’ mode.

Automating savings and investments is a great way to grow your wealth and achieve your goals, whether it’s for an account in case of bad weather, to finance a vacation or a period of travel – or simply to live carefree.

Plum says it has over a million users who all choose it to grow their money.

There are more savers who need help with almost half (46%) of UK consumers saying they lack the confidence to make investment decisions*. The main drivers of lack of confidence in savings and investment decisions were: the risk of losing money; finding it too complex and confusing; not knowing enough about the options.

Plum can effortlessly help you further grow your savings and investments, all while comparing your bills in the background.

Not only do you enjoy effortless saving and investing, but your money is protected by the Financial Services Compensation Scheme (FSCS) with Plum’s savings accounts provided by Investec Bank.

Plum has also adopted serious technology to secure your account, including face and fingerprint identification, as well as the use of 256-bit TLS encryption.

* https://www.tisa.uk.com/the-gender-confidence-gap-is-affecting-uk-savers-ability-to-invest-or-save-according-to-tisa-and-ey-research /

** https://intercom.help/withplum/en/articles/2568751-plum-investments-vs-high-street-bank-interest-rates. Plum’s Easy Access Pockets of Interest are provided by Investec Bank Plc.

*** Plum internal data. Average annual return for the last 5 years.

Plum does not provide investment advice and individual investors should make their own decisions or seek independent advice. Just remember, as with any investment, your capital is at risk. The value of investments may go up or down and you may get back less than your initial investment.

Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any business relationship to affect our editorial independence.

Maria D. Ervin