The Two Minute Review
PROS
- 🧑🎓 Great for beginners or those who want to “set and forget”.
- 📈 Round ups make saving effortless.
- 🤑 Can start with just £1.
- ↔️ Wide range of accounts from ISAs to SIPPs.
- 👛 Fees are reasonable for medium to large portfolios.
- 📈 Fund performance has been better than some rivals.
- 🛠️ Lots of useful tools.
CONS
- 💰 Round ups are not taken instantly, but as one lump sum weekly.
- ☎️ No phone customer service and web chat is slow.
- 💸 £1 monthly fee is high for smaller portfolios.
- 😐 Limited range of investment options.
- 🕰️ Can take ages to build up a big pot via round ups.
What The Experts Say
What Users Say
4.6/5
Some Interesting User Comments
We spend hours reading user comments to see what feedback people are giving. Here are some positive and critical comments that stood out to us:
Positive
4/5
The rates are highly competitive. It works in the background, so you don’t need to worry about putting in money manually. The only negative is a lack of referral schemes. I have recommended this app to so many friends, family and colleagues, but there’s no way for me to benefit. That’s why it receives 4*
5/5
This is NOT a short-term trading platform and if you are looking to buy stocks or funds you should be willing to hold them for their long-term potential. That said, it would be appreciated if the buy/sell process could be expedited in future, as the market is volatile right now and some stocks (Nvidia for example) can reach long term buy and sell triggers very quickly
5/5
It’s helped me save so effortlessly, see where I’m spending my money and has great tips and tricks. I’d recommend it to anyone
Critical
1/5
3/5
Nice little app but could do with some improvements. Payments take a while to be debited and deposited into accounts. My payday boost should be taken on or the day after payday. Not collected on the Wednesday after and debited the following Monday. I’m only able to add a payday boost into one account, I’d like to be able to have the option to pay into multiple, and I’m sure others would love this option too. Tax Relief is paid at the end of the following month. With other providers this is instant so no reason why Moneybox shouldn’t be able to do the same. Roundups are a fun feature, but keeping my money in cash savings for now rather than investing. The £1 a month charge is a bit off putting.
2/5
I have never experienced this lag on any other platform. In the end my order always gets executed at a higher price. Use Moneybox for long term savings, but not for individual stock purchases.
The Deep Dive
Overview
Moneybox is one of the growing range of apps you can use to save and invest your spare change. Founded in 2016 by co-founders Ben Stanway and Charlie Mortimer, the company’s mission is to make saving and investing accessible for everyone, regardless of their financial background or experience.
What sets Moneybox apart is its user-friendly app that allows users to save and invest through various methods like ’round ups’. This feature, alongside its easy-to-use interface, has made Moneybox a popular choice among young professionals and those new to investing. It now has over a million customers.
Moneybox offers a range of services including savings accounts, stocks and shares ISAs, Lifetime ISAs, personal pensions, and general investment accounts. Their focus on long-term saving strategies, coupled with the option to invest in global companies, provides users with a diversified investment portfolio.
Account Options
🏦 Moneybox offers a variety of accounts catering to different financial goals and needs.
They break down into three types:
Investment Accounts
Stocks & Shares ISA: This account allows you to invest in the stock market without having to pay any tax on your profits. You can invest a maximum of £20,000 a year.
Junior ISA (JISA): Like a stocks and shares ISA but designed for parents and guardians to save and invest money on behalf of their children until they turn 18 (when they can take control of the account). You can put up to £9,000 a year into this account and gains will not attract tax.
Stocks and Shares Lifetime ISA (LISA): Aimed at younger savers, the Lifetime ISA offers a 25% government bonus on contributions, up to a maximum bonus of £1,000 per year. You can only spend the money in this account on either purchasing a first home or for retirement otherwise the government will take the bonus back.
General Investment Account: For those who have maxed out their ISA allowance, Moneybox offers a general investment account that allows investing in stocks and shares without any limits on contributions.
Savings Accounts
Savings Accounts: Moneybox offers a Simple Saver easy-access savings account, which allows you to withdraw your savings at any time. It also offers notice accounts, where you have to give a set period of notice before withdrawing money. Currently, Moneybox offers 32, 45, 90 and 120-day options. The benefit of these accounts is that they have higher interest. For example, the Simple Saver account currently offers 4% interest while the 95 Day Notice account offers 4.96%. It’s a trade-off between convenience and return on your money.
Cash ISA: Like the Stocks & Shares ISA but you earn money through interest rather than investing. It has the same tax benefits and £20,000 contribution limit. Currently (February 2024) it has an interest rate of 5.09% which makes it the top cash ISA product right now.
Cash Lifetime ISA: Similar to the Stocks & Shares Lifetime ISA but focused on cash savings with a fixed interest rate, ideal for those saving for a first home but wary of market fluctuations.
Generally, these savings accounts offer really good rates of return. In fact, the Cash LISA is currently the best in the market with an interest rate of 4.25% (though this drops to 3.25% after a year).
Retirement Accounts
Personal Pension: Moneybox offers a personal pension account that allows users to consolidate their old pensions and manage them within the app. Basic rate taxpayers will receive a 25% top-up contribution from the government on money they put into this account. So if you put in £80, it will be rounded up to £100 (Moneybox will do this automatically). If you’re a higher or additional rate taxpayer you can claim more back through self-assessment.
What Can You Invest In?
😐 Moneybox has limited investment choices – but that’s by design.
There are two ways to invest using Moneybox:
Starting Options
This is Moneybox’s most simple way to invest. When we signed up we could pick between three ready-made investment portfolios:
- Cautious Fund: Offers lower exposure to global shares (around 15%), investing more into less risky assets such as bonds. It is suitable for those who prefer a conservative investment approach.
- Balanced Fund: Provides a moderate level of risk and exposure to global shares.
- Adventurous Fund: This option offers higher exposure to global shares (up to 80%), suitable for those who are willing to accept higher risk for potentially higher returns.
We were also given a toggle option to choose whether we wanted our investments to be socially responsible.
We think the Starting Options are an easy way for new investors to get going – but, while you can get a breakdown by asset class of each portfolio, we would like to see geography and sector split too.
Customised Allocations
If you want more control over your portfolio, you can manually choose what you invest in. We were given the option of 24 funds from huge investment firms like Blackrock, Vanguard and Fidelity. If you’re setting up a Stocks and Shares ISA you also get the choice of 20 stocks.
We get what Moneybox is trying to do in giving some users more control – but feel like it falls between two stools. If you’re not confident picking stocks or funds, then go with the Starting Options – but if you are confident then we would recommend using another platform.
Performance
📈 Generally, returns have been acceptable.
Performance has struggled recently due to the lingering effects of the pandemic – so let’s go back to 2017. Below we have compared annual results against Nutmeg and also looked at what would have happened if you’d invested £1,000 in 2017:
Fees
🤔 Moneybox’s fees can be confusing.
Again, the costs vary depending on the type of product.
Investment Accounts
Subscription Fee: There is a subscription fee of £1 per month, starting after the first three months.
Platform Fee: Moneybox charges a platform fee of 0.45% of your total yearly investments. This fee is charged annually but billed on a monthly basis.
Fund Provider Fees: These fees range between 0.12% and 0.58%, also charged annually but billed monthly. These come from the fund providers that Moneybox uses rather than Moneybox themselves.
Currency Conversion Fees: If you decide to buy a US stock through the platform, you will be charged 0.45% for converting GBP to USD.
Overall, Moneybox can be pretty expensive for smaller accounts – mainly due to that £1 subscription fee. Let’s compare costs against Nutmeg’s and Moneyfarm’s auto-investment account and examine the fees for some example portfolios:
As you can see from our examples, MoneyBox becomes competitive with these rivals once you have around £5k invested and after this it starts to become cheaper. The problem here is that most people will be investing small amounts into Moneybox as it is designed for beginners.
Savings Accounts
These have no monthly fee. Yay!
Pensions
You’ll be charged an account fee of 0.45% on the first £100k and 0.15% on anything over that. Plus you’ll be charged a fund fee depending on the investment you picked. Here’s how they break down:
- Fidelity Index World Fund: 0.13%
- Old Mutual MSCI World ESG Index Fund: 0.27%
- Blackrock LifePath Fund: 0.29-0.30%
- HSBC Islamic Global Equity fund: 0.63%
Opening An Account
🚪 Account opening for us was easy when we tested.
We had to put in some basic details, verify our email and set up a PIN. (Note: for an ISA you will also need your National Insurance number).
We were then asked to choose an account type. Once done, we were presented with the option to deposit an initial amount, set up a weekly deposit and to switch on roundups (explained below). We were also given the option to set up a “Payday Boost” – essentially an extra monthly deposit that is collected when you are feeling flush on payday. Before entering the platform we had to set up a Direct Debit.
After this, we had to select our Starting Option from the Cautious, Balanced and Adventurous ready-made portfolios.
Finally, we had to answer a few questions including salary, industry, level of work (manager etc) and income before tax. They were apparently asked to meet “regulatory requirements”.
The whole process took about 12 minutes and we were then free to use the platform.
Some Cool Features
😎 There are some extra features worth pointing out.
Round Ups
Moneybox uses open banking to connect to your bank account or credit card. Each purchase you make is then rounded up to the nearest pound and the difference is invested. So if you spend £3.50 on your morning coffee it will round this up to £4.00 and pocket 50p into your Moneybox account.
This can be set to happen automatically or you can do it manually on each transaction within the app if you want more control.
When using the app we were surprised that this doesn’t happen instantly. Instead, Moneybox calculates this weekly and takes it as a lump sum from your nominated bank account (which can be different from your spending account). Seeing a big chunk come out each week made it feel less painless than we’d initially envisaged!
Tools
Moneybox has a selection of handy tools within the Discover section of its app. We particularly liked:
Pension Calculator: Enter some info about how much and how regularly you plan to deposit and it will show you a graph of your pension’s projected value against your goals.
ISA Time Machine: A simple tool to project the future value of your ISA.
House deposit Calculator: A really useful tool for those opening a LISA. It calculates government contributions and potential interest so you can figure out how hard you have to save to get on the housing ladder.
Mortgages
Moneybox has launched a Mortgage brokerage service – which we think makes sense given they offer a LISA. Within the Accounts tab on the app you can now find a mortgage calculator, apply for a mortgage in principle and arrange a call to get mortgage advice.
How Good Is Customer Service?
☎️ Customer service is below average.
We were disappointed that Moneybox doesn’t offer you a way to chat with a customer service rep on the phone. Instead, you have to get in contact via email or chat in the app. We personally tested this out and were quoted a two-day turnaround for getting a reply.
Is It Good For Beginners?
🧑🎓 Yes, it’s awesome for beginners.
Moneybox’s whole proposition is set up for beginners. The simple choice of 3 ready-made portfolios really does take the stress out of investing. The fact you can also customise from a limited selection of funds and stocks allows you to take baby steps towards being a more active trader.
The educational materials are top class too. The content is nicely laid out and contains lots of graphics and videos. There are also frequent market updates and coverage of key events like budget statements. We’re particular fans of their Academy which takes complete novices through the basics in a numbered set of lessons. So many other providers don’t arrange their content in an ordered way so it can be hard to know where to start. Bravo Moneybox!
However, one drawback for newbies is the £1 subscription fee. It is really expensive for very small portfolios compared to other providers who charge on a percentage basis. However, if you value the convenience, easy-to-use app and features like auto-invest it is easy to overlook.
Is It Safe?
🔒 Moneybox is generally considered safe.
Moneybox is regulated by the Financial Conduct Authority (FCA) in the UK, which means it must adhere to strict financial and ethical standards. Also, investments made through Moneybox are protected under the FSCS, up to £85,000 per customer. This provides a safety net in case the company faces financial difficulties.
Lastly, while all investments carry risk, Moneybox offers a range of diversified investment options to help mitigate them.
Is Moneybox Any Good?
Yes, it’s a great app. Moneybox has made investing accessible for everyone and its round ups make saving a doddle. It’s perfect for those who want a hands-off investing experience and those who want to bring their savings and investing accounts together into one platform. The app is also a joy to use and packed with loads of useful features.
However, we would like to see more detail and choice over investments as we think lots of people will outgrow it very quickly.