Recent times have seen an increased focus on consumer savings and attitudes to money, and budgeting in the media. General savings and saving enough for pensions, retirement and longer life have been in the spotlight in particular. Last year some studies reported that up to a quarter of people in the UK have no savings at all with more than half wishing they could save cash.
Enter the new micro-savings platforms. These products are designed to help you saving by saving in small regular amounts that should add up over time, but not be so much that they disrupt your budgeting. There are many, I’ve tried a few over last few months. Let’s go through some of them.
Plum & Cleo – Micro savings and money tips chatbots with automated savings but based on the Facebook Messenger platform
Both these players’ have a proposition about using AI to help you manage your money. They sweep your account (once you’ve told it your details) and then automatically takes money money out and places it in to a savings account for you. They have a conversational UI, supposedly giving you hints and tips which you can access using Facebook Messenger.
I found the tone of some of them quite patronising, and maybe a bit juvenile? But perhaps that’s because I don’t like being told what to do with my money. Other people might find it helpful. But my biggest issue, and the reason I didn’t save any money, is that they don’t have the overall picture of my spending – if they can’t see that all of my spending is on my credit card and that ring fence a lot of my money for buffer accounts and emergency savings. And I keep a fair amount in my current account because I earn interest on it – the apps think I’m loaded! I’m not, it’s just buffer money, but they would scrape lots out of the account as I’d left it in there. I also think having Facebook near my finances makes me uncomfortable – again, a personal thing.
Chip – Dedicated app for automated savings
Like Plum and Cleo, Chip is a conversational UI complete with GIFs. Unlike Plum and Cleo this was app-based from the off. Just like the above it sweeps your account, guesses how much to take and then saves it for you. I liked it for a while, but it used to send me too many push notifications and it would give me same issues by sweeping too much because of the state of my current account. They also used to do a scheme where you could refer people for a better interest rate which was nice while it lasted.
They’ve also just opened their new community platform, just like Monzo, just like Emma which have similar features but have more of a focus on general financial management. Are there lots of people members of all of these communities or do they just expect hard core fans? Sounds like a lot of effort to part of multiple. And a few too many emojis for me.
I have used Lloyds ’Save the Change’ round up payments that go automatically in to a savings account, this isn’t new – but if you use your credit card for payments it’s quite slow to build.
Moneybox – Rounded up transactions that are moved to an investment account
This is a bit different as it’s straight to investments, not a savings account. My Moneybox account is attached to my credit card for round ups, but not directly. It was a bit strange initially – Moneybox reads my credit card transactions but only has debiting permissions for my current account. So it calculates round up amounts from my credit card and then takes the total from my current account. It’s nice to have someone doing this in the background especially as I’m not planning to touch it for a while. The app is quite nice, but the animations feel quite child-like. But getting back to the money, your odds at beating inflation are much better with investing, especially over the long term. Do read the small print and make sure you understand investing before embarking on that. There are different types of investment account, Lifetime ISA, Stocks and Shares ISA, or General Investment Account. Settlement also takes longer with investments than cash – something to bear in mind.
There are lots of different people after your money – it pays to do a bit of research when working out where to put it.