There has been a pretty nifty app available since 2016 called Moneybox. It isn’t exclusively available for Millennials but it will be particularly of interest to people in this age demographic.
So, what is Moneybox?
Moneybox is a savings and investing app that aims to make both a seamless part of everyday life. With as little as £1, you can invest in companies like Amazon, Netflix, Apple, Nintendo, Unilever and Disney via Moneybox’s tracker funds.
It takes the whole investment process out of your hands too. All you have to do is spend and the app will round up your purchases to the nearest pound and invest the spare change, or you can deposit lump sums weekly or monthly yourself.
By connecting a spending card to the Moneybox app, you can set up an investment account from your mobile phone in a couple of minutes. This gives those with little or no investment experience an easy starting point.
How does it work?
The streamlined smartphone app gives everyone the opportunity to invest by following a few simple steps:
  • Open an account. To begin you’ll need to open an investment account with Moneybox. You have a range of account options to choose from.
  • Connect a card. You’ll also need to connect a spending card to your Moneybox app.
  • Save as you spend. Moneybox will enable you to round up the spare change from purchases such as your morning coffee or bus fare.
  • Invest your spare change. It can then be invested in thousands of global companies via tracker funds.
  • Top-up your investment budget. You can also contribute to your investment account via one off payments or weekly deposits.
  • Select your starting option. Choose from cautious, balanced or adventurous.
  • Automatic withdrawals. Every Wednesday at midday your money is taken by direct debit and invested.
Moneybox offers a range of investment options including the following;
  • General Investment Account (GIA). This is a standard investment account. You’ll pay taxes on what you earn, but only if you go over your capital gains allowance (£12,000 for tax year 2019/20).
  • Stocks and shares ISA. You can invest up to £20,000 a year and won’t be charged any taxes.
  • Stocks and shares LISA. You can invest up to £4,000 a year tax-free and also get a 25% contribution from the government to either retire or buy your first home. There are quite a few age limitations to be aware of though, so you should familiarise yourself with the rules before you invest.
  • Junior stocks and shares ISA. This is an investment account you can open for your kids. Earnings are tax-free, but money can only be withdrawn by them when they turn 18.
  • Pension. You can move your old pension(s) to Moneybox if you want to. It will allow you to see them all in the app, set your investment strategy and keep track of how much they’re earning. However, Moneybox doesn’t accept a pension you or your employee are currently paying into, or any old pensions that provide guaranteed benefits when you retire.
Moneybox even offers a Socially Responsible Fund and a cashflow savings account.
Before you take the plunge and open an account do make sure you understand its pros and cons listed below.
  • The app is simple, making it easy to save and invest.
  • You could see a greater return than if funds were stored elsewhere.
  • You are able to select a preferred risk level – cautious, balanced or adventurous.
  • Great for individuals with no experience in investing.
  • You can withdraw some, or all, of your money at any time, using the app, as long as that amount has fully settled.
  • Safe and secure, FCA authorised with 256-bit encryption protecting your personal details.
  • If you have online banking, a national insurance number and £1 to spare, it takes a few minutes to invest.
  • Savings account options are also available, including a competitive cash LISA product.
  • Every time you invest, your capital is put at risk.
  • The charges could be an issue for those starting out with small investments as fees could be higher than monthly profits. You might make more money with a high interest current account.
  • It can take time to see any substantial return on savings.
So it’s certainly an app worth considering if you lack the self-discipline to save regularly especially if you are an inexperienced investor and like something that is simple, quick and easy to use.
If alternatively you would prefer to see a financial adviser why not get in touch with my colleagues at Wealth And Tax Management? You know it makes sense.