Moneybox Review

Moneybox is an app that helps you save and invest effortlessly and is great for saving for a mortgage. What else can it do? Michael Barton gives us the details, pros and cons in this Moneybox review.

Have you ever thought how cool it would be to have a cash box to save your loose change into, and then that cash box put your money to work for you? In a nutshell, that’s the idea behind Moneybox.

Simple ideas are often the best, aren’t they? Moneybox uses rounding up (a great savings strategy available from many banks today) to save your pennies, and then invest them into funds that match your investment profile. You don’t have to do anything more than create an account and link your payment cards to get started.

Is the Moneybox app right for you?

Let’s dive into the nuts and bolts to help you decide.

What Is Moneybox?

Moneybox allows you to invest from as little as £1, without thinking about it! You simply link your bank account through the app. It then rounds up all your purchases to the nearest £1. The difference between your spending and the rounded-up amount is then automatically transferred into a Moneybox savings account.

You select whether you wish your savings to remain in the savings account or be invested into one of three investment plans. Each of these is designed to cater for a different investment profile.

You can also make one-off investments, as well as regular weekly or monthly contributions. You can invest in several different investment wrappers, which is great to help you achieve your long-term financial goals. These include:

• Stocks and shares ISAs
• Junior ISAs
• Lifetime ISAs
• Personal pensions
• General investment account

If you wish to consider transferring your existing pension funds into a single pension fund with Moneybox, they’ll do the donkey work of tracking down your old, existing pensions. (You may not even realise you have any – when I consolidated all my private/company pensions into one, my advisor found £55k I didn’t know I was entitled to.)

For your savings, you can select from a range of accounts, which includes Simple Saver (an instant access account) through to a 120-day Notice Savings Account, which pays a higher rate of interest, but doesn’t allow early access to your savings.

Moneybox Mortgages

Moneybox also acts as a mortgage advisor and broker. A great and natural addition to its savings and investment services, and exclusive to Moneybox account users.

They have an easy-to-use calculator on their website that indicates how much you could borrow based on the size of your deposit and your annual income and monthly outgoings. Whether a first-time buyer, new mortgage, or remortgage, you do everything through Moneybox.

Its mortgage advisors search for available mortgages across more than 90 providers, and you complete the application form online.

How Moneybox Invests for You

You are offered a choice of investment portfolios:

• Cautious
• Balanced
• Adventurous

Which is right for you depends on a questionnaire you’ll need to fill in when you apply for a Moneybox account and the style of investing you wish to do. You must remember that this is an execution-only investment – the choice of investment risk is yours to make. You’ll need to read the description of each investment portfolio carefully before making your selection. To give you a brief guide:

As a cautious investor, you’re aware that your investment carries some risk, but your capacity or willingness to take a loss on your investment is small.

As an adventurous investor, you want the potential for your investment to grow rapidly, but understand that this involves a much higher level of risk to your capital. You accept that the value of your investment may fluctuate greatly, and even day-to-day.

As a balanced investor, you sit in the middle of these two extremes. You’re prepared for fluctuations in the value of your investments, though accept that this value may fluctuate more than lower-risk investments over the lifetime of your investment.

To achieve the right mix of funds to suit each investment profile, Moneybox invests across a selection of tracker funds with different asset allocations. You can also choose to invest in socially responsible funds.

The funds that you can invest in through Moneybox are selected on fund performance over the previous year, how well it tracks its underlying index, cost, and the reputation of the fund manager. Funds are reviewed annually under these criteria, and adjusted if needed.

If you are a more experienced investor and desire more control over your investments, then you can choose to customise your investment allocations. If you are investing in a Moneybox Stocks and Shares ISA, you can also choose to invest in US stocks.

Starting Pension Funds

Anyone who has transferred their lost pensions will tell you how challenging it can be to do so. Moneybox makes this process easy by tracking down these pensions for you. This is crucial if you hold one of the estimated 1.6 million lost workplace pension pots worth more around £13,000 each.

While the decision whether to amalgamate pensions isn’t always an easy one to make, it does make managing your retirement planning much easier. There are four pension funds available to choose from when you first invest in a Moneybox pension account:

• BlackRock’s Lifepath tailors your risk as you move toward retirement, reducing risk the closer you get.
• Fidelity’s Index World Fund offers low-cost investment into global companies.
• HSBC’s Islamic Global Shares fund follows the principles of Islamic finance, excluding industries like alcohol and tobacco.
• Global Shares ESG fund invests in companies that lead the way in environmental, social, and governance factors.

Moneybox Savings Accounts

When you save money with Moneybox, you’ll benefit from protection offered under the Financial Services Compensations Scheme (FSCS), which guarantees savings or investments up to £85,000 should the financial company go bust.

At the time of writing this review, you can earn between 3% (Simple Saver account) and 3.98% AER (120-day Notice account). The minimum amount required to open any of Moneybox’s savings accounts is £1.

Notice accounts are great for saving for specific events (a birthday, retirement holiday, or wedding, perhaps), but not suitable for emergency cash savings.

Moneybox investment options

Moneybox investment options allow you to start investing with as little as £1. You select your investment options, including if you are making regular contributions, and then forget about it! Your contributions are collected by direct debit. The different types of investment accounts are:

Stocks & Shares ISA

You can invest up to £20,000 in any tax year into an ISA. Your investments grow free of capital gains and income tax. You can invest in Moneybox’s full range of tracker funds, ETFs, and individual US stocks. You’ll also earn 3.25% AER on cash that is held in your ISA account before investing.

General Investment Account

If you have used your ISA allowance, then a General Investment Account may be right for you. You can invest in Moneybox’s range of portfolios and funds, as well as US stocks.

Pensions

If your financial goal is to create a fund from which you can draw income in retirement (as well as benefit from a tax-free cash lump sum), Moneybox offers a Self-Invested Personal Pension product. You can transfer existing pensions into this, and make regular or one-off contributions (which will benefit from tax efficiency, increasing your contributions by 25%).

Lifetime ISA

If you are saving toward your first home, a Lifetime ISA will help you save your deposit faster. You can invest in a Cash Lifetime ISA or an Investment Lifetime ISA, and gain from a 25% government bonus on your yearly savings (up to £4,000).

If you withdraw the money to use for anything other than buying a home (or retirement), you’ll be penalised by 25%.

Junior ISA

You can also invest up to £9,000 a year into a Junior Stocks & Shares ISA. Capital gains and income within the ISA will be tax-free, and your child will only be able to access the ISA when they are 18. This doesn’t affect your personal ISA allowance.

How Rounding Up & Deposits Work in Moneybox

Rounding up of your spending is one of the many neat features of the Moneybox app. All you need to do is to link your bank accounts to Moneybox.

This is an easy process that you do from Moneybox and your own bank’s app on your mobile phone. If you don’t have your bank’s app on your phone, you’ll need to manually enter your banking details. Once connected, set up a direct debit from your bank account to your Moneybox account and you’re away! You can also round up credit card spending, and manually alter round-ups if you wish.

Your roundup total is combined with any other deposits you make into Moneybox weekly, on Wednesday. This total is then deposited into your investment products early the following week. If you have several Moneybox investment products, you can choose to spread the investment between them.

Moneybox will link to most major banking groups in the UK.

Great for Beginners & Poor Savers

This saving and investing system is ideal if you are either poor at saving and/or new to investing, or both. It takes the hard work out of saving. Rounding up is even better than putting loose change in a jar. It’s done automatically, there’s no temptation to dip into your pot, and you don’t need to then take your coins to deposit into a savings or investment account.

One of the most appealing attributes of rounding up spending and setting aside those pennies is that you save without knowing. Those pennies can quickly mount up, too. Which is where the automatic switch to your investment account is perfect. Set and forget. Your money can start to work harder for you in just a few taps on the app – then you’re on autopilot.

We also like the Learn Hub – Moneybox’s answer to online tutorials to help you get to grips with everything you need to know to make best use of the app. This includes tips and tricks, market news and updates, and video tutorials.

As well as ease of investing, you’ll benefit from a diversified portfolio of funds selected from some of the world’s best recognised and best-performing fund management companies. These include:

• Fidelity
• iShares
• Legal & General
• HSBC
• Royal London

You can also select to invest ethically in ESG funds that invest in companies with better environmental, social, and governance (ESG) practices from global and emerging markets. Such companies operate to:

• Minimise their impact on the environment, reducing pollution, waste, and carbon footprints
• Deliver better working conditions, including providing equal opportunities to all employees
• Create a fair workplace environment, benefitting from diversity across all levels of seniority

What About Customer Support?

Being a financial app, you might expect support to be provided online. Unlike many other apps, you won’t be disappointed. Its support pages provide the answers to FAQs under 16 different categories. These cover everything you need to know, from getting started to detail about investment products, to making deposits and withdrawals.

If you cannot find what you are seeking, its support team is available seven days a week from 9am to 5:30pm. For less urgent queries, Moneybox also handles questions and concerns by email.

How Much Will Moneybox Cost You?

One of the drawbacks of Moneybox is the complexity of its charges. Here is how these add up:

• First, you’ll be paying a monthly subscription of £1 (irrespective of how many investment accounts you hold with Moneybox). For the app and all its features, this is great value.
• You’ll also be charged an annual platform fee of 0.45% of the value of your investments. This is calculated daily, and charged monthly. This fee is taken from your largest investment holding by selling units in the funds you own.
• On top of these two charges, you will also incur annual fund management fees levied by the managers of the funds in which you are invested. These fees range from around 0.12% to 0.58% (Except for ESG funds which may have higher annual management charges).
• If investing in US stocks, you will also be charged 0.45% currency conversion fees on the value of the trade. However, you won’t be charged commission for investing in US stocks.

As an illustrative example of how these fees add up, let’s consider you have invested £5,000 in a fund with an annual management charge of 0.25%:

• Annual subscription of £1 per month = £12
• Annual platform fee of 0.45% = £22.50
• Annual fund management charge of 0.25% = £12.50
• Total charges levied of £47.00 = 0.94%

The fees charged on pension funds are similar, though for balances over £100,000 the platform fee is reduced to 0.15%.

How Safe Is Moneybox?

When you save or invest, you should always consider how safe your money is. You don’t want fraudulent activity or poor business management to take a chunk from your hard-earned money.

Moneybox is regulated by the Financial Conduct Authority (FCA), which means they must follow the rules that the largest banking and financial institutions in the UK are governed by.

The money you hold with Moneybox is protected by the Financial Services Compensation Scheme (FSCS), which means the first £85,000 is safe should Moneybox go bust. Your investments are also held by the fund managers and not Moneybox directly – which means you have an extra level of security.

In this day and age of digital banking, the potential for cyberattack may also concern you. Moneybox has you covered here, too. Your details are secured by Open Banking technology, and logins are not stored on their system. All traffic is encrypted.

Is It Easy to Set Up a Moneybox Account?

The Moneybox app is only available if you have a mobile phone. You’ll need to be a UK resident and be at least 18 years old. No joint accounts are possible.

After installing the app, you can proceed to open your account. To do so, you’ll need:

• Your bank account details
• Your National Insurance number (though this isn’t needed for a General Investment Account)
• Your online banking and credit card accounts if you wish to use roundups to save and invest

The sign-up process is easy to follow, and takes only a couple of minutes.

Once logged into the app, you’ll find that it is easy to navigate. All the key information you need to access is readily available and easy to read. The app itself has won several awards, including:

• Best Money App in the Consumer Investment Awards 2019
• Best for Beginners in the Consumer Investment Awards 2019
• Winner of Moneyfacts Consumer 2019
• 2019 Moneybox Digital Wealth Manager of the Year 2019

What Do Customers Think of Moneybox?

It’s always worth noting what other users think of the services and products you are considering. Here are a few of the latest reviews posted on Trustpilot:

Fantastic All Round Service (25/06/23) – Brilliant service from Moneybox from initial contact through to completion of the purchase! Couldn’t be faulted! No question too much to ask and always received a prompt response to keep everything moving. Mortgage broker Samantha went out of her way to ensure we were content with everything before proceeding and Vicky our case handler was always checking in to make sure everything was going smoothly. Very knowledgeable team and made what could have been a very stressful time incredibly easy. Would highly recommend ─ thanks to all at Moneybox.

Thank you Moneybox, fantastic app & mortgage support (26/06/23) – I have been in my first home for nearly a month now! Moneybox has been a great tool that I’ve used to increase my savings to save for a house deposit ─ I used the LISA and 95-day notice account. Think a fantastic way to continue to save or start your savings journey. Ellis my mortgage broker and Imogen my case manager were both fantastic, could not fault them! They made the process a lot less stressful. Big thank you to them.

10/10 (12/06/23) – The user experience of their app is excellent, as is their customer service. Everything I wanted to achieve, felt effortless, e.g. opening a LISA, transferring pensions, advice on mortgages. That is a rarity in the world of personal finances!

A fantastic company and service (01/03/23) – A fantastic company and service. Does exactly what it’s supposed to in making saving easy and investing understandable. I set mine up to use the Lifetime ISA to save for a house deposit. We’ve now moved in and the whole process has been seamless in withdrawing the funds, so I can’t recommend them enough. Fees are reasonable, and all queries are answered in good time.

The best mortgage broker around! (25/02/23) – Moneybox have been great and given really good advice to help the whole process run smoothly. They’ve given regular updates and ran queries really quickly. Charleigh, our mortgage case manager, has been the best! So friendly and great at her job, she’s made us feel relaxed and informed throughout the whole process. David was also a great mortgage advisor and really knowledgeable. We felt that they really cared so we have recommended Moneybox to everyone we know.

Alternatives to Moneybox

Moneybox has a 4.6/5-star rating on Trustpilot. However, there are other alternatives available. Here’s a brief rundown of the top three alternatives:

Nutmeg

You’ll need to complete a risk-attitude questionnaire to open an account with Nutmeg, and you can also set financial goals on their system. It’s more focused on investing, with a wider range of investment portfolios available.

While its fixed allocation fees are 0.45%, its average fund annual management charge is 0.21%. As with Moneybox, you can invest in several different investment wrappers, including SIPPs, Lifetime ISAs, ISAs, Junior ISAs, and General Investment Accounts.

Plum

Plum is closer to Moneybox than Nutmeg, as it is equally focused on saving as it is investing. It’s also a good budgeting tool, and helps to build your savings automatically.

Interest rates are around the same as you can achieve on the Moneybox instant Simple Saver. Plum offers several levels of account, with costs up to £9.99 per month.

Moneyfarm

Like Nutmeg, Moneyfarm leans toward investing rather than saving. It’s one of the new breed of robo investors (like Wealthify), and will invest your money in a diversified portfolio of funds. There is no option for a Lifetime ISA.

You’ll need a minimum of £500 to open a Moneyfarm account, with annual management charges ranging of up to 0.75% and underlying fund management charges averaging 0.21%.

The Bottom Line

Moneybox is a good introductory app for beginner investors. It’s great to help you save without effort, too. You’ll benefit from a highly user-friendly app, and set-and-forget functionality. If you do need to seek help, Moneybox’s support is very efficient.

You’ll need to be aware that investing with smaller amounts does mean that fund charges have a bigger effect, and it can take longer to get your investment motoring.

It’s a great app to help get you started with saving and investing, though a bugbear for me is that its functions cannot be accessed on a desktop. Perhaps its best qualities are for Lifetime ISAs and mortgage broking. Here it really excels, and customer reviews reflect this.