Savings and Investment Apps for Newbie Investors

By May 11, 2018For Talent

Are you considering saving and dabbling in the world of investment to fulfil your lifelong aspirations, but simply don’t know where to start?

You’re not alone.

According to the recent Millennial Money Survey, carried out by investment firms F&C and BMO, buying a property, getting married and having a family are top ambitions for 10m (64%) of UK millennials, yet most of them (approximately 8m) have failed to start any kind of long-term savings or investment plan.

Despite a desire to build a healthy nest egg, 18-35 year olds say that paying essential bills (61%), lack of earnings (41%) and debt (39%) are preventing them from saving money regularly.

According to BMO’s Head of Marketing and Direct, Ross Duncton, while some UK Millennials have debt, it’s clear that the majority are far from a ‘reckless’ generation.

“In reality, most are sensible spenders who want to take more control over their money, despite a lack of formal financial education,” says Duncton. He believes that many Millennials only need to take a ‘small leap’ to brighten their financial futures: “Many only need to shift their money mindset slightly to get their money working harder, and in turn help them achieve their ambitions.”

Several savvy finance firms have already created smartphone savings and investment apps to help Millennials achieve their financial goals.

Automated savings apps

Those of you that haven’t got a clue about where you stand financially and unsure of how much you can afford to stash away each month, will find savings apps helpful. Both the Squirrel and Chip apps, for example, automatically siphon money away into your savings account, helping to save money that you would otherwise have spent.

To use Squirrel your salary gets paid into a separate account (run by Barclays), which is then released gradually into your current account so you don’t spend it all at once. It handles your bills, gives you a weekly allowance (set by you) and holds some money back to save each month. This disciplinarian approach is great for those of you that struggle to stay out of your overdraft. Squirrel charges £3.99 a month for this service, however, it is currently offering a free three month trial for new customers.

The Chip app is a free alternative and is compatible with most UK bank accounts. Once you connect it to your online banking, it gathers information about your spending and uses that data to work out how much you can afford to save. Then it transfers an affordable amount into a separate savings account every few days.

Spare change investment apps

For those of you prepared to take a bit more of a risk it’s never been easier or cheaper to dabble in the world of stocks and shares. If you have a few quid to spare but aren’t sure where to start, then spare change investment apps like the Moneybox app are worth checking out.

Established by former Fund Manager Ben Stanway and Wowcher Founder Charlie Mortimer, the Moneybox app is designed to introduce younger generations to the concept of investing for as little as £1. It works similar to US-based spare change apps like Stash and Acorns, allowing users to round-up everyday card transactions and deposit the difference into an ISA/investment plan.

So, for example, if you buy a coffee for £2.40, you could round this up to £3 and invest the difference. Investment portfolios are also provided and you can customise your investment choices depending on your preferences or projected levels of risk and return.

However, if you prefer to test the waters before making the investment leap, then the eToro,  Invstr, or HL Live apps are worth considering.

Playing safe

The Invstr app will allow you to practice making investments in a fun and safe way by playing the Investment Game, and when you are ready to invest, you can start investing from just $1. The eToro app actually allows you to create a practice portfolio before taking the plunge. Investors can trade stocks, commodities and currencies in a simple, cost-effective way, as well as follow and copy the trades of popular investors. Hargreaves Lansdown’s HL Live app also enables newbies to make their first investment virtually through watch lists that help them get accustomed to tracking investment performance before trading for real.

Investment apps are a great learning tool for first time investors. According to Hargreaves Lansdown, the most common use for investment apps is checking the value of investments. With HL Live, investors can view information about a fund or share, and look at past performance using interactive charts and performance tables.

investment appsThe beauty of these apps is they allow you to start small, relatively cheaply. Once you get started, you can gradually boost your savings and watch the money add up. Although you don’t need a huge amount of money to start investing, it’s worth bearing in mind that there are monthly or yearly charges involved, which will vary from app to app and amount invested.

It’s also important to be aware that with investment apps you can make losses as well as gains. So if you simply aren’t prepared to make any losses yet, it’s advisable to stick to savings apps linked to a traditional deposit savings account.

Before deciding which app to go for, it’s vital to do your homework and fully understand the product. Most of these apps will require your banking details in order to save and invest on your behalf, so make sure that the app you go for is regulated by the appropriate finance body, such as the Financial Conduct Authority and that it offers adequate data protection security. It’s also worth checking that any accrued funds or savings are protected by the Financial Services Compensation Scheme should the firm behind the app ever go belly up.

About the author: 

Pepi Sappal is a freelance content creator and journalist, writing and editing for a variety of online media and print publications, including The Wall St Journal, Dow Jones, Trader Monthly, TR Business, TR Unblocked, People Management, Personnel Today, The Guardian, Money Market UK (Mercado de Dinero), WGSN and the Edge Magazine. She specialises in business, management, property, finance, HR, diversity and lifestyle issues. 

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