Finder expert rating
Nutmeg is an online and app-based investment platform, and it’s the biggest “digital wealth manager” brand in the UK. As a “robo-advisor”, Nutmeg learns a bit about you to then choose investments that are suited to your goals and investment knowledge, and it builds a portfolio for you.
You can choose to invest in its general investment account, or use your annual individual savings account (ISA) allowance.
Nutmeg was founded in 2011 and is the largest digital wealth manager in the UK. It manages over £2 billion (sometimes called “assets under management” or “AUM”) for more than 100,000 customers.
“Hundreds of years ago, nutmeg was incredibly rare and it was the preserve of only the wealthy. Nowadays you can pick up nutmeg in the supermarket – everybody’s got access to it. And it’s the same with what we’re trying to do as a business. We’re trying to bring high quality investment and wealth management to everybody,” Nutmeg CEO Neil Alexander told Finder.
Nutmeg is risk-based. This means that before you open an account with Nutmeg, you’re asked to do a quiz. The quiz is designed to gauge where you stand on risk, how long you’re looking to invest for and your view on socially responsible or ethical investing. It uses this information to align your portfolio to your investment goals and how much risk you can take on. The final choice is ultimately up to you.
Nutmeg invests for you, using your money. You can make automatic monthly deposits or fund your account with lump sums.
There are 10 investment portfolios that Nutmeg chooses from based on your risk preferences. It’s measured on a scale from 1 to 10, with 1 having the lowest risk and 10 having the highest risk. 1 is made up of basically all government bonds, and 10 is basically all stocks.
Nutmeg’s fund managers balance these portfolios quarterly (unless you opt for the fixed allocation, which is cheaper at 0.45% instead of 0.75%, but has no manager). They’re also backed by some clever algorithmic help.
Once you’re all set up, you can track how the portfolio is performing on the mobile app or on the desktop web app. The desktop version is better for detail.
Nutmeg offers 5 products:
The main features of Nutmeg’s stocks and shares ISA are:
If you’re not quite ready to take the investment plunge, Nutmeg will allow you to open this account holding only cash first (basically like a normal savings account) and invest it at a later date.
Once you’re feeling ready you can invest it all at once or just drip feed it in month-by-month.
Nutmeg stocks and shares ISA: our review
In general, Nutmeg’s stocks and shares ISA is good if you’re pretty new to the game and not keen on building a DIY portfolio. It’s definitely a daunting process when you’re just getting started, so the mobile app and ease of use makes it really popular with its customers.
If you’re more experienced, you might be suited with another provider that allows you to choose what goes into your portfolio, like Vanguard, Fidelity or IG.
The main features of Nutmeg’s general investment account are:
Same as above, you can also open this account but just hold it as cash to begin with.
This account would probably only be worth using if you’d already used up you stocks and shares ISA allowance.
Lifetime ISAs are a government-backed account which allows you to get a 25% government bonus. That means for every £4 you invest, get a £1 bonus – up to £1,000 a year.
The money can be used for your first home (up to a value of £450,000) or you can withdraw the money tax-free after you turn 60.
The other big benefit of Lifetime ISAs is the tax saving. You can contribute up to £4,000 a year without paying any tax on future returns.
Read our guide to Lifetime ISAs to find out more, as they’re not necessarily right for everybody.
The main features of Nutmeg’s Lifetime ISA are:
The main features of Nutmeg’s pension are:
To open a Nutmeg personal pension you have to fit a few criteria:
To pay into your Nutmeg pension you’ve got three options:
The main features of Nutmeg’s Junior ISA are:
You’ll need to answer a few questions about yourself, risk assessment, personal details etc. before you can open the Junior ISA.
Annual ETFs with Nutmeg cost 0.17% for fixed allocation investing, 0.19% for fully managed investing, and 0.33% for the socially conscious investing, which is pretty high. Nutmeg then also estimates the average market spread to be 0.07%.
|Investment value||Fixed allocation||Fully managed||Socially responsible managed|
|Nutmeg fee on up to £100,000||0.45%||0.75%||0.75%|
|Nutmeg fee beyond £100,000||0.25%||0.35%||0.35%|
|Investment fund costs||Avg 0.17%||Avg 0.19%||Avg 0.32%|
|Effect of market spread||Avg 0.06%||Avg 0.06%||Avg 0.06%|
First things first, Nutmeg will ask you to choose an account type to start with. (You can check out what those are in a bit more detail below).
Then, you’ll be asked questions to find out about what sort of risks you’re willing to take and how you feel about social and environmental issues related to investing.
You enter your starting amount, and how much you want to contribute each month.
Before you’re ready to create an account and set up your payment details, Nutmeg will show you a rough projection of how much it expects your portfolio to be worth after your given time period.
In this example, we chose a time frame of 20 years, a starting amount of £2,000 and £300 invested each month for that time.
Nutmeg predicts that this portfolio would be worth around £118,000 by 2040.
This depends on how much risk you’re willing to take.
Nutmeg’s riskiest portfolios will be invested in almost 100% equities (stocks and shares), and with an emphasis on US, UK, Asian (China and Japan) and European markets.
Nutmeg’s more cautious portfolios invest more in bonds such as UK Government Gilts.
Click show more to see the allocations of investments Nutmeg makes for a medium risk profile. (This is at the time of writing, so their allocations will likely have been adjusted by the time you read this. It’s just an indication).
|iShares FTSE 100||18.9%|
|Vanguard FTSE 250||4.0%|
|iShares S&P 500 GBP-hedged||9.5%|
|db x-trackers MSCI USA||6.2%|
|iShares MSCI USA Small Cap||3.1%|
|UBS MSCI Canada GBP-hedged||1.2%|
|db x-trackers MSCI Japan GBP-hedged||1.6%|
|Vanguard FTSE Japan||1.2%|
|iShares MSCI Japan Small Cap||0.5%|
|iShares Core MSCI Pacific Ex Japan||1.4%|
|db x-trackers MSCI EMU GBP-hedged||2.5%|
|UBS MSCI Switzerland 20/35 GBP-hedged||0.6%|
|Vanguard FTSE Developed Europe ex UK||2.5%|
|iShares MSCI EMU Small Cap||0.6%|
|iShares Core MSCI Emerging Markets IMI||3.6%|
|Lyxor FTSE Actuaries UK Gilts||24.7%|
|iShares Core GBP Corporate Bond||9.4%|
|UBS Emerging Markets GBP-hedged||3.3%|
|PIMCO Short-Term High Yield GBP-hedged||4.9%|
Nutmeg has three investment styles to choose from:
All of Nutmeg’s portfolios are diversified. This simply means your money is invested in lots of things – different assets, countries, industry and sectors.
The benefit of this is that the risk is spread. If one of your investments is doing badly, your overall portfolio will be less affected. Not only does diversification spread risk, it spreads the opportunity for things to perform well and bring you higher returns.
If you’re looking through Nutmeg’s website you’re going to read a lot about ETFs.
Nutmeg prefers to use exchange-traded funds (ETFs) when building portfolios. In short, this is because ETFs are easy to trade, low cost, and track the movement of markets with a good level of accuracy.
ETFs hold assets (like stocks and bonds) and usually track an index like the FTSE 100 or the Dow Jones.
You can find out more in our in depth ETF guide.
If you’re wondering whether Nutmeg is a good investment, below you can see the returns for each of Nutmeg’s 10 risk portfolios, either over the past five years, or the eight years since Nutmeg started investing in 2012.
The “competitors” data is based on data published by the Asset Risk Consultants (ARC). The data includes results from providers such as Barclays, Coutts, JP Morgan and others.
|Portfolio||Nutmeg over 5 years||Competitor over 5 years||Nutmeg over 8 years||Competitor over 8 years|
|1 (least risk)||0.9%||2.6%||7.1%||3.8%|
|10 (most risk)||42.7%||38.8%||84.8%||75.1%|
Yes. Nutmeg is regulated by the Financial Conduct Authority (FCA) and by the Financial Services Compensation Scheme (FSCS). So if Nutmeg goes bust, you will get back up to £85,000 of your money. (Although your money is still at risk when you invest. You can’t claim back money if your investment pot goes down!)
Nutmeg also keeps your investments in a separate account for added security, and will never lend your assets to third parties. The separate account is managed by Nutmeg’s “custodian bank”, which is State Street – one of the world’s biggest custodians.
The Nutmeg app is super clear and easy to use. We couldn’t find anything to complain about here. You can manage everything from your pocket, and the web browser is well-made too.
There are several ways to get in touch with Nutmeg:
Nutmeg has mostly positive reviews from customers across the board, with 4-5 stars out of 5 on customer review sites. It’s rated as “Great” on Trustpilot, based on more than 700 reviews.
Customers seem to love how easy Nutmeg is to use and how it cuts through industry jargon. The negative reviews are focused more on customer service, saying the company can be slow to respond to emails.
We carried out a customer satisfaction survey in July 2020.
Nutmeg customers find Nutmeg to be knowledgeable in the field and find the interface to be pleasant and easy to use. Those who needed to contact customer service thought that their problems were dealt with well and professionally.
Some users commented that the charges are quite high compared with other investing platforms.
The main appeal with Nutmeg is its simplicity. Nutmeg does what many investment platforms do. It takes away all the hassle investing and makes it clear. You can manage it all from your phone or laptop, and the flexibility is there for you to tweak your strategy or withdraw funds pretty much whenever you want.
For those out there who love the detail when it comes to investing, you may realise that there are ways to do what Nutmeg does yourself, for cheaper. Likewise, if you’re looking to stock pick – you can’t do that here as Nutmeg doesn’t offer it.
Nutmeg does what it says on the tin. It offers a credible way to invest in your future, with diverse and global access. The charges are relatively low, although not the lowest, and the app and desktop experience are clear and make you feel informed. The biggest hurdle for many investors is getting started, and Nutmeg is as good a choice as any for getting going.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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