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Plum pension review

Plum's clever micro-saving algorithm makes it easy to drip-feed your retirement savings. But is its personal pension worth having overall?

Having started life in the UK as a micro-saving Facebook chatbot back in 2017, Fintech challenger Plum now aims to help you make your money go further via its Android or iOS app. In 2021, Plum dipped its first toe into the pension market with the launch of the Plum SIPP.

What is Plum?

Plum’s smart software analyses and understands patterns in your income and spending habits to assess how much you can realistically afford to save. Once its algorithms calculate a suitable amount to be put aside each week, this amount is automatically transferred via direct debit into your Plum account.

You can save into an easy access, interest-paying account, a stocks and shares ISA or general investment account, or a personal pension account. If you want, you can use Plum’s “splitter” function to automatically divide your automatic deposits between accounts.

It’s also possible to manually transfer ad hoc payments into your Plum account from a linked bank account.

How does Plum’s pension work?

Plum purports to offer a type of personal pension known as a self-invested personal pension (or SIPP, for short). The main difference between a SIPP and a regular personal pension is usually the amount of control you have over your investments.

  • With a regular personal pension, you usually tell the pension provider the kind of investment portfolio you want for your pension (an ethical portfolio, or one that includes only less risky investments, for example). The provider then manages your pension in line with this broad strategy.
  • In contrast, with most SIPPs, you build your own portfolio from a range of funds, stocks and other assets. The selection will vary depending on the provider. This gives you more control, but also more responsibility for taking an active role in your account management and investment performance. Typically, you’ll be able to choose from a much wider and more sophisticated range of investments than with standard personal pension schemes.

All of which makes Plum’s SIPP a bit of an oddball. Despite claiming to offer a SIPP, in practice when you take out a Plum pension (as of June 2022) you have to choose just one type of investment fund for your money. There are currently only a handful of fund types to choose from. Once you’ve picked the fund type, Plum automatically invests your pension contributions in line with this choice. So, unlike what you’d usually expect from a SIPP, you can just (according to Plum) “sit back” and not think about your pension at all.

When we asked Plum about this, it told us: “While most SIPP providers would let you pick a portfolio type…or on the contrary a very wide selection of funds, we aim to give our customers the ability to have a say in their portfolio, but from a small hand-picked selection of funds we believe are good for them (or society) in the long run.”

It also told us it plans to implement a feature whereby customers are able to hold multiple funds in their SIPP later in 2022.

As with any workplace or personal pension, with Plum’s SIPP you benefit from tax relief on pension contributions up to your pension annual allowance.

What pension fund types does Plum offer?

As of June 2022, when you open a Plum pension you are asked to choose from one of the following three fund types. Your pension contributions will be automatically invested in line with your choice.

Plum’s pension funds

Investment fund typeDetailsPlum product provider feeFund management feeFund provider
Target Retirement Date Fund Adjusts the risk level of your investments the closer you get to retirement. It gradually moves your pension pot into less risky funds over time, to take account of the shorter time period to weather any market downturns. 0.45%0.24%Vanguard
Global EquityInvests in shares in medium and large-sized companies from around the world.0.45%0.21%Legal and General
Future PlanetDesigned to appeal to those that prioritise sustainable investing, this fund invests in shares in companies that meet positive carbon and environmental criteria.0.45%0.30%Legal and General

What fees does Plum charge?

You’ll need to pay two types of fee to hold a Plum SIPP:

  • An annual product provider fee, payable to Plum, of 0.45% of the value of your pension.
  • A fund management fee, payable to the manager of the funds you choose for your SIPP. This is usually also a percentage of the value of your pension. As of June 2022, fees range from 0.21% to 0.3%.

How do I apply for a Plum pension account?

The first part is to download the Plum app from either the Apple App Store or Google Play store. You’ll need to provide a few personal details (including email address, name, nationality, age and address) and link your most active current account to Plum.

Then, to set up a SIPP, you’ll need to follow these steps:

  • Navigate to the part of the app to create a new pension plan
  • Choose a pension investment fund
  • Add any extra personal details, including your national insurance number
  • Read the legal stuff and hit continue.

How do I pay into my Plum pension?

There are two main ways to contribute to your Plum pension:

  • Manually, by transferring money from another Plum “pocket” (its easy-access savings account, for example) or directly from your linked bank account.
  • Set up some or all of your Plum Auto-deposits (those regular micro-savings that Plum’s algorithm automatically takes from your bank account) to go into your SIPP.

Can I transfer another pension to Plum?

Zoe Stabler

Finder expert Zoe Stabler answers

Probably, depending on the type of pension. You should be able to transfer in money from most defined contribution pension schemes. Plum doesn’t charge any transfer-in fees. Watch out, though, for any exit fees the other scheme might apply that could eliminate the benefits of switching.

To transfer a pension, you’ll need to let Plum know the details of your existing pension provider (or providers), review the legal documents and sign a transfer request. You can do all this within the app. Plum will typically be able to handle the rest.

Plum currently doesn’t accept transfers in from defined benefit workplace pensions, or from any other scheme that provides safeguarded benefits (such as a guaranteed annuity rate). And you can’t transfer any pension that you’re already drawing an income from.

Who should consider using Plum?

Typically, we at Finder tend to mainly recommend SIPPs for more experienced investors. That’s because of the higher risks involved in choosing and controlling your own investments, as is the case with most SIPPs.

But Plum’s SIPP is, at the moment at least, pretty straightforward and involves little to no complex decision making or active account management. So, it’s arguably a better choice for those new to investing and that don’t want to play an active role in managing their pension.

If you’re a more experienced investor looking for a wider and more sophisticated range of investments to manage yourself, head over to our SIPP comparison page to see your options.

Plum customer reviews

You can read reviews of Plum overall (rather than just as a SIPP provider) on the Trustpilot website.

And most customers rate it pretty highly. As of June 2022 it has an overall score of 4.5 stars out of 5, resulting in an “Excellent” verdict from Trustpilot. Those that are full of praise love the ease of use and simple, automated savings, with comments that you don’t even notice the payments going out of your account.

It’s not perfect though. 9% of customers gave Plum a “bad” rating, with a handful of criticisms about things like slow fund transfers or problems setting up an account in the first place.

Does Plum have an app?

Yes. In fact, you have to download the Plum app (available for Apple or Android phones) to use Plum.

As of June 2022, the Plum app gets decent ratings on the Apple App store (4.7 out of 5) and Google Play store (4.6 out of 5), though we spotted a couple of complaints on the Google Play store about the app’s stability.

Pros and cons of Plum

Pros

  • Allows you to micro-save into a pension – good for those that are just getting started
  • Easy to set up and minimal effort to manage your pension
  • Can easily split your savings between your SIPP and other savings “pockets”.

Cons

  • Relatively limited range of pension portfolio options compared to other personal pension providers
  • Despite its title, pension account is much more basic than we’d usually expect of a SIPP.

Bottom line

With no minimum contribution requirements, Plum’s personal pension could be a good bet for those wanting to kick-start good retirement saving habits without facing a short-term financial hit. You can transfer pensions in from many other schemes if you want to, and Plum’s straightforward selection of pension funds could make it an easy option for those new to investing. It may be too simple for experienced investors, though, so if you want close control over your portfolio and a wider range of investment options, you might want to look at alternative SIPP providers.

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