Each time you fill up your tank, buy some cheese, pay a TV bill…a teeny-little bit of money is added to your app, and it’s quietly settling into your investment fund.
That’s how micro-investing works in a nutshell…
It's a straightforward system, really (a powerful, digital piggy bank). Apps are automating your spending habits, into tiny investment fragments…
This can be a small, regular size. Or whatever’s leftover when purchases round-up to the nearest £…
So in this guide, we cover the best micro-investing apps Britons can choose from on the UK market today.
Table of Contents:
- Best Micro Investing App Services
- 1. Moneybox - UK’s Best ‘Acorns’ Alternative
- 2. Wealthify
- 3. Nutmeg
- 4. Moneyfarm
- Buying Guide
- FAQs
Best Micro Investing App Services (UK) 🇬🇧
Starting small, and investing for the first time? … When crunching your Trading Data, take time to learn your strategy. Adapt to your chosen provider. Use good financial common sense.
1. Moneybox - The Best ‘Acorns’ Alternative UK
Key Features:
- **Auto-Invest Spare Change 🔥
- Good For Beginners
- Auto-Recurring Option
- Start With As Little As £1
- Investment and Savings
- Only £1 Per Month
PROS
CONS
📓 Moneybox Review
Wondering why there are no investment tools in the UK market (i.e. that are explicitly for micro-investments?
The first thing to know is that PayPal invested over £22 million in the Acorns platform back in 2016, and this was only half of the final investment total. (This is probably the largest micro-investment platform in the US.)
PayPal saw strong potential in the explicit ability to “hack” everyday spending habits. Users could syphon-off extra pennies. Then could invest these small investment pools. (E.g. a £2.99 purchase would send the extra penny into your Acorns app.)
The UK micro-investment (MV) market still hasn’t caught up with this boom in micro-investment platforms…so you’ll be hard-pressed to find any apps that are fully structured around the micro-investment model.
(Some of these M.V. companies, such as Robinhood, are still working to get into the European market!)
If you’re reading this guide, there’s a 75% chance that you are aged between 18 and 34. This is the prime millennial age of most of Acorn’s users. And for its service, you’d be charged under a pound per month for accounts. This changes once your account goes over $5000 (roughly £3800).
Acorn has a mobile-only approach and, according to the father and son founders, an impressive track record for outperforming the S&P based on the “risk-adjusted return basis”. In other words, a more aggressive way to go about savings based on compound interest, albeit a small starting capital.
When you use one of these full-fledged MV tools, you should get most of the following out of the box user features:
- ☑️ Portfolio diversification scores - gives you a sense of how much your assets span across industries, asset classes, risk exposure and so on (US app Stash offers this).
- ☑️ Automated investment - set a customised schedule of occurring investments. (E.g. investing a fiver a day, weekly, biweekly or monthly.)
- ☑️ *Automated Roundups - automatically sending over change from transactions to an automated investment account
- ☑️ Extras - such as financial advisers, retirement plan options, and family plans.
Overall, most of the U.S. MV services can be used as micro-savings or micro-investment apps, with a good amount of freedom to fine-tune and customise.
The main distinguishing factors with these are whether it’s commission free trading and the type of assets they can be traded. For example, Acorns and Stash only allow ETF-based assets, while Robinhood allows a diverse range of asset types:
📈 Crypto: Participate in the cryptocurrency market 24/7 in order to HODL, buy, and sell bitcoin, dogecoin, ethereum, and more.
📈 Gold: Available for £5/mo, inc. detailed market metrics and reports.
📈 Options: Take a low-barrier-to-entry position on assets, whether bullish or bearish.
📈 Stocks & Funds: Invest in individual stocks or bundles of asset classes (ETS).
But our research suggests that the closest Stash / Acorns / Robinhood alternative UK is the Moneybox app.
It isn’t a tailor-made micro-investment platform. However the Moneybox micro-investment and micro-savings app is the ONLY U.K. app (we’ve seen) that does roundups! It also has the following track-record:
- ⚙️ Outstanding Reviews - Moneybox currently has a 4.8 out of 5 stars rating by over 30,000 users, ranking them #31 in the Apple Store ‘Finance’ category.
- ⚙️ Low Fees and Minimum - Invest as little as £1 and pay only £1 per month for the service.
Put £1 Into a Moneybox Account Today
2. Wealthify – Closest Second
Key Features:
- Five Investment Risk-levels
- Range Of ISA’s
- Recurring-Standing Orders
- Fully-fledged Retirement Options
- Start With As Little As £1
PROS
CONS
📓 Wealthify Review
Wealthify doesn’t do roundups. But it basically offers all the other capabilities you’d expect of a strong money investment app.
For reasons explained above (in the Moneybox review), we wouldn’t necessarily consider this a micro-investment tool, but it can be used for that. Which makes it similar to the U.S.’ Robinhood service. You need to be extra cautious about how much you're spending across time.
Set the amount to invest per asset or sector. Set goals, filter by parameters. There’s no withdrawal fees. And funds are charged at about 0.22% across the year, at a flat transaction rate of 0.7%. A few of the advertised use cases for this personal savings and investment tool include:
- Growing a nest egg for your children
- Award-winning investments and junior ISA (stocks & shares)
- No investment experience needed
- Configure portfolio according to five risk levels
- Instantly check up on progress on app or browser
- SIPP
- TLS encryption and strict privacy policy
Overall, they're positioning themselves as a platform that can bring traditional micro-investing (that piggy bank on the table), general savings, and even traditional pensions and retirement up to the modern pace. Essentially, providing a hub where you can see where your money is invested, combine pensions and investments in one place, and tweak strategy all from mobile.
They seem to be pretty transparent with their pricing. There is a yearly management charge of 0.6%. And for investments, plans can be configured according to levels of risk and diversification that span across property, commodities, shares, bonds on international markets.
3. Nutmeg – Best Passive Micro-Investment
Key Features:
- Clear and Straightforward
- Low Charges
- User-Friendly Interface
- Available for Android and IOS
- Strongly Suits Passive Long Traders
PROS
CONS
📓 Nutmeg Review
Nutmeg markets themselves as “the smarter way to invest”. And, by their user rating, this could well be true.
For starters, they’re as well-rated as Moneybox. (Though, they are 160 positions lower-down in the rankings, in the Apple Store ‘Finance’ category. NB. It’s also available on Android.) And they’re automated.
How it works is that you download the app, say what you want to invest, your risk tolerance and then let the Nutmeg team configure an investment plan for you. The user interface looks simple. They are currently the supposedly biggest “digital wealth manager” in the UK.
This platform is more similar to Moneyfarm than something like Acorns.
Micro investing apps like Acorns, Stash (and Moneybox to a lesser degree) let you semi-passively micro invest with a passion. You are largely in control of setting up your plan, making adjustments as needed, and so on. But Nutmeg is a bit more hand’s-off.
It can be adjusted to fit a micro-investing strategy. While you will be able to check in on investments, more control will be in the hands of the Nutmeg team, at least at first. They will advise you on Nutmeg’s different asset offerings and models, from Lifetime and Junior ISAs to Personal Pensions and Stocks and Shares ISAs.
But once things are set up, there’s quite a bit of flexibility with moving around investment funds in real-time, transferring pre-existing ISA accounts, and setting up automatic recurring funds from your bank account.
4. Moneyfarm – Strong Well-Known Underdog
Key Features:
- Beginner-Friendly App
- Great Progress Visualisations
- Recurring-Standing Orders
- App Regularly Updated
- Start With A Little As £1
PROS
CONS
📓 Moneyfarm Review
Moneyfarm deserves an honorary mention. They seem to have been the leading micro-investing option in the UK until recent years. Outcomes obviously vary. But there looks to be many people who have had a good experience on the platform. Google Play reviews give it four stars out of five.
With some results as high as 30% over two years, there’s not much to argue about, in terms of possibility…
But others do have the opposite result, most of the customer issues seem to have to do with process and user interface glitches, rather than pots that are in the negative. Although there are a few cases of overall losses:
So it looks worth a shot, particularly if you’re looking for a potentially high-interest ROI way of putting your small savings to work.
Buying Guide 📚
Let’s cover the basics. This section will offer key awareness. It’s good for beginners who are still learning how micro-investing works. This section will also be helpful for making a buying decision on the best micro-investment platforms on the UK market to use:
What are micro-investment apps?
These have become a recent trend in the investment world…
A world so full of distractions that it can be easier to make lots of tiny little expenses, which all eventually snowball negatively into debt (from your Netflix subscription, to buying a latte during the morning commute…) than it is to do with savings.
Micro-investing, in one sense, exploits the consumer lifestyle that most of us have. It turns spending habits onto its head, to invisibly rack up investment pools… For instance, a good-quality micro-investment app can take each-and-every purchase you make on your debit card, and round it up to the nearest pound.
Question is, how much of an impact does this kind of penny-savings approach make in the long-run? Let’s dive deeper into the benefits and drawbacks, how micro-investing works, and why it’s trending as an investment approach.
How micro-investment works 🏛️
Micro-investing apps differ from regular savings accounts because they let you automatically invest in different financial vehicles, such as stocks, micro-shares of ETFs, crypto and so on.
But for some of these investments, such as stocks, a few investment apps charge fees per trade until your balance hits a specific amount, such as £3000.
Three examples of micro-investment apps are Stash, Acorns, and Robinhood. These have a lot of use with millennials especially - in fact, as much as half of millennial investors have tried out investing apps like Robinhood, compared to only around a third of Gen-X investors and around 5% of baby boomer investors.
There’s some overlap between micro-investment vs. micro-saving capabilities. It’s up to you how you primarily use your app. Your debit card is connected to the app, so that it can instantly make these transfers.
This feeds your investor’s account - whilst not a retirement strategy, it can be considered a high-interest savings method or a gateway into investment.
Micro-investment apps as an investment strategy? 🛩️
If micro-investing is your core plan for retirement, then you should be prepared to go hungry. Micro-investment apps are well suited to people who want to start small.
For instance, building up a good habit or track-record of investing.
The proper context to understand this mechanism is having a way to round up your Amazon purchase by 50p and add it into your savings pool. Results are micro, and not recommended as a central investment strategy.
In addition, speculation on financial markets varies wildly in the amount of risk involved. Investing in a blue-cap stock is much different to investing in highly risky exchange-traded funds (ETFs). Some apps, such as Robinhood and Stash, only allow you to either invest in individual stocks or ETFs - even for shares in large firms, substantial capital is needed to get noticeable interest or appreciation.
So you’ll mainly be using these services as a savings app, or for the riskier users, for aggressive speculation. Just be aware that this is its primary function, a good way to beef up pre-existing funds (or to essentially bet on the market), rather than a trustworthy investment solution.
How to integrate micro-investment into your life 🌱
Here’s how to properly integrate micro-investments as a financial-wealth strategy, starting with the three baby steps…
- Develop a good grounding
Rather than your spare change leaking away into tiny bets, do the following (Dave Ramsey calls these the “three baby steps”):
- £1000 - Put together a starter emergency fund of £1000.
- Debts - Next, pay off any debts.
- Go bigger - Then allow a larger emergency fund to grow, covering 3-6 months of living expenses.
You’re unlikely to be ready for investment, until your foundation is set. Savings are nonsensical if you’re still paying off therefore things purchased months or years back! Getting rid of debt permanently gives you lots leveraged for wealth building.
There are exceptions to this rule, but far-and-few between. In principle, this structure helps to develop the habit of segmenting (and mostly avoiding) debt and income. So that when a killer opportunity pops open, such as crypto in its infancy years, you’ll have the capital to make a substantial investment.
From this point, 15% of what you are and can actually go towards future investment opportunities - the key premise here is that new opportunities always appear on the horizon. What matters is a strong foundation. But there are other practical emergencies that can pop-up such as a broken boiler or car MOT.
A healthy emergency fund is critical when (according to statistics from Finder.com), across the years 2019-2020:
🙄 1-in-10 Brits had £0.00 savings (this represents 9% of the population).
🙄 One-third of Brits had under £600 in savings.
🙄 In 2020, the average Briton had £6757 saved…
That said, this is possibly higher than the U.S. equivalent. Some research in recent years found that 45% of Americans had under $1000 (not pounds) saved up, in case of an emergency.
- Make your investment plan simple and reliable
Nope: savings probably won’t make you a millionaire inside of a decade. But the practical use of saving for retirement planning still holds up.. A good figure is 15% of your income going towards your retirement savings.
Find out if your company matches pension funds. For instance, if your company gives a 18% match on any contributions, invest at least 18%. That money will come to you freely. Once you meet the match, then consider a fund that has more mutual fund options and no tax deductions for money withdrawn for retirement.
- See the big picture
Micro-investing cannot be relied on for bread-and-butter retirement planning. So for instance, if you plan on travelling after you retire and pursuing hobbies, a larger nest egg is needed - Rather than a micro one.
FAQs
Why do people use micro-investing apps?
Investing tiny, almost noticeable figures makes things pretty easy. Once you’re set up, you can forget about it - risk-levels are small to nonexistent - as it’s money that probably won’t be missed. It’s a low effort way of putting spare cash to use.
You don’t need much at all to begin either… While some apps need you to pay a user fee, it’s normally small. For example, Acorns is around £1-3/mo depending on the account type. So it’s a gateway into investing, or a savings strategy that is more aggressive (higher risk).
Common uses of micro-investing apps
These are mostly a range of set-it-and-forget-it use cases, although micro-investing is also a gateway into traditional investing:
- ✅ Saving for the end-of-life of a pet - for instance, one user invests $15 weekly, in order to save $9,000 over the course of 10 years.
- ✅ Passively building an emergency fund.
- ✅ Bolstering pre-existing savings and investments.
- ✅ Getting into the habit of compound savings / interest - by segmenting away money in your bank account from the money hedged away for building wealth.
