Investing apps: which offer the most for beginners?
Rachel Reeves and her government colleagues are keen to get more Britons investing in the stock market. She said recently that a lot of money was being put into cash savings accounts 'when it could be invested in equities, in stock markets, and earn a better return'.
The good news is that the rise of DIY tools and mobile apps means it is now easier than ever to get investing. However, the vast array of options can make it daunting to know where to start.
For new investors who don't have the time or confidence to manage a portfolio, 'robo-advisers' can be a good option. They might sound like something out of a sci-fi movie but are basically online investment platforms that use technology to help automate the process. Most are app-based and typically offer a range of ready-made investment portfolios tailored to your individual preferences.
You usually fill in a short questionnaire to determine your goals, how long you want to invest for, and how much risk you want to take.
Typically, the longer you are investing for, the more risk you can afford to take. But you need to factor in your personal attitude to risk, too. Stocks and shares have historically delivered better returns than savings accounts, but there is also a chance you could lose money – and there will be ups and downs along the way – so you need to feel comfortable about this before taking the leap.
The ready-made portfolios typically invest in a selection of exchange traded funds (ETFs). These are low-cost funds that track a chosen index such as a UK or US stock market, government bonds (such as UK gilts or US Treasury bills) or the price of a commodity such as gold.
The apps put a selection of these funds together to create a balanced portfolio which spreads your money across different assets.
So which of the apps – if any – is right for you? We looked at some of the most popular ones to see how they stack up.
Who? One of the first robo-advisers to hit the market, Nutmeg launched in 2012, and in 2021 it was bought by the investment company JPMorgan Chase. It has more than 200,000 users in the UK, with more than £4.5bn invested through the app.
Minimum investment: £500 for Isas and pensions, £100 for lifetime Isas and junior Isas.
Investment choice: Nutmeg has different tiers of service, which will affect costs. With its fully managed option, you choose a risk level from one to 10, and a team monitors the portfolio and makes regular adjustments. With the fixed allocation option, there are five risk levels and the portfolio is set by the investment team once a year.
Fees: Nutmeg says the total charge for the fully managed option is 0.98%. Someone investing £3,000 would pay about £29.40 a year. For fixed allocation, it is 0.65% – about £19.60 a year for that example.
We like: Nutmeg is transparent about performance, and you can see how its fully managed portfolios have done over the past decade. For example, the 6/10 risk portfolio has returned 43.4% over 10 years, compared with 36.7% on average for comparable funds. The 5/10 portfolio is up 31.9% over that time, compared with 36.7% for its peers.
Anything else? For those who want more support, Nutmeg offers free guidance to help with general questions, and full financial advice starting from £900.
Who? Launched in 2016, Moneybox specialises in savings and investments and is reported to now have more than 1.5 million customers and in excess of £10bn of assets under management.
Minimum investment: You can open an account with as little as £1.
Investment choice: There are just three core options: cautious, balanced and adventurous. The cautious option has just 15% in company shares, with 40% in bonds and 40% in cash, which makes it less risky but means your returns may not be as impressive as with other options. The adventurous option has 80% in shares, 15% in property and 5% in bonds.
Fees: A £1-a-month subscription fee covers trading costs. Then there's a 0.45% platform fee, plus the cost of your actual investments – 0.17% for the core funds. Moneybox says someone with £3,000 invested in its balanced fund would pay total charges of 0.85% – about £25.60 a year.
We like: The round-ups feature. Link your bank account or credit card to the app, and it will round your spending to the nearest pound and automatically invest the difference. For example, if you spent £1.87, it would be rounded to £2, with 13p invested – a handy way to boost your contributions.
Anything else? Those who feel more confident can pick their own ETFs to invest in rather than the ready-made portfolios. Or, if you want to cherrypick specific companies, there is a limited range of stocks to select – though currently only US stocks are available.
Who? Dodl is the newest of this cohort, launched only in 2022, but it is owned by the wealth management giant AJ Bell, which has been around since 1995. Dodl offers a simpler process and lower minimum investment level than its parent company, and a more limited choice of investments.
Minimum investment: £100, or set up a direct debit from £25 a month.
Fees: 0.15% a year, with a minimum of £1 a month, plus the cost of your investments – 0.31% for the core range. Someone with £3,000 invested would pay about £19.30 a year.
Investment choice: The range of ready-made funds, run by AJ Bell, are labelled by risk level – from cautious to global growth. You can also choose individual shares, with the ability to browse by region (either the UK or US) and sector (such as finance, health or technology).
We like: The option to invest by theme, which directs you to a relevant ETF for your trend of choice. For example, the 'On top of the world' theme invests in the HSBC FTSE All-World, an index of some of the biggest companies around the globe, which charges 0.13%. Other options include 'the home team' for UK-focused investments, and 'robo revolution' for a fund investing in robotics companies.
Anything else? It pays a competitive 4.25% (variable) on cash you have not yet invested.
Who? Founded in 2014, Wealthify is now owned by the insurance giant Aviva and has about 100,000 customers. It has a big focus on keeping things simple and jargon-free.
Minimum investment: Currently £1 for Isas and £50 for pensions, though from Wednesday 25 June the minimums will be £1 for junior Isas, and £500 for stocks and shares Isas and pensions.
Investment choice: There are five risk levels: cautious, tentative, confident, ambitious and adventurous. The cautious portfolio has 85% of its assets in government bonds and just 5% in company shares. The adventurous option has 74% in shares and 14% in government bonds, and also invests in property and infrastructure.
Fees: The platform fee is 0.6%, which includes the cost of managing your portfolio. The cost of your investment on top is 0.16% for a general portfolio, and 0.7% for the ethical option. That adds up to £22.80 a year, or £39 for the ethical option, for someone with £3,000 invested. There is no minimum fee.
We like: Its outlook page, which offers a short overview of the prospects for different investment regions and assets. It's a handy way for investors to learn a bit more without hours of research.
Anything else? Wealthify boasts of various customer service awards on its website – a good reminder to consider factors aside from fees and the investment range. Always be sure to do your own research and read independent reviews before choosing a provider.
Who? Moneyfarm originated in Italy and launched in the UK in 2016. It now has about 160,000 active users and more than £5bn in assets under management. The firm has backing from big investment groups such as M&G and Allianz.
Minimum investment: £500.
Investment choice: There are seven risk levels for its managed funds, which are regularly rebalanced by the investment team. For example, the 6/7 risk option has 72% of its assets in developed market companies and 10% in emerging markets companies, while the 2/7 risk option invests predominantly in bonds.
Fees: Someone with £3,000 in the actively managed option would pay management fees of 0.75%, plus 0.3% for their investments – equivalent to about £31.56 a year. For the fixed allocation options, which are adjusted just once a year, the management fee is 0.45% plus 0.17% for the investments – a total of 0.62%, or about £18.60 a year for that example.
We like: It is easy to see a breakdown of each portfolio on the website to understand how it is invested. You can see how it invests by asset type, region and sector – and there's a simple explanation of each, too.
Anything else? As with most of these apps, there is an option to apply environmental, social and governance (ESG) criteria to your investments, which is good for any investor worried about where their money is going. This will screen out certain investments – for example, heavy polluters or companies with a poor human rights record. Selecting this option typically increases the costs.
Before choosing a robo-advice app or service, make sure the company is regulated by UK watchdog the Financial Conduct Authority (FCA).
It should also be a member of the Financial Services Compensation Scheme (FSCS), the UK's official consumer 'lifeboat' scheme which protects up to £85,000 of your money if your provider collapses.
Most apps offer a variety of accounts, but a stocks and shares Isa is usually the best choice. You can put up to £20,000 a year into an Isa, and any interest or growth is sheltered from HMRC, meaning you get to keep all of your gains.
When it comes to fees, you are usually charged a percentage of the amount you invest – for example, if you invested £1,000 and the fee was 1%, you would pay £10 a year. However, sometimes there is a minimum charge, so check carefully what you would pay.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
an hour ago
- Telegraph
Marriage Diaries: Should I get a prenup for my second wedding or trust my husband-to-be?
Should you be planning the end of your marriage before you've even tied the knot? This is the question that's been plaguing me for the past few weeks. I'm 58 years old, and next March will be marrying Steve, 60. It will be a second wedding for both of us: I have three young adult daughters and he has a son. Steve and I are taking great pleasure in planning the next stage of our lives together. But – in between conversations about which location would suit our intimate ceremony, and what dress I should wear as a 50-something bride – I can't help but wonder whether we should get a prenuptial agreement. I'm so preoccupied about this decision that it's been keeping me awake at night. I've been fully open with Steve about my dilemma. He's quite relaxed about the subject, and isn't offended (at least, that's what he tells me) but doesn't think a prenup is necessary. I think this comes down to how we both experienced the end of our last marriages. My divorce from my ex-husband came through six years ago. It was nasty and protracted and expensive, mostly because my ex tried to hide money abroad and attempted to bully me into submission when I was hoping to appeal to his – ultimately absent – better nature. In the end, I had to hire a top family law firm. After a draining process – which ended up in court with a finance dispute resolution – I received a fair settlement. But it cost me the best part of £50,000 and a whole lot of tears. On the other hand, Steve's experience of divorce was far more pleasant. He and his wife had an amicable 'no fault' settlement, which barely involved lawyers. His son was also grown up, so it was less traumatic for everyone. After the sale of the London marital home, my children and I moved into a small cottage in West Sussex which I decorated with great care: I feel happy and settled here. I love my current home so much that Steve has agreed to move in with me while he rents out his Yorkshire house. When it comes to our respective finances, Steve and I are comfortable, but neither of us are rich: I'd say that financially, we are in a similar situation. We are both self-employed in the arts world and our properties are worth about the same. Prenuptial agreements didn't used to be binding in the UK, but I've consulted a lawyer who has told me that – done the right way – they can be. The problem is, setting up a legally watertight agreement could cost up to £4,000. My best friend is telling me that I'm being cynical and defeatist. Having known me for most of my life, she agrees that Steve is a far nicer man than my ex. I should embrace this happy new path with joy, she says, and not throw shade on the occasion by being negative. But she hasn't been through the pain of divorce: she hasn't seen how a white-wedding day can turn into a miasma of bitterness and hatred. I'm just not sure I could go through all that again. All I really care about is keeping this well-loved roof over my head, should we separate – this basic security is everything to me. 'We're both nice people,' says Steve. 'In the worst-case scenario we would sort it out, and I would never take your home from you.' But is it naive to believe this statement, uttered when things are at their rosiest? Surely one of the gifts of reaching midlife is learning from experience, and not making the same mistakes again. Should I listen to my gut and instruct a lawyer? Or am I being negative and doomy – and would my time (and money) be better spent on booking a super-luxurious honeymoon?
The Sun
an hour ago
- The Sun
Parliament serves food off German-made plates – sparking huge patriotism row and calls for Palace to 'buy British'
THE UK Parliament is serving food off German plates - sparking a huge patriotism row. Furious MPs slammed the "outrageous" practice and called on the Palace of Westminster to put country first and 'buy British". The members dining room in the House of Commons is used by MPs and is one of the grandest restaurants in the building. Its elaborate menu boasts that "wherever possible we use British produce'. But it serves its grub on plain white plates and saucers which are made by Villeroy and Boch - a German firm founded in 1748. Gareth Snell, Labour MP for Stoke-on-Trent Central - known as 'The Potteries because of its proud ceramics industry - slammed the practice. He told The Sun on Sunday: "Britain has the best ceramics in the world - but our own parliament is serving food off German plates. 'This is outrageous and it is unpatriotic. 'Parliament should support businesses in areas like mine and buy British crockery.' 2 Britain's once booming potteries industry has been hammered by sky high energy costs. Many firms have shed jobs and some have closed. Mr Snell is launching a Buy British potteries campaign - and is urging the parliamentary authorities to lead by example and only use UK-made plates. Robert Flello, CEO of Ceramics UK, said: 'Why is the UK House of Commons using German cups and saucers and plates in the dining room used by MPs? 'It is outrageous. They need to be told to buy British. There is no excuse. 'Our potteries produce the best quality crockery. 'Buying British goods is a matter of national pride and will also help an industry struggling because our energy costs are going through the roof. 'If you go to any other country - France or Italy say - I bet their state institutions are using crockery made in their own country.' Parliament has lots of different restaurants and cafes serving food off a wide range of crockery bought from suppliers from around the world. While it uses some crockery made in the UK, it does not have a policy to only buy British. A House of Commons spokesman said:'We source a wide range of crockery from firms within the UK, as well as from those based elsewhere. All purchasing is in line with relevant legislation for public bodies, which prioritises value for money."
The Sun
an hour ago
- The Sun
Families on Universal Credit have days left to apply for free £300 vouchers this month – check if you're eligible
THOUSANDS of families on Universal Credit can claim up to £300 this month. This leg-up comes from the government's Household Support Fund (HSF) - a huge £742 million fund going straight to councils across England. 2 The HSF is a government-backed scheme designed to help vulnerable households with essentials like food, energy bills and other living costs. Each local council is given the freedom to decide how to distribute the money, making sure it directly helps the people who need it most in their area. City of Doncaster Council is distributing a one‑off cash payment through HSF. Those typically eligible for this support are already receiving one of the following: Housing benefit Local Council Tax Reduction Universal Credit which includes the housing element Means-tested free school meals Households on Universal Credit can receive food vouchers worth £100 if they have one dependent child. Those with two children will pick up £200, while households with three or more children will be given £300 to help cover food costs. City of Doncaster Council defines a dependent child as one for whom you receive Child Benefit. Besides families with children, other eligible households - including those without children - can receive £100 to help cover energy bills. The council is also allocating £150,000 towards local food banks and its hygiene bank. Families can get FREE washing machines, fridges and kids' beds or £200 payments this summer – and you can apply now An additional £100,000 will boost community hubs, helping vulnerable households right in the community. Meanwhile, a huge £400,000 is now earmarked for the updated Local Assistance Scheme. How can people get the payment? Those who have received help from the Household Support Fund in the past - and still meet the criteria - will not need to apply. Instead, the payment will automatically hit their bank accounts. But they will need to contact the council if their bank details have changed. Those previously paid by cheque will receive the payment by cheque - unless they provide the council with their bank details. Others will need to apply between now and July. Click here to claim a Household Support Fund payment. Can those who live outside Doncaster claim support? Yes, councils throughout the country are actively assisting families through the Household Support Fund scheme. Blackburn with Darwen Borough Council is giving thousands of families a helping hand - offering free washing machines, fridges and kids' beds or £200 towards the cost of energy. Those in Leeds can get payments of up to £150. By using the government's council locator tool, it's easy to find out which local authorities are offering support and the eligibility criteria. Household Support Fund explained Sun Savers Editor Lana Clements explains what you need to know about the Household Support Fund. If you're battling to afford energy and water bills, food or other essential items and services, the Household Support Fund can act as a vital lifeline. The financial support is a little-known way for struggling families to get extra help with the cost of living. Every council in England has been given a share of £742million cash by the government to distribute to local low income households. Each local authority chooses how to pass on the support. Some offer vouchers whereas others give direct cash payments. In many instances, the value of support is worth hundreds of pounds to individual families. Just as the support varies between councils, so does the criteria for qualifying. Many councils offer the help to households on selected benefits or they may base help on the level of household income. The key is to get in touch with your local authority to see exactly what support is on offer. The last round ran until the end of March 2025, but was extended. The most current round is running between April 2025 and March 2026. 2
