Moneybox startup launches new app to allow millennials to micro-invest

Moneybox, a mobile app that allows users to save and invest their spare change, has launched in the UK.

iPhone showing the moneybox app with a picture of a fox next to a bubble with an amount of money in it

Last year, at the Payments Forum Knowledge, Liz Oakes, then of KMPG did a presentation where she spoke about millennials and their finance profile. She said the millennials will drive the payments landscape; they have rapidly changing concepts of payments; the majority of them own smartphones; the majority of them are in debt and expect to be so in the future; they spend more money online than any other generation despite having less income. This, Oakes said, is a situation that is ripe for disruption – in the form of personal finance apps.

Skip to 2016 and the marketplace is full of challenger banks and investment apps like Nutmeg that seek to make the most of the mobile opportunity. As recent data from Tax Incentivised Savings Association (TISA), a lobby group of companies that sell savings and investment products, shows 90% of people are comfortable using technology for their financial actions. This is enforced by the recent British Bankers’ Association (BBA) data, which showed that British people use mobile banking or payment apps four billion times a year.

 

Micro-investments

It is into this market that MoneyBox is launching. MoneyBox’s premise is fairly straightforward. Whatever money you spend MoneyBox rounds up the purchase to the nearest pound and invests the change. So for example, say a cup of coffee costs £1.80p, as you pay by card, in the MoneyBox app you can choose to invest the 20p. You can also set up scheduled deposits or make one-off ones.

At the end of the week, the money you set aside is collected via direct debit and invested. The company’s founders Charlie Mortimer and Ben Stanway said they want the app to help a “whole new generation” of investors, which is why this part is relatively straight forward. The money set aside can be invested in one of three options: cautious, balanced and adventurous, with the risk/return adjusted in each one.

Stanway said:

“Our beta testing has shown that users are making about 30 purchases a week with an average round up amount of 28p – that’s £8.40 per week, or around £440 per year, just from saving your spare change! We’ve also seen that 75% of users are making one-off or weekly deposits in addition to round ups.”

The app charges a monthly £1 subscription (free for the first three months) as well as a 0.45% annual platform fee. It was recently authorised by the Financial Conduct Authority as part of its Innovation Hub programme.

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