Nutmeg

review: is it any good?

Updated on
July 25, 2022

In a nutshell

Want to save for the future and make your money work for you, but not sure how? Nutmeg could be for you. They handle all the investing for you – you just sit back and watch your money grow, whenever and wherever you like.

Our rating

4 stars
Nutty

Nutmeg

cracked open 🥥

Nutmeg. How does it work? Are they any good? Is my money safe? And are there better options?

Nutmeg is one of the larger ‘digital wealth advisors’ in the UK. That means a mobile phone app and website that invests your hard earned money for you – putting your savings to work and making you more money as you go through life. If you don’t do this already, you should be!

Nutmeg app

All you have to do is simply choose the type of savings account you’d like. These range from a Junior ISA to a pension and everything in between. Add your money, select an investment style (more on that later), and done! Sit back and watch your money grow.

But is it right for you? Let’s find out.

Is Nutmeg right for you?

We think Nutmeg is great, but Moneyfarm is our top pick – it's got free expert advice, a better investment record and it's cheaper.

Moneyfarm review

Moneyfarm review

About Nutmeg

Nutmeg has been around for a while now, since 2012 in fact. And have over 150,000 customers. Pretty popular! And a combined amount invested of over £2 billion.

They started with a mission to make investing a ‘clear and straightforward experience’. We love that. And it’s what Nutmeg built with their app and website. You’ll always be able to see how your investments are performing, and have the flexibility to change how and where your money is invested.

However, unfortunately in 2021, Nutmeg was taken over by the big bad American bank J.P. Morgan Chase.

They’ve got an extensive history of mis-dealings such as stock market manipulation, and ruthless profiteering, but more importantly, they are the biggest bank investing in fossil fuels by far – devastating the environment and communities around the world.

Nutmeg is now owned by J.P. Morgan Chase

We’re not aligned with that at all at Nut About Money. We’re here to help people better understand money, so they can become more confident and grow their money, leading to happier lives without the stress of money worries. And doing so without damaging the environment and harming others.

Apart from the corporate greed, there’s a lot to love about Nutmeg, making investing far easier, and transparency over your investments. But by being a customer you won’t be supporting a growing UK business anymore, you’ll be funding a mega corporation.

So, if you’re like us, we don’t recommend using Nutmeg. You can check out our best investment app recommendations, and in particular Moneyfarm, who are a digital wealth manager just like Nutmeg – except they’re cheaper, have a better history of making money for customers, and provide you with a free personal advisor – someone by your side, to help with your investments and any questions you might have.

However, if you’d still like to learn more about Nutmeg, we’ve got an honest review below.

Is Nutmeg good for beginners?

Yep, it’s a good option for beginners, mostly because you don't need any previous knowledge or experience in investing. It’s all managed for you by professionals, you can just sit back, relax and watch your money grow.

However, you do need to add a minimum of £500 to open your account (£100 for Lifetime ISAs).

Investment options

Nutmeg offer the full range of investment account options in the UK, which are:

  • General investment account (GIA)
  • Stocks & Shares ISA
  • Lifetime ISA
  • Pension
  • Junior ISA

You’ll always be able to see how your investments are performing and you get the flexibility to change how and where your money is invested, and how much risk you want to take (more on this later).

Let’s dive into each one briefly:

General investment account (GIA)

This is a ‘normal’ account with no tax-free benefits. You’ll pay Capital Gains Tax, which is 20%, on any money you make over £12,300. This is from all of your investments, not just with Nutmeg (except investments in an ISA).

Stocks & Shares ISA

This is the most popular account for investing. You can invest £20,000 per year (your ISA allowance), and all the money you make in the future is completely tax free!

We’ve got a great guide to Stocks & Shares ISAs if you want to learn more.

Lifetime Stocks & Shares ISA

This is Stocks & Shares ISA on steroids! Not only is everything you make completely tax-free, but you’ll also get a 25% bonus from the government on all the cash you put in.

Lifetime Stocks & Shares ISA

There is a £4,000 per year limit though, and it’s only for buying your first home, or saving for later in life (not as a replacement for a pension).

Learn more about Lifetime ISAs here.

Junior Stocks & Shares ISA

These are perfect for saving for your children. You can save up to £9,000 per year, completely separate from your own £20,000 ISA allowance. It will all be in your kids name, and they’ll get access to it when they turn 18.

Junior Stocks & Shares ISA

Learn more about Junior ISAs here.

Pension

You can create a private pension with Nutmeg. A private pension gives you control over where your pension money is invested, and you get a bonus from the government of 25% for everything you pay in.

And if you’re a higher rate tax payer, earning more than £50,271 per year, you can claim 40% back on some of it too.

Heads up: if you’re just looking to open a pension with Nutmeg, it’s worth checking out pension-specific providers, as they’re much cheaper. Pensionbee is the most popular in the UK.

Withdrawing your money

You can remove your money whenever you’d like, you can do it online, and it takes a few working days to transfer back into your bank account.

There’s also no fees to take your money out either, often called ‘exit fees’, which many investment companies charge as hidden fees.

The investments

Nutmeg invests your money in exchange-traded funds (ETFs). This means your money is invested in a wide range of good companies, all grouped into a ‘fund’. This helps manage risk and makes it much safer than investing directly into one or a few companies.

ETF compared to shares

Which ETFs your money goes into is decided by the experts at Nutmeg, who then use technology to buy and sell shares. Your money is in safe, human, hands. Well, all except for one investment style, where the robots reign! (More on that below).

ETFs are low cost, transparent and flexible, so you get low fees and transparency using Nutmeg too. They typically track markets, such as the top companies in the UK (called the FTSE 100), rather than try and make as much money as possible – which is often much riskier. Essentially, they are a safer way of growing money over a long period of time.

Types of investment styles

There’s four ‘investment styles’ you can pick from when opening your Nutmeg account. It's how you’d like to invest your money on the platform, so your options are:

Fully Managed

This investment style is where the experts at Nutmeg are looking at news, data and analysis to manage your money day-to-day and decide where to put your money.

Smart Alpha

So this is where it gets a little confusing. ‘Alpha’ in finance is a measure of how much an investment has ‘beaten the market’ i.e. how much it has beaten investing in all of the companies within a stock market (called an index).

Nutmeg Smart Alpha

What this means for Nutmeg, is the Smart Alpha investment style aims to return more than just investing in an ETF that tracks the stock market. They do this by following an investment strategy by J.P. Morgan’s global research team.

Fixed Allocation

This is very similar to the ‘fully managed’ investment style, with experts selecting which investments (ETFs) to put your money into, however the ‘robots’, aka the technology, will decide when to make changes to the investments, rather than the human experts. And as a result, this style is actually cheaper for you.

Socially Responsible

Conscious about the environment and climate change? We are too! This investment style will only invest in environmental and socially responsible businesses, so no fossil fuels or tobacco companies, or anything that has a negative impact on the environment or society.

However, just because there’s one option to be socially responsible, doesn’t mean Nutmeg, or their parent company, J.P. Morgan Chase is socially responsible. In fact, they're the biggest investors in fossil fuels out there.

Don’t forget the risk level

So the above is about investment styles, but within these styles, there are comfort levels of risk (meaning how you feel about keeping your money safe vs risking some for more money) you can choose from, on a scale of 1-10 (10 being most risky).

Typically, as in almost all investments, the higher the risk, the higher reward you can expect. Although it doesn't mean you will actually get a higher return, it depends on the success of the investments.

It’s up to you which risk level you choose, however it’s often dictated by your age. As investments are a long term strategy, if you’re younger, time’s your oyster and you can have a higher risk strategy as you shouldn’t need the money any time soon and so can hold out if your investments drop in value over the short term (1-5 years).

Whereas if you think you need the money back at some point soon, such as for a large purchase or even retirement, you might consider a lower risk investment strategy which aims to steadily increase your investment.

What’s the investment performance been like?

Good. If you went for an option with slightly higher than average level of risk (where you would expect better returns), so a level 7 out of 10 risk. And using their Fully Managed investment style. Over the last 5 years you would have made 33.7%. 

Now it’s good, but it’s not the best. It’s an average return per year of 6.74%. As a rule of thumb you should expect around 8% per year from investing, and if you compare it with their nearest competitor, Moneyfarm, they don’t fare too well at all…

Using a similar risk-level investment option, Moneyfarm has returned 71.6% for their customers over the last 5 years, which is an average return per year of 9.4%. (And an even bigger return on their higher risk option of 11.4% per year).

It may all sound like percentages and maths, but the bottom line is you would have made more if you had invested with Moneyfarm.

Here’s what it would look like if you had invested £10,000, 5 years ago:

Provider Return after 5 years (£10,000)
Nutmeg £13,370
Moneyfarm £17,160

That’s a massive difference of £3,790 that you’d have missed out on if you had invested with Nutmeg. But here’s the important part, you’re losing even more money each year going forward, as with Moneyfarm you now have £17,160 invested, compared to £13,370 with Nutmeg.

Let’s say both providers make 10% next year. With Moneyfarm, you’ll earn £1,716, and with Nutmeg you’d only make £1,337, a difference of £379, and the difference will keep getting bigger and bigger each year.

This is called compound interest, it’s your money, making even more money over time. And it’s a really big deal.

Compounding interest chart

Nuts About Money tip: keep on top of how well your investments are performing and be prepared to switch ISA providers if you think they’ll perform better!

If you want to learn a bit more about Moneyfarm, here’s our Moneyfarm review.

Is Nutmeg expensive?

Because Nutmeg is built on exchange-traded funds (ETFs) that are relatively cheap fees wise, it means Nutmeg can offer you low fees too.

However, you’ll also be paying a fee on the investment funds your money is in (ETFs), and what’s known as market spread, which is a cost to buy and sell these funds.

So, add all the fees together and that’s what you’ll ultimately pay. Just over 1% per year. Which is good. 

If you invested with an investment advisor (a real person) instead of Nutmeg, you’d be looking considerably more, as much as 5% on your initial investment and then ongoing management fees.

However, in comparison with other digital investment providers, Nutmeg is the most expensive.

Other popular digital wealth managers include Moneybox, Moneyfarm and Pensionbee (just pensions).

Here’s a full breakdown of the fees for each investment style:

Investment style Nutmeg fee Fund cost Market spread
Fully Managed 0.75% up to 100k, 0.35% after. 0.19% 0.07%
Smart Alpha 0.75% up to 100k, 0.35% after. 0.19% 0.07%
Fixed Allocation 0.45% up to 100k, 0.25% after. 0.17% 0.07%
Socially Responsible 0.75% up to 100k, 0.35% after. 0.31% 0.07%

What do the people say?

Nutmeg is rated 4.3 out of 5 on Trustpilot, the popular reviews website, from over 1,100 reviews. Which is really good. Especially for financial services where the scores tend to be lower (as customer service isn’t normally a priority in finance).

They’ve also won ‘Best Online Stocks & Shares ISA Provider’ in the ‘Yourmoney.com awards’ for 5 years in a row, from 2015 - 2019.

Nutmeg best online stocks and shares isa

However, new digital wealth managers with potentially better options are taking the awards in the last few years, such as Moneyfarm and Moneybox.

Our thoughts

What we really like about Nutmeg is it gives everybody the chance to invest their money, and build up their savings easily, simply and automatically. And everybody should!

But more than just the ability to invest, it has a great phone app and website to easily manage your accounts – providing easy access, and transparency to see how your money is performing over time.

The price is okay, and fees are transparent.

However, we’re knocking it down points for its average investment track record, especially against other investment platforms.

And our major issue is that it’s owned by J.P. Morgan Chase, the big bad bank. We’re not a fan of pure corporate greed – destroying the environment and communities around the world chasing profit.

Now, not everyone has as strong views as us, so we’re going to give it 4 stars for the actual investment platform and providing people with access to investing. But there’s better choices out there that are cheaper, make customers more money, and aren’t owned by greedy corporations. 

We recommend you check out other best investment apps and Moneyfarm for ISAs and Pensionbee for pensions.

Is Nutmeg right for you?

We think Nutmeg is great, but Moneyfarm is our top pick – it's got free expert advice, a better investment record and it's cheaper.

Moneyfarm reviewMoneyfarm review

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