In a nutshell
Want to save for the future and make your money work for you, but not sure how? Nutmeg is for you. They handle all the investing for you – you just sit back and watch your money grow, whenever and wherever you like.
cracked open 🥥
Nutmeg. How does it work? Are they any good? And is my money safe? Let’s find out.
Nutmeg is the largest ‘digital wealth advisor’ in the UK. That means a 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!
You simply choose the type of savings account you’d like (they call this a product). 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.
Here’s the full range of Nutmeg accounts:
- General investments (a ‘normal’ account with no tax-free benefits)
- Stocks and shares ISA (tax-free investments of up to £20,000 per year)
- Lifetime ISA (25% government bonus for investing in your first home or retirement)
- Pension (25% government top-up for your retirement)
- Junior ISA (tax-free contributions for your children, up to £9,000 per year)
Let’s say you want to start saving or investing, or more importantly, putting your savings to work, then we’d recommend you choose their Stocks and Shares ISA. Which is an account that allows you to invest up to £20,000 per year completely tax free, so the increase in your money is all yours to keep.
Get 6 months of Nutmeg freeGet started here¹
'Investing should be a clear and straightforward experience'. We like the sound of that. That’s what Nutmeg has built with their app and website.
Put simply, you’ll always be able to see how your investments are performing. You get the flexibility to change how and where your money is investment, and how much risk you want to take. More on this later.
They currently have over 100,000 customers, not too bad at all. With a combined amount invested of over £2 billion. For a company that started in 2012, those numbers are pretty great, they must be doing a few things right to keep their customers happy.
They’ve also won ‘Best Online Stocks & Shares ISA Provider’ in the ‘Yourmoney.com awards’ for 5 years in a row.
What else should you know?
What’s the minimum investment?
Really low. You can actually invest with as little as £100 (or £500 depending on the account).
Can I change my investments?
Yep, you can move your money around within Nutmeg whenever you like, for free, change investment styles or move to a different level of investment risk. (more in investment styles below).
What's the customer service like?
Really good, it’s rated 4.3 out of 5 on Trustpilot, which gives it an excellent rating. They’re a great and friendly team, real people, ready to help you, or answer any question you have, on the phones, email and even on live chat through the app or website.
Here’s one review we like (as they’ve used real figures!):
“Love Nutmeg. Put 6k in 18 months ago and have already seen a positive return of 14% (at this point in time). Have now set up a lifetime ISA and two ISAs for my kids. Love the graphs they produce too. The way they display information is a refreshing change from normal banks.”
Can I access my money if I need to?
You can easily 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.
However you should be investing with a long term view and keeping it in as long as possible, at least until you need it.
That’s because of what’s known as compounding interest, where the interest you earn is reinvested. It’s like money making money, making money. Over time this really adds up! Check out how it works with our chart below.
There’s also no fees to take your money out either, often called ‘exit fees’, which many investment companies charge as hidden fees.
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.
Which ETFs your money goes into is decided by the experts at Nutmeg, who then use Nutmeg technology to buy and sell. 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 (FTSE100), 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:
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.
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 a suitable market index, such as the FTSE100 – which is the top 100 companies in the UK.
What this means for Nutmeg, is the Smart Alpha investment style aims to return more than just investing in a regular ETF that tracks a market index. They do this by following an investment strategy by J.P. Morgan’s global research team. Sounds pretty smart to us.
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.
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.
Don’t forget the risk level
So the above is about investment styles, but within these styles, there are also levels of risk 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’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 returns aren’t particularly great or your investment drops in value.
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 preserve your investment (alongside lower returns).
What’s the investment performance been like?
Really good, if you went for a middle of the road, level 6 out of 10 risk, using their Fully Managed investment style, you’d be seeing a return on your investment of 57.1% over 8 years, compared to 50.9% from alternative investment providers.
Is it 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 for the investment funds your money is in too (ETFs), and what’s known as market spread, which is the difference between the purchase price and the sale price of the funds that Nutmeg buys.
So, add all the fees together and that’s what you’ll ultimately pay, around 1% per year. Which is pretty good. For an investment adviser and more managed investments (not with Nutmeg), you are looking at considerably more, and they're mostly not for us ‘normal’ people – too expensive and exclusive.
All fees are automatically deducted from your Nutmeg account too, you don’t need to worry about paying separately.
Here’s a full breakdown of the fees for each investment style:
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 does it exceptionally well, with an awesome phone app and website to easily manage your accounts – providing easy access, and transparency to see how your money is performing over time.
The customer service is great with phone, email and live chat support, and all for a good price, with clear fees, automatically deducted. And great historic investment performance from their experienced team.📈
We think Nutmeg is a great place to grow your savings, it’s 5 stars from us.
Is there a deal?
We’ve got a pretty good deal for you guys! Get 6 month completely free of Nutmeg's own fees, so depending on how much you invest, you could be saving £100s. Not too bad at all.
Oh and full transparency, we’ll get a small fee too, but as always, we’re completely impartial.