Boxing Clever – App Introduces Millennials to Savings and Investment

As its founding principle DIY Investor has the archaic northern English or Scottish saying ‘mony a mickle maks a muckle’ – broadly, many small things combined over time create something larger; a blueprint for successful savings and investment and now Moneybox has launched a smartphone app that brings that concept into the fintech era.

Moneybox targets millennials who say they do not have the time, money, inclination or knowledge when it comes to investing in stocks and shares or ISAs.

However, the humble piggy bank or copper bottle has been replaced by state of the art technology which allows users to round up purchases and sweep the ‘spare change’ into a Moneybox account and invest via their mobile phone.

Moneybox rounds purchases on everyday items such as a morning coffee, lunch or a cheeky one after work up to the nearest pound and sets aside the ‘change’.

Over the course of a week all of the residual 10ps here and 30ps there accrue to a savings account, although each purchase gives the option to ‘sweep or keep’ the residual.

At the end of the week, the balance is collected via direct debit and invested in one of three tracker funds based upon the attitude to risk of the user – cautious, balanced or adventurous – with appropriate levels of risk and return

‘the humble piggy bank or copper bottle has been replaced by state of the art technology’

One of the entrepreneurs behind Moneybox, Ben Stanway said ‘by making it easy, engaging and accessible, we hope to encourage people to get into the habit of setting money aside little and often, and help a whole new generation start investing towards their future,’

However much they are touted by the next generation digital investment managers, or robo-advisers, millennials are an age group under financial duress; wages are squeezed, student loans (4.6%? – don’t get me started) and the extortionate price of accommodation means that this is a group that is truly under the cosh financially.

Moneybox research shows that more than a third of 18-35-year-olds say they do not invest as ‘It seems too complicated, I don’t want the hassle’ whilst a similar proportion says they do not have enough money.

However, millennials are certainly comfortable with technology and whilst committing to a full on savings and investment strategy may be beyond them, beta testing for the start-up showed 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.

‘We offer a non intrusive way to set money aside little and often via micro-investing digital spare change – making investing easy, manageable and accessible and creating a culture of subconscious saving,’ the company said.

Moneybox charges a subscription fee of £1 per month to cover transaction fees, and a platform fee of 0.45% per year. Users will not be charged a subscription fee for the first three months and can withdraw their money free of charge at any time.

Moneybox was recently authorised by the Financial Conduct Authority as part of its flagship Innovation Hub programme.

Daniel Godfrey, non-exec chairman of Moneybox and former chief executive of the Investment Association, said: ‘We’re extremely excited to be launching a product that can truly engage young people with saving and investing – a solution which I believe is long overdue.’