Today I wanted to share with you a clever money-saving idea I came across on the excellent Wow Free Stuff website.
The Penny Challenge offers a painless way to save money every day – so in a year’s time you will have the substantial sum of £667.95 stashed away. That’s money you could spend on anything you like.
How It Works
The challenge itself is very simple.
On the first day you put aside one penny. Each day after that you add another penny to the amount you save. So on the second day you save 2p, on the third day 3p, and so on.
Over the course of a year (365 days) the amount you have to save each day is shown in the grid below.
As you will see, by the last day of the challenge you will have to find £3.65 – still an easily affordable sum. And once you have done that, you will have a total savings pot of £667.95.
This would be a great way to get your money-saving started painlessly in 2024. It will ensure that by January 2025 you have a handy sum set aside to pay for any large purchase you have set your heart on, and maybe treat yourself to a post-Christmas holiday as well!
Please let me know if you decide to take the Penny Challenge by posting a comment below. And, of course, if you have any other comments or queries about it, feel free to post them also.
Note: This is an updated version of a sponsored post for which I received a fee.
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As is customary for bloggers at this time of year, here are the top twenty posts on Pounds and Sense in 2023, based on comments, page-views and social media shares. They are in no particular order. I have excluded any posts that are no longer relevant.
I hope you will enjoy revisiting these posts, or seeing them for the first time if you are new to PAS.
All posts in the list below should open in a new tab/window when you click on the link concerned.
I’ll be taking a break from blogging over the festive period (though I’ll still be around on X/Twitter and Facebook). I’ll therefore close by wishing you a Very Merry Christmas (strikes and cost-of-living crisis permitting) and for all of us a brighter, more prosperous new year 🍾
If you have any comments or questions, of course, feel free to leave them below as usual.
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For the second winter in a row, some energy companies are offering incentives to customers to reduce their electricity use during periods of peak demand. Payments are made to those who succeed in doing this.
Most large energy companies – and some smaller ones – are running schemes, though some by invitation only. At the time of writing they include British Gas, EDF, Octopus Energy, E-on, OvoEnergy, Shell Energy, Scottish Power and Utilita. You can see a regularly updated list on this page of the Moneysavingexpert website.
If you aren’t with one of these companies, however, you may still be able to benefit by signing up with an app-based service such as Loop Energy or Power Rewards.
Don’t, though, be tempted to sign up for more than one scheme at a time. That is against National Grid’s rules and could see you being banned from receiving ANY payments.
This programme is part of a broader initiative from the National Grid Electricity System Operator (ESO), the organization responsible for transporting electricity around England, Scotland and Wales and keeping homes and businesses powered. The aim is to balance supply and demand, thus reducing the need to fire-up fossil-fuel plants and (in the worst case) avoiding power cuts.
During cost-cutting events, National Grid ESO pays participating suppliers a certain amount for each unit (kWh) of electricity saved by any of their users signed up to schemes. Suppliers then pass some or all of this payment on to customers.
One thing all schemes have in common is you must have a smart meter capable of sending half-hourly readings. Smart meters are of course somewhat controversial, and for various reasons not everybody wants one. If you wish to benefit from this particular opportunity, however, having a smart meter is essential. For the record I do have a smart meter and believe it has saved me money. But I do of course respect those who have differing views about this.
How It Works
To make money from these schemes you will be asked to reduce your electricity (not gas) consumption during certain periods. This is most commonly around the evening peak time of 4 pm to 7 pm, but exact times vary depending on the supplier concerned and the needs of National Grid.
The duration of events varies but in my experience is typically an hour or 90 minutes. But I understand they could be anywhere between 30 minutes and three hours.
You are unlikely to make a fortune from these schemes, but could earn up to £100 (or more) over the course of the winter. Payments vary from around £2.50 to £4.50 per unit (kWh) saved, the rate depending on what National Grid is paying. The actual rate you receive will also depend on how much of the payments from National Grid your supplier chooses to pass on.
One other important point is that you may be expected to reduce your usage by a certain minimum amount (e.g. 40%) from your average in order to receive a payment. If you cut your usage by less than this, unfortunately you may not qualify for any payment on that occasion.
You will be required to opt in to the scheme run by your energy supplier (or other provider). You will likely also have to opt in to specific energy-saving events, with advance notifications sent via email and mobile phones.
How to Maximize Your Returns
Here are a few tips and ideas for cutting your electricity use during power-saving events and maximizing the returns you receive…
Turn off as many lights as possible, including outside lights (easily forgotten).
Turn off all mains-powered computers, printers and other electronic devices (again, easily forgotten).
Avoid cooking with electricity during events.
Avoid using other high-energy-consumption devices such as dishwashers and washing machines.
Obviously, avoid using electric heating if possible. If there’s no alternative, heat up the room/s you will be in beforehand and close all doors, windows and curtains to keep the warmth in.
Avoid taking electric showers while events are in progress.
Be sure no electrical devices have been left on to charge.
Switch off the TV and watch instead on your laptop/tablet using its internal battery.
Avoid boiling the kettle as this uses a lot of electricity (albeit for a short period). Make a flask of coffee/tea beforehand and drink from that during the event.
Avoid opening fridge/freezer doors during events. But you can also switch off fridges and freezers entirely to save more. This should be perfectly safe for up to three hours.
If it’s feasible, arrange to go out during some or all of the power-saving event. This is the easiest way to save as much electricity as possible!
Create a checklist of things to do at each event to save power. You can also use this after the event to ensure you remember to turn things like fridges and freezers back on again.
One other slightly left-field idea is to use high-energy devices such as washing machines and electric cookers MORE during evening peak times when there isn’t a power-saving event happening. That will boost your average energy consumption at this time, giving you the opportunity to save more when a power-saving event comes along. Obviously you shouldn’t use high-energy devices more than you would overall. But if you can shift your usage to peak times when power-saving events are typically scheduled, this should help you save more when events occur.
I hope this post has given you some ideas for how to maximize your returns from these schemes. As always, if you have any comments or questions, please do leave them below. I’d also be very pleased to receive any other tips for making more money from power-saving events.
Don’t forget, you can also get a FREE £50 credited to your energy account when you switch to EDF Energy via my affiliate link. Terms and conditions apply.
This is a fully updated version of my original 2022 post on this subject.
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A quickie today spotlighting a site that I know will be of interest to many readers of this blog. Coincidentally, it’s run by a near-neighbour of mine in south Staffordshire.
As the name suggests, Over 60s Discounts lists discounts, deals, vouchers and concessions for people in the UK aged 60 and over. Many of these are exclusive to Over 60s Discounts.
Over 60s Discounts operates on a membership basis, but the good news is that it is free to join. Once you are registered, you will be able to browse the latest discount offers on the website and also have them sent to you by email. If you see an offer you like, all you have to do is click ‘Get Code’. You will then be provided with a voucher code to use at checkout on the brand’s website. Printable vouchers and e-vouchers, which you can use in-store, are also provided.
There are some great deals on offer, as you can see from the sample selection below.
If you’re 60 or over, I highly recommend checking out Over 60s Discounts. It’s a new website and obviously still evolving, but already it offers an impressive range of deals, discounts and concessions. If you’re looking to make your money go a little further in the current cost-of-living crisis, it will definitely help you achieve this.
As always, if you have any comments or questions about this post, please do post them below.
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Today I’m reviewing an app called JamDoughnut which can help you save money on your shopping.
What is JamDoughnut?
JamDoughnut is an instant cashback app that allows users to earn cashback when they spend money with over 150 leading supermarkets, restaurants and shops (see sample screenshot below).
Rather than cashback on specific purchases (as with sites like Quidco), you get cashback of up to 20% when you purchase gift cards from retailers on the app. These gift cards can then be used just like money, both online and in-store (in most cases).
How Does It Work?
The first step is to download the JamDoughnut app to your mobile phone from Google Play for Android or the Apple iStore. Open the app and follow the instructions to create an account (don’t forget to enter my referral code GBGN to get a 200 points [£2] bonus – see below). This should only take a couple of minutes.
Then check the list of retailers on the app and find one you shop with regularly. Most of the big supermarkets (with the exception of Waitrose) are included, for example.
You can even get cashback on Amazon gift cards, though admittedly only at a rate of 1% at the time of writing.
Once you have found a suitable retailer, buy a gift card for that retailer using the app. This is straightforward and you can get cards of up to £100 in value.
Once your gift card purchase has gone through, cashback will be credited to your account in the form of points (100 points = £1). In my experience this normally happens instantly. Once you have earned 1000 points, representing £10 cashback, you can withdraw the money to your bank account.
Note that there is a standard 30p transaction fee when making a withdrawal via bank transfer, and more than that if you use Apple Pay or Google Pay (so I don’t recommend doing that). So it may be best to let cashback build up a bit before withdrawing, to reduce the impact of the transaction fee. Alternatively you can withdraw in the form of a gift voucher (e.g. an Amazon voucher). In that case no charges are payable and you also get bonus points added to your account 🙂
In most cases, as mentioned, you can use gift cards either online or in-store. In the latter case, you can show/scan the code on your mobile phone at the checkout, or you can take a printed version with you and use that.
You can use gift cards for full or part payment. If you don’t use the whole amount on the gift card in one go, you can use what remains towards another purchase at a later date.
Other Benefits
Another attraction of JamDoughnut is that you can use the app in addition to your existing cards and loyalty programme points, allowing you to earn and/or save even more.
In addition, JamDoughnut offers a range of other benefits. These include a daily £100 (10 x £10) giveaway, free competitions, ‘Jammy Deals’, double discounts, and more. These are all listed on the ‘Daily Doughnut’ page of the app (see below).
Finally, if you’re so inclined, you can invite friends and relatives to join JamDoughnut using the ‘refer-a-friend’ scheme. If someone signs up using your referral code (see below), not only will they get an extra 200 points (worth £2) when they buy their first gift card, you will receive a bonus as well when they cash out for the first time (400 points, equivalent to £4).
Special Bonus Offer
Speaking of which, if you download the JamDoughnut app via this blog post and enter my referral code GBGN when requested, then (as mentioned above) you will get an extra 200 points (£2) when you use the app to buy a gift card for the first time – bringing.you that much closer to receiving your first £10+ cashback payment!
Closing Thoughts
In summary, I think JamDoughnut is a great little app and I have been pleased to add it to my armoury of money-saving tools and resources.
I do most of my grocery shopping at my local Morrisons, which is currently offering 4% cashback on JD gift card purchases – so in effect I am getting a 4% discount on all my shopping there.
And I am still getting all the benefits of my Morrisons Card too, including special discounts and regular £5 vouchers. In these challenging times, this really does help my money go a little bit further 🙂
As always, if you have any comments or questions about this JamDoughnut review, please do leave them below.
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A quickie today to let you know that until the end of August 2023, you can get a massive 25 percent off the cost of a new English Heritage membership if you pay by annual direct debit. This applies to all types of membership, including Over-65s (which is already discounted).
English Heritage looks after nearly 400 historic sites and buildings across England, including Stonehenge, Hadrian’s Wall, Dover Castle, the Iron Bridge in Telford (see cover photo), and more. Members get free admission to all properties. Other benefits include free parking in car parks owned by English Heritage, free or reduced-price admission to hundreds of special events, and free entry to properties for up to six children per member. You also receive a free members’ handbook and a magazine (published three times a year).
A further attraction of joining English Heritage is that they have reciprocal arrangements with Scottish Heritage and CADW in Wales. Members therefore get reduced or free admission to most properties owned by these organizations as well.
You can get current membership prices from the English Heritage website. Family, Joint, Individual and Lifetime memberships are available. To claim the current special offer discount, you have to enter the code IMAGINE50 on the online form when applying.
In my case I qualified for Over-65 membership. This would normally cost £63 a year, but with my 25% discount it was reduced to £47.25. Of course, the discount price is for one year only, but you can always cancel the direct debit before it’s due to renew if you wish.
There are various English Heritage sites near where I live. Later this week I am planning to visit Boscobel House in Staffordshire, which is only around 30 minutes’ drive from where I live. Although I have only just joined, I received a temporary membership card by email prior to my full membership pack arriving in the post. So I will be saving at least £11 straight away!
I duly visited Boscobel House on Thursday 18 August. My temporary membership was accepted without quibble, so I saved £11 on admission and also £3 on parking. I also discovered another benefit of English Heritage membership which I couldn’t see mentioned on the website. Once you have been a member for a year or more, you qualify for a 10% discount on any purchases in their shops or tea rooms.
English Heritage obviously has some similarities with the National Trust, but it’s an entirely separate organization and only operates in England (though see my comments above about reciprocal arrangements with organizations in Wales and Scotland).
I know from messages on social media that some people have been deterred from joining or rejoining the National Trust due to their controversial stance on some current issues (see this article, for example). So far anyway, English Heritage seem to have stuck to their core remit of looking after heritage sites and properties and avoided divisive political messaging. For those who have resigned from the National Trust or no longer wish to join, English Heritage may therefore offer an attractive alternative. Of course, there is nothing to stop you joining both if you wish!
As always, if you have any questions or comments about this post, please do leave them below.
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Today I’m sharing a sideline money-making opportunity that – if you’re in a position to do it – can bring in a steady income for very little effort.
The shortage of parking spaces in many towns and cities has created an opportunity for anyone who has a driveway (or garage) they aren’t using all the time.
One of the best-known operators in this field is JustPark. Through their website and mobile app, they put drivers in touch with home-owners and businesses who have parking spaces (and/or EV charging spaces) available near their destination. They say they help over 10 million drivers a year find parking spaces at over 45,000 UK locations.
Listing your space is free and you can set your own price based on how long the driver wishes to stay. JustPark will suggest an appropriate price based on your location and the facilities you are offering, but you aren’t obliged to accept this.
JustPark charges space-owners a 3% fee on one-off bookings (so if you charge £10 they will take 30p, meaning you receive £9.70). For longer term or rolling bookings over two months, they charge space-owners a higher fee of 20% for the first month, with the fee reverting to the standard 3% after that.
JustPark also make money from drivers, adding up to 25% of the space-owner’s asking price to the fee charged. They say, however, that charges to drivers are still typically 30% lower than ad hoc street parking (if you can find it), which makes the service attractive to motorists as well.
One big attraction of JustPark is that they handle all the admin on your behalf. All payments are made via the website, and space-owners can withdraw earnings via PayPal or direct to their bank account. JustPark also ensure you still get paid even if the booker doesn’t turn up.
JustPark say that the money you earn from renting out your parking space is included in the property trading income allowance introduced by the government in April 2017 – so you can make up to £1,000 per year completely tax-free (and no need to declare it to the taxman).
All drivers using the service have to register on the site, so you know exactly who will be using your space on any given day. There is also a rating system so you can see any comments other users of the service have made about them. Space-owners are also rated by drivers, incidentally.
You can offer spaces by the day, week or month, and set any restrictions you wish on when your space is available. Anyone is welcome to advertise spaces on JustPark, but the locations in most demand are those near airports, stations and stadiums, and in major cities. According to one recent article in the Daily Mail, people in such areas are making more than £4,000 a year doing this. Even if that doesn’t apply to you, though, you can still earn from a few hundred pounds a year to £1000 or more by this means.
Obviously the pandemic and working from home reduced demand for parking spaces. But with life returning to normal now, demand for parking spaces is steadily increasing again.
Of course, if you don’t have a suitable space to offer, you won’t be able to benefit from this opportunity. You could still use JustPark to save money on your own parking costs, though. Either way, the service is well worth checking out 🙂
Another option for cheaper parking is Your Parking Space. Over 60s can get an exclusive 10% discount on this service through my friends at Over 60s Discounts.
Disclosure: As well as being a registered user of JustParkI am an affiliate for them and will therefore receive a small commission if you click through any of my links and sign up. This will not affect the money you earn through the site and/or any savings you make if you use them to find parking spaces.
Cover image by courtesy of BingAI.
This is a fully revised and updated version of my original article on this subject.
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I’ll start as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).
As the screenshot below for the year to date shows, my main Nutmeg portfolio is currently valued at £21,044. Last month it stood at £20,419 so that is a rise of £625.
Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,293 compared with £3,175 a month ago, an increase of £118. Here is a screen capture showing performance since the start of this year.
This has clearly been a better month for both my Nutmeg pots. Their total value has risen by £743 or 3.15% month on month. Since the start of 2023 the net value of my Nutmeg investments has grown by £1,417 or 6.18%.
Of course, all investing is (or should be) a long-term endeavour. Over a period of years stock market investments such as those used by Nutmeg typically produce better returns than cash accounts, often by substantial margins. But there are never any guarantees, and in in the short to medium term at least, losses are always possible.
Also, as you may know, both my Nutmeg pots have quite high risk levels (9/10 main, 5/5 Smart Alpha). If you haven’t yet seen it, you might like to check out my blog post in which I looked at the performance over time of Nutmeg fully managed portfolios at every risk level from 1 to 10 . I was pretty amazed by the difference risk level makes, with higher-risk ports over almost any period of three or more years in the last ten generating significantly better overall returns. If you are investing for the long term (and you almost certainly should be) choosing a hyper-cautious low-risk level might not therefore be the smartest strategy. The one exception is if you plan to withdraw your money soon and don’t want to risk losing too much if there is a sudden downturn.
You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my overall experience over the last seven years, they are certainly worth considering. They offer self-invested personal pensions (SIPPs) and Junior ISAs as well.
Moving on, my Assetz Exchange investments continue to generate steady returns. Regular readers will know that this is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.
Since I opened my account, my AE portfolio has generated a respectable £124.53 in revenue from rental income. As I said in last month’s update, capital growth has slowed, though, in line with UK property values generally.
At the time of writing, 12 of ‘my’ properties are showing gains, 2 are breaking even, and the remaining 12 are showing losses. My portfolio is currently showing a net decrease in value of £15.53, meaning that overall (rental income minus capital value decrease) I am up by £109. That’s still a decent return on my £1,000 and does illustrate the value of P2P property investments for diversifying your portfolio. And it doesn’t hurt that with Assetz Exchange most projects are socially beneficial as well.
Obviously the fall in capital value of my AE investments is slightly disappointing. But it’s important to bear in mind that unless and until I choose to sell the investments in question, it is largely theoretical. The rental income, on the other hand, is real money (which in my case I have chosen to reinvest in other AE projects to further diversify my portfolio).
I also spoke to the CEO of Assetz Exchange, Peter Read, recently. He made the point that capital values on the platform simply reflect the latest price at which shares in the property concerned have changed hands on their exchange. They do not represent objective or independent valuations of the properties. If you are investing long term with AE, the annual yield from rentals is really a much more important consideration.
Peter also made the point that the current high inflation rate has actually been beneficial for Assetz Exchange investors. That is because properties on the platform generally have an annual review when rentals are increased in line with inflation. That means from the end of the financial year in April, rentals have increased in most cases by around 10%. Assetz Exchange recently published a blog post about this which is worth a read.
To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as i am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.
Another property platform I have investments with is Kuflink. They continue to do well, with new projects launching every week. I currently have around £2,500 invested with them in 17 different projects. To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question.
My loans with Kuflink pay annual interest rates of 6 to 7.5 percent. These days I invest no more than £200 per loan (and often less). That is not because of any issues with Kuflink but more to do with losses of larger amounts on other P2P property platforms in the past. My days of putting four-figure sums into any single property investment are behind me now! Nowadays I mainly opt to reinvest the monthly repayments I receive from Kuflink, which has the effect of boosting the percentage rate of return on the projects in question
Obviously a possible drawback with Kuflink and similar platforms is that your money is tied up in bricks and mortar, so not as easily accessible as cash savings or even (to some extent) shares. They do, however, have a secondary market on which you can offer any loan part for sale (as long as the loan in question is performing and not in arrears). Clearly that does depend on someone else wanting to buy it, but my experience has been that any loan parts offered are typically snapped up very quickly. So if an urgent need arises, withdrawing your money (or part of it) is unlikely to be an issue.
You can read my full Kuflink review here. They offer a variety of investment options, including a tax-free IFISA paying up to 7% interest per year with built-in automatic diversification. Alternatively you can build your own IFISA, with most loans on the platform being IFISA-eligible.
Until 31 July 2023 Kuflink are offering enhanced promotional rates of up to 9.73% (gross annual interest equivalent rate) for their Auto-Invest products (IFISA-eligible). There is limited availability for this offer and it may be withdrawn any time before 31 July 2023 if the limit is reached. For more information, click here [affiliate link].
Last year I set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (then about £412) copying an experienced eToro trader called Aukie2008 (real name Mike Moest).
In January 2023 I added to this with another $500 investment in one of their thematic portfolios, Oil Worldwide. I also invested a small amount I had left over in Tesla shares.
As you can see from the screen capture below, my original investment of $1,022.26 is today worth $1,153.25, an overall increase of $130.99 or 12.81%. in these turbulent times I am very happy with that.
Since last month the price of my Tesla shares has risen substantially and my copy trading portfolio with Aukie2008 has also done well (though less spectacularly). My most recent investment in Oil Worldwide has risen a bit this month but it’s still slightly down on when I invested. The Oil Worldwide portfolio has just been rebalanced by eToro, so I am hoping for better things in the months ahead
eToro also recently introduced the eToro Money app. This allows you to deposit money to your eToro account without paying any currency conversion fees, saving you up to £5 for every £1,000 you deposit. You can also use the app to withdraw funds from your eToro account instantly to your bank account. I tried this myself recently and was impressed with how quickly and seamlessly it worked. You can read my blog post about eToro Money here.
I had two more articles published in June on the excellent Mouthy Money website. The first was 10 Great Ways to Save Money on Amazon. Amazon is Britain’s – and the world’s – favourite online store. Prices on Amazon are generally competitive, but over the years I’ve discovered a variety of ways to ensure you get the best value for money from them. So in this article I set out my top ten tips for saving money on Amazon
My other article was Do You Need a Personal Financial Adviser? In this article I discuss the different types of financial adviser and what they do. I also revealed why – despite being a money blogger and considering myself reasonably financially savvy – I have a personal financial adviser myself.
As I’ve said before, Mouthy Money is a great resource for anyone interested in money-making and money-saving I always look forward to reading the articles by my fellow contributors. Shoestring Jane is a particular favourite and I enjoyed reading her recent article concerning how you can Save Money by Reducing Food Waste.
I also published several new posts on Pounds and Sense in June. One of these was My Short Break in Bath. Bath is, of course, a historic city on the River Avon, about 12 miles from Bristol. I went there for three days in June, the first time I had been for over 30 years. In my post I discuss the self-catering apartment where I stayed and reveal some of the things I did and saw. I also share a few top tips for visitors to Bath. The cover image shows the famous Pulteney Bridge, one of Bath’s best-known landmarks.
I also published a post based on a survey of Britons’ investing habits. This addressed questions such as what are the main barriers stopping people investing and where do people get their investment advice from. I thought the results were quite eye-opening. Take a look if you haven’t already.
Finally, I wanted to highlight that the free share offers described in last month’s update are both still open if you haven’t done them yet. The opportunity to Get a Free Share Worth up to £100 with Trading 212 was reopened after closing briefly. It is now on offer till 27 July 2023.
The opportunity to Get a Free ETF Share Worth up to £200 with Wealthyhood is also still open but the terms have changed slightly. To remind you, Wealthyhood is a DIY wealth-building app aimed especially at people who are new to stock market investing. As from 1 June 2023 they changed their fee structure to make it (even) more attractive to small investors. They have now increased the minimum investment to qualify for the free share offer from £20 to £50 – but on the plus side, they guarantee that your free ETF share will be worth at least £10.
That’s all for today. I hope you’re enjoying the summer months and taking the opportunity to get out and about in our beautiful country (or further afield).
As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers
Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.
Note also that posts may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!
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Today I am sharing some interesting data from my friends at HSBC regarding British people’s investing habits.
This information comes from a survey conducted last year by Sticky and Censuswide on behalf of HSBC. The survey was conducted online, with a total sample size of 2018 adults. It reveals how and why people in the UK are investing, and (very importantly) why many are not.
The research revealed that nearly two-thirds of people had some form of savings (64%), with more than one in three (36%) saying they had investments. Nearly half (47%) believed investing was a better way of achieving future financial goals in the current financial climate.
More than half of people (53%) who said they would like to invest but haven’t yet said they didn’t know how to begin. Just over 1 in 3 Brits are currently investing, so almost two-thirds are not.
Saving vs Investing
Somewhat reassuringly, two-thirds of people in the survey said they currently have savings (64%) and just under three-quarters (72%) said they have enough money put away to cover three months’ living expenses despite increases in the cost of living.
The main reasons people have for saving and investing are summed up in the infographic below…
As you can see, nearly half of people in the HSBC survey (46%) didn’t have a particular goal for their saving or investing – but those who did have a target were much more likely to be saving for something long-term (37%) like a house deposit or their retirement than short-term goals like holidays or other large purchases (20%).
In general, of course, saving for short-term goals is best done through cash savings accounts – but for long-term goals, typically five years or more ahead, investing is likely to produce better overall returns.
Investment Choices
The infographic below shows the main ways people in the UK are currently investing.
As you can see, the most popular investment is stocks and shares (44%), followed by funds (25%), bonds (20%) and property (19%).
When people were asked how they’d decided to invest, the most common reason given for choosing stocks and shares was the expectation of good returns (34%). Bonds were most often seen as a “safe” investment (38%).
Meanwhile, the reason for choosing funds was more equally balanced between being seen as offering good returns (34%) and being “safe” (30%), with the same being true of property (39% good return, 35% “safe”).
Barriers to Investing
When people were asked why they hadn’t chosen to invest, the most common answer (45%) was thinking they didn’t have enough money to do so. But nearly a quarter (23%) said they didn’t know enough about how to invest, ahead of the one in five (21%) who said they would worry about losing all their money.
For those who said they were scared of losing money, the main driver of those worries was the fact that investments can go down as well as up (40%). But that was followed by concerns about the need for access to their cash – with 37% saying they might need their money at short notice, and another 30% stating that their financial situation meant they couldn’t lock away money for a long time.
Those who chose to invest in jewellery and alternatives (wine, art, whisky, etc) were the most likely to say they had done so because they had expertise in that area (25%).
Investment Knowledge
When it comes to detailed financial knowledge, more than one in three (34%) said they didn’t feel they had enough information about investing. And those who wanted more help with their financial planning were most likely to need information about where to invest (25%), followed by support on types of investments (22%), the cost of investing (20%), and which investments are more or less risky (20%).
People who said they already received some information on investing were most likely to get that from their family (17%), their bank (16%), friends (15%) and social media (15%) – all ahead of financial newspapers (13%) and financial blogs (11%).
Nearly a quarter (24%) said they’d like to receive more information about investing from their bank as the primary source of information, ahead of getting help from investors (16%), social media (13%), family (11%) and financial blogs (11%) or financial newspapers (11%).
My Thoughts
Many thanks to my friends from HSBC for allowing me to share and discuss their data and graphics.
I’m not surprised that many people are wary of investing, as the subject isn’t generally taught in schools and the huge number and variety of potential investments can be bewildering.
What I find a little more surprising (and concerning) is that many more people have investments in the form of stocks and shares (46%) rather than funds (25%). I suspect this may partly be to do with people having a few shares they acquired from the big privatizations of the past such as BT and British Gas. There may also be a number who have shares through employee share schemes. Nonetheless – as I said in this recent guest post for the popular Money Talk blog – as an investment individual shares are a lot more volatile and risky. If you are new to investing, I highly recommend starting off with a collective investment such as a tracker fund or robo-adviser platform (see below). This will give you much broader diversification, which helps mitigate the risks involved.
As I’ve said before, if you suddenly find yourself in possession of a large lump sum (perhaps through an inheritance) there is a strong case for seeking advice from a trained and experienced independent financial adviser. You might like to check out my blog post on why, despite being a money blogger and considering myself reasonably financially savvy, I still have an IFA myself.
If you just want to get started in investing, there are various low-cost and relatively low-risk options you could consider. Regular readers will know that I am a fan of the robo-adviser platform Nutmeg, with whom I have been investing since 2016. Even with the recent turmoil in the markets caused by the pandemic etc., I have made an overall return of 37 percent from my investments with them. You can read my in-depth review of Nutmeg here if you wish.
Another possibility might be the wealth-building platform Wealthyhood, which is aimed especially at novice investors. You can get started on this with as little as £20 – and right now they are offering a free ETF share worth up to £200 to new investors, which should get you off to a good start! You can see my blog post about Wealthyhood and their special offer here.
Of course, all investing carries a risk of loss, in the short- to medium-term especially. You should therefore always do your own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed.
As always, if you have any comments or questions about this post, please do leave them below.
Disclaimer: I am not a professional financial adviser and nothing in this post should be construed as personal financial advice.
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Regular readers of PAS will know I have a particular interest in P2P/crowdlending investment. Such platforms offer the opportunity to invest in loans to businesses or individuals and profit from the interest charged to borrowers.
With savings account interest rates still quite low, many investors are looking for better returns on their savings and investments. If that applies to you, European crowdlending platform Nibble is worth a look.
What is Nibble?
Nibble is a crowdlending platform launched in 2020 by IT Smart Finance, a company with over five years’ experience developing innovative products in financial technology. They offer a range of investment products which you can read about on the Nibble website. Today I am focusing on their latest offering, called the Legal Strategy.
What is the Legal Strategy?
The Legal Strategy offers the highest potential return of all the investment options on Nibble. The loans in question are in default and facing legal action (hence the name, of course).
For investment portfolios offered through the Nibble Legal Strategy, collection and litigation management are performed by Boostr. This is a company that buys overdue loans from banks and MFOs (Multiple Facility Organizations) at auctions at a typical discount of 85%, and automates the process of extra-judicial and legal recovery.
Nibble say that thanks to the deep experience and technologies developed by Boostr, it is possible to achieve a high percentage of capital return. The company draws on more than five years of successful experience in the area of debt recovery.
The Legal Strategy terms for investors, copied from the Nibble website, are shown below.
As you can see, the Legal Strategy comes with a deposit back guarantee. This is a guarantee to return the full investment amount at the end of the investment period and a minimum yield of 8% per year. The actual yield paid will depend on how successful recovery efforts prove, so you may end up with an annual return of anywhere between 8% and 14.5%. As you will probably know, this is above the average in the collective financing industry.
The minimum investment in Nibble’s Legal Strategy is €10 (about £8.70 at current exchange rates) and the maximum is €10,000. The platform has an auto-investment tool, allowing trading to be fast and straightforward. You aren’t required to choose individual loan portions, as this is all handled by the company. You simply choose your investment strategy based on the timescale over which you wish to invest and the level of risk you are comfortable with.
What Are the Risks?
No investment is without risk, but Nibble have gone to some lengths to keep this as low as possible. You can read a detailed article on this page of the Nibble website (warning: it is quite long!).
For investors in the new Legal Strategy, your money is invested in a portfolio comprising a large number of loans. The risk is therefore controlled and managed, as if any loans prove irrecoverable they will normally be offset by others that are successfully recovered (with interest and penalties).
As stated above, the risk is shared between the investor and the platform in the form of a variable interest rate. The rate paid is calculated automatically by Nibble every 90 days based on how the loan portfolio in question is performing. So every 90 days investors receive interest of between 8% (the guaranteed minimum) and 14.5% (the maximum). The actual rates paid can therefore vary from one quarter to another. Nibble say that average payouts currently are around 12.5% (this corresponds with my own experiences to date as a Legal Strategy investor).
If, for example, you invested €1000 in the Legal Strategy over 12 months, you could expect to receive anywhere between €80 and €145 in interest over the 12 month period, along with the return of your initial capital.
This is a fixed term investment, so it may be best to avoid if you think you might need the money back urgently before the end date. However, Nibble do say that if you change your mind, you can withdraw money from your portfolio ahead of schedule. They say they will find a new investor for your portfolio for a small commission fee.
The other risk, obviously, is that the platform itself will go bust. For various reasons set out on the Nibble website this appears unlikely, but of course it’s not impossible. If that were to happen, you would not be covered by the Financial Services Compensation Scheme (FSCS) which covers deposits in registered UK savings institutions up to £85,000. Nibble say that in the worst case scenario ‘a management company will be assigned to help the investor to recover funds in accordance with the rights of claim against the borrower. In addition, there is always a reserve fund which serves as an additional “safety airbag” for the investor.’
Finally, as loans are currently all in euro, UK investors will of course have to contend with exchange rate fluctuations. These could work for you or against you.
How Do You Get Started?
If you wish to invest via Nibble, the first thing you will need to do is set up an account via the Nibble website.
As Nibble is a European operation, you will need to invest in euro and your returns will be paid in this currency. That obviously adds a layer of complication for UK residents, but there are various ways around this. If you have a UK bank account you will normally be able to make (and receive) payments in euro, but may be charged a NSTF (Non-Sterling Transaction Fee).
You could use your own bank to fund your account initially, but if you become a regular investor with Nibble you might want to use a service/account that charges lower fees. You could use a money transfer service such as Paysera or Wise (formally TransferWise). These will enable you to transfer funds between Nibble and your own bank account with (potentially) lower charges and a more favourable exchange rate.
Another option would be to open a euro account with a provider such as Starling. This will allow you to receive and make payments in both sterling and euro, again at a lower overall cost.
My Experience
I wanted to try out Nibble myself,so I set up an account with them a while ago. The process was quick and straightforward. You just click on Create Account at the top of the Nibble homepage and follow the online instructions.
You are required to complete a short verification process before opening your account. This involves taking a photo of your passport, driving licence or some other form of ID, along with a selfie. You may use your mobile phone camera for this. It all worked smoothly and seamlessly in my case, and within a couple of minutes my application had been verified and approved.
After that, it is just a matter of making your initial deposit and deciding which of the strategies you want to use. Initially I chose their Classic Strategy as a low-risk test and everything went as promised. More recently I invested €100 in the Legal Strategy. This has also been running smoothly, with interest payments credited quarterly as promised.
Closing Thoughts
If you are looking for a more exciting home for some of your cash that allows you to take advantage of the higher interest rates on offer in continental Europe, Nibble is worth checking out.
The new Legal Strategy offers the highest rate of return of all their strategies. Of course, with higher returns typically come higher risks, and you do need to be comfortable with this. It is also important to note that with the Legal Strategy rates paid may vary over the period of your investment (though with an 8% guaranteed minimum).
The website’s ease of use is another attraction, as is the fact that Nibble doesn’t impose any fees or charges on investors. You do just need to bear in mind the need to switch between pounds and euro and the importance of minimizing the costs associated with this.
As a company based in Spain, NIbble doesn’t have too many UK reviews, but those that I have seen are generally positive. On the popular independent Trustpilot website, they have 11 reviews in total, six with 5 stars (‘Great’) and three with 4 stars (‘Very Good’). There are two 1-star reviews which reduce their average somewhat. These relate to difficulties withdrawing money. Nibble have replied to both and it appears that the problems arose due to the way the banks operate rather than being any fault of Nibble themselves. It also appears that the issues were satisfactorily resolved.
Obviously, nobody should put all their money into Nibble’s Legal Strategy, but it is worth considering within a diversified savings and investments portfolio. You should also bear in mind that your money won’t be protected by the Financial Services Compensation Scheme (FSCS), which protects deposits of up to £85,000 in most UK bank accounts. Of course, P2P/crowdlending platforms in the UK are not generally covered by the FSCS either.
I will continue to report on Pounds and Sense about how my Nibble investments fare.
New! Cashback Bonus. Until 31 July 2023 Nibble are offering a 2% cashback bonus for all new investments in their Legal Strategy. Visit their website for more info.
As always, if you have any comments or questions about this post, please do leave them below.
Disclaimer: I am not a qualified independent financial adviser and nothing in this post should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing and seek professional advice if unsure how best to proceed. All investing carries a risk of loss. Note also that this review includes my affiliate (referral) links, so if you click through and end up investing with Nibble, I may receive a commission for introducing you. This will not affect the price you pay or the product/service you receive.
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