Unless you’ve pulled the plug on societal interactions, in favour of a life of seclusion in a monastery… you’ll need to deal with money, in some form.
And given how hard we work to earn it, when we stash our money away for the future, it’s essential that we can do so, safe in the assurance that it’ll be there when we come to retrieve it… maybe even with a little extra.
Whether you’re just trying to budget to make it through the week or you’re already working on your personal pension plan, it’s important to know the different ways that your money is protected 🔒
What does protecting your money mean?
When we talk about protecting your money, what we really mean is, even if something happens to one of our providers, banks, or Plum (don’t worry though, we’re not going anywhere!) you can still get your money and savings back safely.
There are plenty of banks and money saving apps out there, and we can’t advise you where the best place is for your money. But what follows is an outline of the various ways that it’s protected with us at Plum👇
How your Plum Account is protected (excluding Interest Pockets)
Your Primary Plum Pocket is, by default, where your money is first set aside. If you’re a Plum Pro or Plum Ultra subscriber you can create and customise extra Pockets, but this section only relates to those Instant Access Pockets (Pockets which pay interest are covered later).
Whichever tier of Plum you use, we ensure that from the moment money enters your account, safeguards are in place to keep it safe for you 🤝
Plum uses an Electronic Money Provider to administer an E-Wallet for you (this contains any money stored in non interest bearing pockets). Our provider maintains a specific UK customer bank account for all Plum customers, which is protected by the E-Money Safeguarding Rules.
At Plum, we pick our providers very carefully, and will only work with reputable companies with a proven track record and a healthy financial position. So while we don’t foresee either Plum or our providers ever being in this situation, if either Plum or our E-Money Provider were to go out of business, you can make a claim to get your money back.
How your investments are protected with Plum
When you make an investment through Plum, you’re using your money to buy part of a fund through our Investment Provider 🌱
A fund is like a big pot of money that is controlled by professional investment managers. They decide which individual businesses should be in the fund, to try and grow the pot whilst also meeting other objectives, such as a focus on a particular sector or geographic region 🌍
Whilst the value of your investment will naturally fluctuate according to market forces, we protect your share of the fund. That means if anything happens to us, or our investment provider, you will still be able to get your investment back or sell it according to its value.
With investments, and unlike the money in your Plum Account (which is ultimately money in a bank), your share of the fund is safeguarded by a regulated custodian, whose job it is to keep your shares safe 👮
Just like your Plum Account though, should anything happen to Plum or our provider, your share will be passed back to you, and can’t be touched by anyone that we or the provider may owe money to.
What happens if the custodian fails, you ask? 🤔 In this case you could benefit from the Financial Services Compensation Scheme (“FSCS”).
The FSCS is a government backed scheme that seeks to protect your money if an investment firm collapses, up to the value of £85,000. The FSCS offers different levels of protection (and not all may apply to you), but you can find more info about your rights and protections on their website.
Your capital is at risk when you choose to invest, because the value of these funds can go down as well as up. However, you can be assured that we keep your share of the overall pot safe at all times!
How your Plum Interest Pockets are protected
If you would like to earn a return on your money, but without the risks of investing, you will soon be able to create a Pocket that yields interest 📈
Although Interest Pockets are available to all Plumsters, we’ve reserved the best rate for our Plum Plus, Plum Pro and Plum Ultra subscribers.
Money saved with Plum in these Interest Pockets is held on Trust with a UK Bank (Investec). A Trust is a legal mechanism which means we can look after your money, but legally it never stops belonging to you. Protection in these Pockets is equivalent to that in a high street bank.
And because Plum handles many customer’s money, it means we can harness administrative efficiencies and potentially negotiate a better interest rate than the one offered by your own bank on the high street 🏦
If anything were to happen to Plum then the bank can return your money to you directly. And should something happen to the bank itself, then (because you are still the legal owner of the money) you could benefit from the FSCS and claim up to £85,000 of your money back from the bank, if the scheme applies to you.
If you'd like to learn more about Plum then you can check out our website.