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 back safely.
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 👇
Plum Account (excluding Interest Pockets)
Your Primary Pocket is where your money is first set aside with Plum. If you’re a Plum Pro subscriber you can create and customise more Pockets too, but this section only relates to those standard ‘Instant Access’ Pocket types, as opposed to Pockets which pay interest (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 set up and 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.
If either Plum or our E-Money Provider were to go out of business, you can make a claim to get your money back. We don’t foresee either Plum or our providers ever being in this situation, but because we know just how important your money is, we do everything in our power to keep it safe for you.
At Plum, we pick our providers very carefully. We will only work with reputable companies with a proven track record and a healthy financial position.
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 basically 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 any other objectives, such as a focus on a particular sector or geographic region 🌍
The key thing is that whilst the value of your investment will naturally fluctuate according to market forces, we protect your share of the fund. This means that 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!
If you would like to earn a return on your money, but without the risks of investing, you are able to create a Pocket that yields interest 📈
Money saved with Plum in these Interest Pockets is held on Trust with a UK Bank (Investec). A Trust is a legal mechanism that means we can look after your money, but legally it never stops belonging to you.
Because Plum handles many customer’s money, it means we can harness administrative efficiencies and potentially negotiate a better interest rate than the one that you may be 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.