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UK Fintech News Roundup: The Latest Stories 03/01

Every Wednesday, we delve into the latest fintech updates from across the UK. This week brings updates from the Financial Times, Shawbrook, Peninsula Group, Currensea and Zest.

‘Grey gloom’ start to 2024?

UK economists have warned that the economy will remain ‘grey gloom’ in 2024, according to the Financial Times’ annual survey. The majority of leading UK-based economists polled said despite falling inflation voters would feel little improvement in their living standards before the general election expected this year.

unemployment rain

FT also revealed that while unemployment is low by historic standards – most respondents believe it is set to rise over the year ahead from 4.2 per cent to between 4.5 per cent and five per cent by the end of 2024.

Diane Coyle, professor of public policy at Cambridge University, said: “The issue isn’t just incomes and inflation, but that people’s experience day to day is getting worse as public services crumble. The bill for sustained under-investment in everything from infrastructure, health and education to private business is coming due.”

UK savers fail to capitalise on potential savings

New research from Shawbrook reveals that 24 per cent of savers have never switched to a different savings account or opened an additional one. The study also highlights that savers might be missing out on the current opportunity of high rates, potentially losing hundreds by not taking advantage of better-paying accounts.

UK fintech piggy bankTwenty-four per cent of active savers who have never changed to a new savings account or opened an additional savings account say they have an average interest rate of 2.2 per cent on their main savings account.

Adam Thrower, head of savings at Shawbrook, reacted to the findings: “Holding onto that same old savings account is like leaving money on the table. Loyalty might be costing you big time and it might only take a few minutes to open a new savings account! Small differences in rates add up – don’t underestimate it, they
pile up faster than you think.”

Could UK SMEs be faring better than elsewhere?

Around 84.2 per cent of SMEs list rising costs as their top business concern, according to Peninsula Group‘s recent survey of 79,000 SMEs across five countries: Australia, Canada, Ireland, New Zealand, and the UK.

UK mapHowever, the problem appears much less urgent in the UK, with just 18.8 per cent listing survival as their top goal, compared to 38.4 per cent a year ago.

Alan Price, chief operations officer at Peninsula Group, commented: “Employers feeling the financial pinch are turning to reward and recognition and enhanced benefits instead of financial remuneration to aid retention in tough economic times.

“Here in the UK, there is concern amongst small business owners around the affordability of pay raises, with a huge jump to National Minimum Wage and National Living Wage due in April.

Currensea celebrates FX saving milestone

The travel debit card for the UK, Currensea, has now saved travellers over £3million in foreign exchange (FX) fees since its launch in 2020.

UK boat fintechThe Currensea card saves at least 85 per cent on every overseas transaction by cutting out the normal fees leveraged by banks. Currensea cards are now used globally every 10 seconds, with card usage doubling across 2023 compared to the previous year, as the UK’s appetite for travel returns alongside a growing awareness of high foreign exchange rates and a demand for enhanced value when spending abroad.

James Lynn, co-founder of Currensea, said: “With UK travellers forking out an unnecessary £2.7billion in FX fees every year, it’s vital that savvy holidaymakers understand the real cost of spending abroad. There is a chronic lack of transparency among many payment options with hidden costs and misleading rates that mislead travellers, ultimately costing them more. It’s just as important for travellers to secure value for money on their travel money as it is to get a good deal on flights and accommodation.”

Christmas bonuses prove necessary lifeline for UK employees

Christmas bonuses are providing a lifeline for 58 per cent of 18 to 34-year-olds as younger employees continue to struggle with rising living costs, according to new research from employee benefits technology platform, Zest.

working on christmasOf those who receive a Christmas bonus, 61 per cent of younger employees would prefer year-round financial support such as workplace savings schemes or discount vouchers over a one-off Christmas bonus – compared to just 21 per cent of older employees.

Matt Russell, CEO at Zest, comments: “During the Christmas bonus season, many employers will be looking to reward younger employees who may have struggled with rising costs over the last 12 months. Whilst one-off bonus payments are hugely welcome, employers should consider whether these short-term rewards are what employees want or need.”

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