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UK Fintech News Roundup: The Latest Stories 11/01

Every Wednesday, we delve into the latest fintech updates from across the UK. This week brings updates from NatWest, NerdWallet, CMC Markets, Prograd and more.

Kids in the UK have ambitious savings goals for 2023

Child saving phone card UK fintechPrepaid debit card and pocket money app NatWest Rooster Money has revealed that thousands of children across the UK are aiming to save an average of £697.11 each.

The data from the app highlights that across all 6 to 17-year-olds in the UK, children could save an equivalent of £6.7billion. NatWest also released data concerning what children using the app are saving for. The most popular goal created on the Rooster Money app in December 2023, video games and gaming accessories, accounted for a target of over £191,000.

Will Carmichael, CEO at NatWest Rooster Money, offered his view on the data. He explained: “The behaviours and perceptions that we establish around money in our early life are often those that remain with us into adulthood. What’s really striking is the size of some of the targets being set. They average out to almost £700 per child – reflecting the huge aspirations of children when they are given the chance to set targets for themselves.”

Concern for SMEs as Hunt plans to cut energy support

Energy Support UK financeChancellor of the Exchequer Jeremy Hunt is set to reduce energy support for businesses, explaining to industry leaders that the support was “unsustainably expensive”.

The news that the existing package, worth £18billion over the next six months, is being reduced to just £2.5billion with no plans to cap fuel caps has created serious concerns for increasing numbers of businesses struggling to cover energy costs.

Chirag Shah, CEO of Nucleus Commercial Finance, commented on the news. Shah said: “Support for business has and continues to be in short supply. Extending the previous £18bn support package would’ve been a real lifeline for struggling businesses this year.

“Cutting this support to just £2.5bn for the next 6 months risks leaving the UK’s revenue generators high and dry as the recession bites. Challenges like this only highlight the importance of the commercial financial pipeline. It is essential that businesses, of all sizes, have access to lending they need so that they can focus on productivity and seize growth opportunities as they arise in this tougher climate.”

Are women more inclined to use BNPL schemes?

BNPL UK fintechWomen (20 per cent) are almost twice as likely to owe money to BNPL schemes as men (11 per cent), according to the ‘Household Debt Report‘ by personal finance experts at NerdWallet.

NerdWallet findings also revealed that 83 per cent of women and 62 per cent of men admit to owing up to £5,000 in debt. However, men (13 per cent) are more likely than women (6 per cent) to owe greater amounts of between £5,001 and £10,000.

Despite these findings, the report also found that men are much more reserved about sharing amounts of debt. Twenty per cent of men preferred not to disclose how much debt they are in. Meanwhile, only eight per cent of women would not disclose these amounts.

Brean Horne, personal finance expert at NerdWallet UK, emphasised the need for care when using BNPL schemes. Horne said: “It’s important to ensure that you can afford repayments before taking out any credit agreement. Borrowers who manage their repayments and pay off their debt on time are unlikely to run into any issues. However, shoppers purchasing more than they can reasonably afford may be putting themselves at risk, especially as the cost of living continues to rise.”

Best UK cities for new businesses revealed

Business close closureThe data from the study revealed Reading has the lowest percentage of closures, with just 0.13 per cent of businesses launched between Dec 2017 and Dec 2022 going into liquidation.

Reading saw 6,877 reported company openings, with only nine reported closures. Stoke-on-Trent, Plymouth, Cardiff and Edinburgh saw out the top five in the study from financial services company CMC Markets.

Overall, Southampton took the spot as statistically the worst city for a successful business. With 5,337 reported openings and 162 reported closures, the city saw a total of 3.04 per cent of businesses going into liquidation.

Gen-Z finance platform looks to promote financial inclusion with investment

Gen ZLondon-based Gen-Z finance platform Prograd has raised £2million in seed investments. The platform aims to support young people better understand finance.

The investment is to help expand the team’s marketing and development capabilities. Prograd also looks to improve its digital footprint, release an app and improve its algorithms products.

Ethan Fraenkel, CEO and co-founder of Prograd, commented on the investment. He said: “We plan to educate the Gen-Z and help them achieve their financial goals. This is without financial jargon and in the most cost-effective way. We also believe that one of the biggest problems in consumer finance right now is the lack of personalisation and financial literacy. There is also a big disconnect between banks, what customers want to do and how the two parties communicate.

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