Credit Kudos Features in Times Article ‘Fintech is the future and a force for good — and it is time to embrace it’

Fintech is the future and a force for good — and it is time to embrace it

Source: The Times

Last week was UK Fintech Week. Thousands of entrepreneurs and investors, regulators, advisers and headhunters gathered across the UK to network, showcase innovation and negotiate. They were joined by 15 international delegations from China, the Middle East, North America and Europe — keen to be part of the conversation. The week was kicked off by Innovate Finance’s fifth annual Global Summit, at which Mark Carney and Philip Hammond celebrated Britain’s fintech sector and committed to actively supporting its future success.

Despite Brexit, the UK’s fintech sector is thriving. Fintech — the harnessing of technology to improve financial services — is a UK success story. Private equity and venture capital investment into the sector in the UK lags only China and the United States, with $3.3 billion investment in 2018 and over $1 billion investment already in the first quarter of 2019. Fintech is the fastest-growing sector in the UK, already employing more than 76,000 people and with 25 per cent (or seven) of the world’s fintech unicorns. It is worth almost £7 billion annually to the economy. The UK has become the preferred choice of many to both innovate and invest because of our pro-growth, innovative regulatory environment, our world-class financial services sector and our historic welcome to global talent.

Fintech has made its way into mainstream financial services in the UK. Consumers may not recognise the term “fintech”, but they experience it through banking apps allowing them to see multiple accounts, easier ways of validating their identity, more accessible ways of saving or investing, better access to credit for small businesses and insurance for gig economy workers that clocks on and off when they do.

There aren’t many UK banks, asset managers and insurers who are not investing heavily in fintech through acquisition, partnering or by incubating their own. They are using the power of new technology and new thinking to transform both customer propositions and back-office processes. Over the next 20 years, fintech approaches will be embedded in every part of financial services, just as became a necessary component of retailing. Fintech truly is the future of financial services.

What stood out last week was the focus on “fintech for good”. As an economy, we still face some intractable problems — with 1.3 million unbanked but working adults in the UK and with 100,000 people in severe debt considering suicide each year. Last week, the focus on fintech’s power to improve society was not a sideshow, rather the main focus for many who believe that it can offer innovative solutions that bring benefits to a far wider proportion of society.

There is ample evidence that fintech has huge power to include. Fintechs on show last week included Credit Kudos and Credit Ladder, which uses consumers’ financial behaviour to assess credit worthiness, giving many more people access to credit. Salary Finance and Neyber showcased their partnerships with employers to offer financial advice, savings and lower-cost credit to employees, reducing the cost of debt by backing repayment through payroll. And far from feeling the need to keep innovation within start-ups, Starling Bank defined the adoption of great fintech ideas within incumbents as success — Monzo’s gambling blocking app released this year was embraced and copied by high street banks swiftly after its launch.

There remains scepticism about the impact of technology. Consumers know from the antics of Facebook and others that technology can do harm as well as good. Wonga was an early fintech — a tech-driven, high-cost credit lender that ignored the fact that lending money to people on low incomes at rates of over 1,000 per cent APR was hardly responsible lending. Adverts last year on the London Underground urging us to “be More Brenda” and buy bitcoin in under ten minutes were aimed at unsophisticated buyers who shouldn’t be investing in anything as volatile as cryptocurrency. In some other markets, where there hasn’t been effective regulation of fintech, there have been scandals, such as in China last year where uncontrolled peer-to-peer lending saw thousands of companies spring up, many of which were no more than Ponzi schemes. Thousands of Chinese consumers lost their life savings.

In any market, there will be bad people trying to do bad things — and naive people who cause harm through ignorance or greed. One of our biggest learnings since the financial crisis has been the criticality of culture. There will always be an information asymmetry between those providing and those buying financial services, so the culture of the company designing, marketing and selling services is critical. Seek to do good and there is a decent chance that consumers will benefit. But the converse is equally true. Positively, a significant proportion of fintechs have started with a mission to be better for consumers than their predecessors. This can only be reinforced by the high proportion of the talent going into fintech coming from millennials, a population who believe that improving society is more important to business than profit.

But diversity is a crucial area for improvement. There is ample evidence that ethnic and cultural diversity is likely to lead to a wider range of ideas (as well as higher profitability). Yet only 17 per cent of senior executives in UK fintech are female, with female-led start-ups receiving only 3 per cent of total available VC funding in 2018. We need to do better.

Financial services are integral to all of our lives. Fintechs that make managing money easier, quicker and simpler could help millions to stay on track financially and avoid problems. Fintechs that enable more people to avoid high-cost credit and spiralling debt could reduce stress and improve well-being. Passion to create better financial services runs through fintech like lettering through a stick of rock. Fintech really can be different — with a strong focus on purpose, culture and ethics — and the diversity that will enable challenge and avoid group-think. The phenomenal talent in UK fintech combined with the power of new technology means that fintech has the power for immense good. Let’s realise this potential.

Natalie Ceeney chairs Innovate Finance, the UK fintech members’ body

We Are Digital Raises £1.5 Million To Bridge Digital And Financial Skill Gaps In The UK

London, United Kingdom – We Are Digital, a leading digital and financial inclusion training provider, announces that it has secured £1.5 million in funding. This investment will be used to hire key staff and make technology upgrades that will allow it to scale its operations and impact. We Are Digital work to tackle social exclusion by upskilling vulnerable people with limited technological skills, providing them with essential digital and financial training to enhance their everyday lives in an increasingly digitised world.

More than 12.6 million people in the UK[1] lack essential digital skills, the highest proportion of whom are the poorest and most vulnerable people in our society. In addition, approximately 40% of UK adults are identified as not in control of their finances and “living on the financial edge”, and 11.5 million adults in the UK have less than £100 in savings[2].

We Are Digital help bridge this divide through digital and financial training as a service to housing associations, councils, corporates and central government. Through its UK-wide network of outreach tutors and delivery partners, controlled centrally from its head office in the Midlands, it is able to provide high-quality personal training, both in-home and locally delivered in community locations. It has already provided community investment support to over 100 clients, including running national and regional programmes through its “managing agent” model.

Its solution comes at a time when government departments, banks and the entire social housing sector (2,000 providers – 4.6 million homes) are undergoing a huge shift towards the digitisation of processes and applications from paper to online, helping customers to save money and improving resident lives.

With the help of some of the best-known social impact investors in Europe, We Are Digital’s round was oversubscribed by 50%, led by VCs Si2 Fund, Triplepoint and Ascension Ventures. Also, in the round is Wayra UK and ClearlySo, Europe’s leading impact investment bank (through its extensive network of high-net-worth individual and institutional investors). Early investors were also exited within the round.

Matthew Adam, founder and Chief Executive of We Are Digital, stated: “After a lot of hard work, I’m massively excited to close our round. We continue to grow at 100% per year and winning increasingly bigger contracts where we are applying our innovations to community investment support across the UK. As a social business, I’m proud to now have on board some of the best social impact investors in the sector, who will help us scale even further over the next 6 years. I also want to thank our early angel investors and Midven, without both of whom we would not be where we are now.”

SI2 Fund manager, Pieter Oostlander, mentioned: “We Are Digital perfectly fits the SI2 Fund portfolio as it uses a very innovative business model to address a pressing societal issue. We are excited to help We Are Digital expand in the UK and beyond, hence scaling its impact.”

Julian Pickstone, Fund Manager of Triple Point, said:” We are delighted to be working with We are Digital. We believe that the company can make a significant contribution to bridging the digital gap.”

Emma Steele, Investment Manager of Ascension Ventures (Fair By Design), mentioned:“From their time on the Wayra UK Fair By Design accelerator to now, we have been impressed by We Are Digital’s approach to digital and financial inclusion. We’re delighted to be able to support its growth plans in tackling a core underlying driver of the Poverty Premium in the UK.”

Matias Wibowo, Investment Manager at ClearlySo, commented: “This transaction demonstrates impact investment’s central role in realising the ideal of the Big Society. We Are Digital (WAD) provides services that the public desperately needs at better quality while being more affordable. WAD aligns the interests and enhances the outcomes for multiple stakeholders, including investors. That’s why our investors gladly backed this transaction.”

Gary Stewart, Director of Wayra UK and Telefónica Open Future in the UK, said: “From launching the UK’s first social accelerator programme, to investing in pioneering companies such as We Are Digital – Wayra UK has a proud history in nurturing innovative businesses that create a positive societal impact. The investment that Matthew and the team have secured demonstrates the value being placed in social businesses across the country and is a testament to the efforts they’ve put in to date. I look forward to seeing what they achieve in future.”




Notes to the Editors

About ClearlySo

ClearlySo is Europe’s leading impact investment bank, working exclusively with enterprises and funds delivering positive social, ethical, and/or environmental impact as well as financial return.

Originally founded in 2008, ClearlySo has helped more than 130 clients raise more than £250 million in impact investment from its extensive network of high-net-worth individual and institutional investors.

ClearlySo is headquartered in London.

John Lloyd
Chief Marketing Officer
T: 02074909520

About We Are Digital

We Are Digital is a training and support services firm with a mission to help organisations tackle digital and financial exclusion for their customers and help them access critical services. It offers training primarily through a national network of vetted tutors and delivery partners, offering 1:1, group support and outsourced programme management.

Matthew Adam
Founder and CEO
We Are Digital
T: 07834 817749

About Si2 Fund

SI2 Fund is a European social impact investment fund that focusses on enterprises that make it their core business to address a societal challenge and helps them achieve sustainable societal impact alongside a fair financial return. SI2 Fund operates in Belgium, the Netherlands and the United Kingdom. It’s an active member of the European Venture Philanthropy Association (EVPA). More information is available at

Contact person at SI² Fund

Pieter Oostlander
Fund manager
BE +32471717722
NL +31653205632

About Triple Point

Triple Point Impact targets significant capital growth by investing in fast-growing, innovative companies that have a positive impact on society and qualify for EIS tax reliefs.
UK +44 207 201 8989

About Ascension Ventures and Fair By Design

Ascension Ventures backs exceptional entrepreneurs with big visions – providing capital, our network, and expert mentors to grow scalable technology businesses. We support UK businesses from Seed to Series A, and since 2013, Ascension has invested (across 4 distinct funds with £22m+ AUM) in 75+ UK based early-stage companies. Current funds include the ASCEND SEIS (Seed), CENTAUR EIS (Seed+), and its Fair By Design social impact fund, helping to reduce poverty in the UK.

Fair By Design is a movement dedicated to ending the Poverty Premium: people in poverty pay more for a range of products, including high-cost credit; rent-to-own products such as kitchen appliances; and insurance in less affluent postcodes. Our Campaign works with businesses, government, and regulators to design out the Poverty Premium. Our Venture Fund provides capital to help grow innovative ventures developing products that make markets fairer.

About Wayra

Wayra is the most global, connected and technological open innovation hub in the world. Under the Telefónica brand Wayra currently operates in 10 countries: Argentina, Brazil, Chile, Colombia, Germany, Mexico, Peru, Spain, the United Kingdom and Venezuela.

Our hubs have raised over $248 million through third-party investors for our companies. Our global presence allows us to be at the helm of innovation, shoulder to shoulder with driven entrepreneurs and in a position to engage the right partners, corporate leaders, investors, serial entrepreneurs and leaders of industries for business.

We have been committed partners for seven years and connect innovators with Telefónica and generate joint business opportunities. We offer unparalleled access to Telefónica’s 350 million customers and clients across multiple countries. We are a unique and effective interface between both entrepreneurs and our network of corporates, governments and other partners in the 17 countries in which Telefónica global operates.

Wagestream Featured in the Economist!

Source: the Economist

Helping workers get by

A financial-services company gives workers an advance on their salaries. Employers approve.

The monthly pay cycle is something that professionals quickly get used to. But for employees with low-paid, or irregular, jobs it can involve real hardship. All too often, the bills arrive before the wages do.

The temptation for workers is to turn to payday lenders. But the costs are high. In Britain, even after the Financial Conduct Authority imposed a cap in 2015, the annualised interest rates for such loans average 1,250%.

Now there is an alternative. Wagestream is a British financial-services company which will advance part of a worker’s salary in return for a flat £1.75 ($2.30) fee. The money is then deducted from the final pay packet. This has a number of advantages for workers. They can deal with a cash shortfall while avoiding the vicious spiral of escalating charges and ever-bigger debts.

An app tells each worker how much they have earned so far this month, and allows them to borrow up to 40% of it. The average advance is £83 and is typically tapped twice a month. Clients include Rentokil Initial, a pest control company, and Stonegate Pubs, which operates nearly 700 establishments in Britain.

The scheme works for Wagestream because it is exposed to the credit risk of the employer, not the workers. As well as the charge on employees, Wagestream also earns a fee from the companies involved. Why would employers accept this? In part, it is because they recognise workers face cashflow problems, and they are more likely to retain their services if those issues can be dealt with.

But the evidence also suggests that employees work harder when they have quicker access to their money. Wagestream says clients that hire workers on an hourly basis find that they work 22% more hours after advances are made available. One client, a security firm, was struggling to fill its overtime rotas. By allowing employees to tap the extra cash immediately after a shift through Wagestream, the company found many more overtime volunteers. In effect, these cash advances are a way to bridge the desire of workers to be paid on a weekly basis with the preference of employers to pay them monthly.

Wagestream’s innovative approach has attracted investors with a social focus. One of its backers is the Fair By Design fund, run by Emma Steele of Ascension Ventures, a venture-capital firm. The fund has £10m of assets and a ten-year investment horizon that, Ms Steele says, Wagestream fitted neatly into. Among the other companies in the portfolio are Credit Kudos, which aims to measure creditworthiness in a way that is fairer to low earners, and We Are Digital, which gives consumers financial training and helps the poor get access to the internet.

Fair By Design is also the name of a campaign that aims to eradicate the “poverty premium” which results from poor people paying more for many goods and services. Research by Bristol University suggests that the poverty premium in Britain averages £490 a year, of which around £55 reflects the use of higher-cost credit. However, this average disguises a deep split: most families do not use expensive credit but those who do can pay £540 a year for it.

The Joseph Rowntree Foundation (jrf), a long-standing anti-poverty group, backs the campaign and has invested in the fund. Tanya Seeley of jrf says that tackling in-work poverty is one of the campaign’s most important aims. The charity estimates that 72% of children who live in poverty in Britain have one or more parents in work. That compares with just 50% in the late 1990s.

Of course, allowing workers to get a salary advance is not a panacea. If their wages are not high enough to cover their living expenses, they will still struggle. But many workers can run into trouble when they face an unexpected bill, for instance to replace a domestic appliance. Eliminating the need to depend on pricey payday lenders is an important advance. Although the service is confined to Britain at present, there is no reason why other companies cannot offer something similar in other countries.

Wagestream’s example is also a useful antidote for those who are overly cynical about either capitalism or socially conscious investing. Sometimes financial innovation can tackle social problems, as well as hopefully make a return for ethical investors—who are not, after all, charities. Asset managers seeking at once to do good and do well might back ideas shunned by rivals obsessed with finding the next Facebook.

Clarification (April 5th 2019): An earlier version of this article referred to Wagestream’s service as offering loans. It would be better described as an advance. The text has been amended to reflect this.

Incuto CEO Andrew Rabbitt Offers His take On Fighting Financial Exclusion With Innovation


Fintech For Good – Fighting Financial Exclusion With Innovation

Andrew Rabbitt, CEO, incuto

Fintech is rarely written about or described in the context of how it can help local communities or low-income households. More often than not, media stories focus on how financial technology has propelled a challenger bank into the limelight, about up-and-coming providers securing new funding or how Fintech is improving efficiencies and cost saving for customers. Innovation is, of course, both interesting and important – especially where financial services are improved and cost savings are passed onto customers. Not only this, but Fintech is opening up a wide range of new financial services which may previously have been inaccessible or lack transparency for customers. It doesn’t, however, address the vast numbers of individuals who may not have access to those services in the first place.

Financial exclusion – namely those individuals across the UK who cannot access financial services and often have to pay a poverty premium because of their low income – is a reality for many. Although innovation and technology adoption in financial services has been slow across the board, financial inclusion may be the final frontier for Fintech, and one that now needs urgent attention.

There is a huge opportunity for Fintech to participate in the ‘tech for good’ revolution – it’s time we saw innovation championing financial inclusion and access to high-quality, affordable services for all. 

Tackling the Poverty Premium

Andrew Rabbitt

Andrew Rabbitt

In the UK, there are around 14 million people who pay more for goods and services simply because they are from poorer households. These individuals and families are subject to a poverty premium which manifests itself in different ways. For example, if you can’t afford to buy household goods and electrical items outright, you may need to use the extremely high-cost rent-to-own model of purchasing these items from providers like BrightHouse. Similarly, many low-income households are forced to pay pre-paid tariffs for energy, meaning they don’t have access to the cheaper tariffs, and 1.5 million people in the UK do not have a bank account – forcing them to use expensive, cost-per-transaction, pre-paid card providers.

When it comes to gaining access to finance, these individuals again find themselves side-lined. Many have to resort to expensive payday lenders typically charging between 800-1200% APR. It is well publicised, and highlighted by organisations like the End High Cost Credit Alliance and Debt Hacker, that these types of loans and the continued financial burden they put on individuals and families can cause ongoing hardship for years to come.

Access to affordable, responsible finance is at the heart of eradicating the Poverty Premium. Namely, giving the financially excluded access to bank accounts, debit cards and lower interest loans so they are paying the same costs as the wider population and not facing long-term, crippling debt. In today’s technology driven world, the potential exists to give everyone access to better quality and cheaper financial products and services. If we empower organisations who work with low-income families and households and offer a viable alternative to high-interest, pay-day loans and bank charges, we can take giant strides towards eradicating the poverty premium in financial services.

Enabling ethical banking

The key to tackling the poverty premium in financial services must lie with those organisations who can offer fairer and more ethical approaches to lending. Credit unions, community banks and CDFIs are perfectly placed to take on this role. However, there continue to be a number of significant stumbling blocks for these lenders to reaching the individuals and communities they seek to serve.

For example, credit unions often offer their members limited branch networks (some have no more than two branches servicing a given geographical area), plus they are struggling with legacy technology and paper-based systems which make their service extremely slow and inaccessible. Traditionally members have had to physically go into a branch to either withdraw or pay in money using only their membership number.

At a time when technology is making the very concept of a geographical customer base almost obsolete, credit unions have continued to serve only local communities, despite the fact that demand for their services continues to grow. We know, for example, that membership to credit unions rose by 250% last year. This is despite the fact that nine credit unions went into default in the same period – perhaps due to their difficulties transforming the service they offer in a digital era.

Unfortunately, UK Credit Unions, community banks and CDFIs have struggled to compete with pay day lenders such as Wonga and QuickQuid. Rightly or wrongly, these providers have succeeded in capturing the market via easy, online access and high-profile advertising campaigns.

The solution is simple. Open up the services credit unions can offer and give access to a wider audience through technology. Better branch access via partnerships with wider networks, plus a debit card (rather than simply a Membership number) would allow the financially excluded to access additionally services at the same price as the wider population and better online access and automation.

Innovative technology for financial inclusion

Like all organisations, credit unions must innovate and transform the service they offer Members. A digital offering that increases access and ease of use for customers is absolutely fundamental to that process.

Of course, any technology solution for credit unions must be all encompassing. After all, it’s not just about enabling people to apply online in a faster and more efficient way. It’s about giving them financial freedom and access to services such as a bank card and account which they can use, the ability to pay in money at a wider network of outlets and the same level of interaction and engagement that they would receive from a high-street or online bank.

Technology which would truly innovate must include paper-free, automated applications; automated communication to increase engagement; 24/7 access including pre-authorised amounts and rates, pre-filled applications and e-signatures; automated ID verification, AML, affordability and credit scoring and underwriting; a self-service web portal for Members to view and manage their accounts and, as mentioned already, access to banking services including a debit card, an account number and sort code.

 With technology now available to fulfil these requirements, it’s time that credit unions, community banks and CDFIs seized the chance to enhance and improve their services and become more competitive through innovation. With many credit unions falling behind in a digital world, it’s more imperative than ever that these organisations embrace technology and subsequently address the problem of financial exclusion and education.

Wagestream Featured in the Evening Standard!

Source: The Evening Standard

Money app lets staff take ‘pay as you go’ salaries before pay day

The app allows employees to draw salaries before pay day

The app allows employees to draw salaries before pay day ( EPA )

More than 50 London businesses are offering staff the opportunity to “get paid as you go” via an app, meaning they can draw salaries before payday.

Participating companies — including Hackney Council and Camden Town Brewery — are using Wagestream to allow employees to draw money they have earned early. The amount is then deducted from their monthly salary on their usual payday.

The app, which is authorised by the Financial Conduct Authority, is already being used by about 115,000 workers.

Investors include the founders of Amazon and Microsoft — Jeff Bezos and Bill Gates.

Hong Kong-born co-founder Peter Briffett, who has lived in London for over 15 years, launched the app last year to help tackle the “huge problem” of low-paid workers having to rely on payday loans.

He told the Standard: “Wagestream allows users to draw money they have earned already, not take out a loan.

“I think this will soon be the next big thing. It puts the power back with the workers.”

The service costs a flat fee of £1.75 per transaction. Employers pay a £1 fee per worker using the service.

FBD Investment Kraydel Disrupting UK’s £20bn Social Care Industry

The tech start-ups ready to disrupt the UK’s £20 billion social care industry

Source: The Evening Standard

Tech companies Cera, Kraydel and OnCare have a shared mission: improve social care

The UK government spent £21.2 billion on social care between 2016 and 2017

The UK government spent £21.2 billion on social care between 2016 and 2017 ( )

The UK’s social care sector is facing some major issues. The number of people needing care is rising as we face an ageing population, yet care is very expensive and the sector is facing chronic staff shortages.

According to The Health Foundation, at any one time, there are over 80,000 vacancies for social care jobs in England, whilst more than 900 workers are estimated to be leaving the profession every day.

The current model for social care may be on its knees but technology is hoping to change this.

Tech start-ups like Babylon and Echo are already transforming healthcare, and a new breed of companies want to do the same for social care.

From creating the Uber for social care, to software platforms for carers and connected devices, here’s how tech plans to solve the growing social care crisis, and tap into the UK’s £21.2 billion adult social care market.

Tackling social care, one tech company at a time

Across the UK there is now a wealth of start-ups focusing on social care.

Cera, created by former doctor Ben Maruthappu and Marek Sacha, is using technology in different ways to improve it.

It’s starting with an “Uber for carers” model with a marketplace that matches care workers to clients and their families. As well, it’s digitising care records, so carers can log information about clients using their smartphone.

This information is then being fed into an artificial intelligence (AI) platform, which will eventually predict the health of their clients.

“Care is complex, there [are] several parts to it and lots of different people that can be involved, from family members to doctors, carers and the person receiving the care,” Maruthappu tells the Standard. “The tech needs to adapt around that.”

How Cera’s artificial intelligent platform works

Then there’s OnCare. A start-up born out of the Founders Factoryincubator programme, it has built a tech platform for carers and families to improve the monitoring aspect of care provision.

OnCare’s app works both online and offline. Carers use it to store notes about clients, read up on those they are visiting that day, and as a way to raise the alert if anything is wrong. Families receive text notifications and can log in to their own version of the app to see how care for their family member is proceeding.

OnCare’s CEO Alastair Cohen sees the start-up as less like Cera’s Uber-esque and more like the Zoopla model.

“We want to empower everyone – offline and online care-providers – with the tools to deliver fantastic personalised care,” he tells the Standard.

Then over in Ireland, Kraydel has created an internet-connected device that enables the individual to support themselves in their own care journey.

The Kraydel device is a set-top box that sits on top of the TV as a connected device linking clients to their carers, family members or friends through their TV screen.

“We call it FaceTime for TV, just a hands-free version of FaceTime on the big screen at home,” explains Kraydel’s CEO Dr Lisa Smith.

After initially experimenting with iPads, Kraydel’s team realised that creating a TV-linked device would be more accessible for older patients. “It’s a really familiar technology, with easy-to-use buttons in a non-threatening way.

“All of the stuff we take for granted through our smartphones, we can bring through to the TV in a simplified, easy way,” adds Smith.

Why is this technology useful for social care?

As the companies are tackling different aspects of social care, the technology they are developing is targeting these issues in specific ways.

OnCare’s mission is to remove the over-reliance on paperwork in the industry, by making everything digital.

It stores records safely so care agencies can be GDPR compliant. As well, it is also saving its care workers time so they can focus on their clients more. Indeed, one care worker said that on the first day of using OnCare it saved him at least 20 minutes.

“There’s a lot of money in social care, but it’s currently being used so inefficiently. We want to add the tools to make the money be used way more effectively in the process,” says Cohen.

OnCare’s mobile platform allows carers to digitise their work(OnCare)

With Kraydel’s device, it provides teleconferencing so care clients can speak to their care workers from the safety of their armchairs at home.

It also hopes to facilitate through it, a sort of social network for elderly people, so they can “FaceTime” each other, hold prayer meetings or even book clubs from their homes. Kraydel hopes this will tackle some of the underlying problems that come with getting older, namely isolation and loneliness.

“In our minds, there’s a clear link between the underlying drivers such as loneliness and the liner path towards isolation, poor health and wellbeing,” explains Kraydel’s chief commercial officer, Rupinder Singh. “Kraydel is about maintaining wellbeing through its oversight, connectivity and the colour it brings to people’s lives.”

And Cera has big plans for its AI capabilities. “We’re harnessing the information we’re collecting with AI to predict our users’ health, such as the risk of hospitalisation,” says Maruthappu. “Should someone be high risk, we can get in touch, increase the care that’s being delivered or co-ordinate with the GP.”

Solving social care is a personal issue

For all these companies, transforming the social care sector was inspired by their personal experiences of care.

“[Changing social care] is a need that has been felt by everyone on the team,” says Smith. “Everyone has their own story, and there’s a real buzz in the office and a passion to get it out there as quickly as possible.”

Cera’s Maruthappu and OnCare’s Cohen say they both faced difficulties when it came to the care of their grandmothers.

“When my grandmother was receiving care you had no idea when the person was arriving or leaving, what services are being delivered and it was a revolving door of different carers coming in and out,” says Maruthappu.

Cohen says his family faced “road bumps” but it was during his initial research of the sector that he came across horror stories. “There are problems on all sides: [on] finding the care side and [on] the care delivery side,” he says.

“And there’s a lot of inherent guilt, that if you hire someone to look after your parent, it’s you not pulling your weight. We want to change that perception.”

Where will it go next?

Considering the problems the care sector has it, it doesn’t really have a choice but to embrace technology. Government tech accelerator programme’s chief strategy officer Max Chambers, which has invested in Cera, said start-ups are increasingly vital in tackling the social care crisis.

“[It’s about] giving control and choice to elderly people and their families, enabled by good technology,” said Chambers.

These companies can see they’re already on to a winner. Whilst Kraydel is still in its early prototyping stages, it has had a positive response from big corporations, such as health insurance providers, as well as the NHS, who think the technology is necessary for today’s market.

Cera raised $17 million in its Series A funding, whilst OnCare recently raised £550,000 in seed funding from investors including Zoopla’s founder Alex Chesterman and LoveFilm’s co-founder, Simon Franks. Both investors said they were interested in how the start-up was using technology to make the provision of social care easier and more effective.

As the UK population continues to grow older, there are going to be more demands for social care. It looks like the technology saviours are arriving just in time.

Wagestream data indicates average UK household debt now stands at record £15,400

Source: The Guardian

Austerity and wage stagnation to blame for ‘crisis level’ unsecured loans, says TUC

The level of unsecured debt as a share of household income is now 30.4%.
 The level of unsecured debt as a share of household income is now 30.4%. Photograph: Dominic Lipinski/PA

Britain’s household debt mountain has reached a new peak, with UK homes now owing an average of £15,385 to credit card firms, banks and other lenders, according to the TUC.

The trade union body said household debt rose sharply in 2018 as years of austerity and wage stagnation forced households to increase their borrowing.

The TUC said in its annual report on the nation’s finances that the amounts owed by British households rose to a combined £428bn in the third quarter of 2018. Each household owed £886 more than it did 12 months previously, it said. The figures do not include outstanding mortgage debts but do include student loans.

The level of unsecured debt as a share of household income is now 30.4%, the highest level it has ever been at. It is well above the £286bn peak in 2008 before the financial crisis, the TUC said. That figure also included student loans, but tuition fees then were £3,000 a year compared with up to £9,250 now.

Public spending cuts and years of wage stagnation are key reasons for the increase in unsecured debt, the TUC said, adding that working families are on average worse off today than before the financial crisis. The rise of the gig economy and zero-hours contracts are also thought to be a significant contributing factor.

The TUC general secretary, Frances O’Grady, said: “Household debt is at crisis level. Years of austerity and wage stagnation has pushed millions of families deep into the red. The government is skating on thin ice by relying on household debt to drive growth. A strong economy needs people spending wages, not credit cards and loans.”

O’Grady said the minimum wage, at £7.83 an hour for over-25s, remained too low and should be raised to £10 “as quickly as possible”. She also said too few workers had the power to bargain for higher wages, and trade unions must be given the freedom to enter all workplaces and organise collective wage bargaining.

To compile its figures, the TUC compared the total amount lent in bank overdrafts, personal loans, store cards, payday loans and outstanding credit card debts. It also included student loans, which added a substantial amount to the figures. Graduates can now expect to leave degree courses with debts of £50,000, but are not required to make student loan repayments if they are not earning at least £21,000 a year.

Its data shows that in 1998, households faced average unsecured debts of £5,456. A decade later, just as the financial crisis was starting, that sum had doubled to £11,146. Since 2008 households have been struggling with flat or falling incomes, at a time when prices have risen fast.

In October, the Bank of England’s chief economist, Andy Haldane, said the rise of insecure work in the gig economy had fuelled a “lost decade” of wage growth in Britain.

In the same month, the Office for National Statistics said the acceleration in wages growth seen in the middle of 2018 still left real pay £11 a week lower than it was before the financial crisis erupted. On a positive note it also reported that British pay was finally starting to rise faster than prices – at 3.1%.

The TUC’s £15,385 debt figure does not include further debts incurred over Christmas, which would be expected to push the figure even higher, according to research published on Monday.

The research found that workers expected to start the year with an average of £252 debt left over from the festive period alone. Shift and gig workers were hit hardest, putting £352 of festive spending on credit, according to the mobile app company Wagestream. Workers told researchers they feared they would not be able to pay off Christmas debts until May.

Becky O’Connor, a personal finance specialist at life insurer Royal London, said: “Paying off debt of this size can feel like a losing battle when there is no hope of an income rise on the horizon. It will be scant comfort that millions of other households are in the same boat. But there are actions people can take to reduce the burden. Those in real difficulty should seek specialist help from a free debt charity, such as StepChange.”

Fair By Design End of Year Round Up

2018 has been a busy year for us at the Fair By Design (FBD) Fund. FBD’s goal is to eradicate the ‘Poverty Premium’ or the extra costs of being poor in the UK. Our colleagues at the FBD Campaign have recently devised a roadmap on how this will be achieved.

The FBD Fund works alongside the campaign, investing early-stage in exceptional entrepreneurs with scalable tech solutions that tackle aspects of the premium. The ventures will need to deliver material savings to low income and vulnerable UK households, as well as an ability to scale rapidly in their respective markets. This is done across key areas including fuel poverty, financial exclusion, digital exclusion and food poverty, where those premiums are most felt.  

12 months in, the FBD team has been truly inspired to meet hundreds of entrepreneurs from diverse backgrounds who share this conviction and understand the opportunities and challenges behind scaling an impact business.

We’d like to take this chance to raise a toast to these fantastic teams and their support systems from key mentors to accelerator programs and co-investors.

We are very grateful for all the support you have given the FBD team this year from considering fund investments, making introductions, finding deal flow, offering to mentor, or simply giving us your time and thoughts during due diligence stages. Finding businesses with a direct impact on the Poverty Premium and exceptional, mission-driven founders, with the ambition and ability to scale their venture, is no mean feat but we have taken on the challenge and are already making progress:

We are delighted that, in 2018, alongside some great co-investors, we have deployed capital into 7 businesses that we are incredibly excited about.

We are delighted that, in 2018, alongside some great co-investors, we have deployed capital into 7 businesses that we are incredibly excited about.

Introducing the new members of the Fair By Design Family:

1)     Switchee – is a smart thermostat and asset management platform for large social landlords which reduces energy costs for social housing tenants. Co Investors: Mustard Seed, AU Capital Partners, Clearly So

2)    Wagestream – gives employees the power to stream their earned wages into their accounts whenever they need it through a simple, instant app, helping users avoid high interest pay-day loans. (Co-investors: Village Global, QED, LCIF)

3)    Incuto – is modernizing Credit Unions with its SaaS platform, making it easier and faster for individuals to access fair loans. (Co-investors: Northstar Ventures)

4)    JobSkilla – tackles digital exclusion by providing unemployed people with access to funded training programs through its free online platform.

5)    We Are Digital – delivers financial and digital inclusion training to ensure that individuals can access products and services previously inaccessible to them. (Round is still closing)

6)    Emrgnt – develops and operates intelligent local energy systems, delivering cost savings to building products owners and cheaper electricity and heat bills to domestic customers. (Co-investors: Angels)

7)    Kraydel – tackles social isolation for elderly and vulnerable people, helping them stay independent for longer through its smart connectivity platform and ancillary digital services. (Co-investors: Hambro Perks, RGA, Pentech Ventures)

Please ask us if you would like an introduction.

We wish everyone a happy Christmas and New Year.

The Fair By Design Fund team.

Wagestream reveals the financial stress that faces households in Ireland face during the festive season

Source: the Irish Times

Nine out of 10 Belfast shift workers fear they can’t afford Christmas

Nine out of 10 shift workers in Belfast fear they will not be able to afford Christmas this year, according to new research

Figures from financial wellbeing experts, Wagestream have revealed the alarming financial stress that faces household during the festive season.

A total of 89 per cent of those surveyed feel they can’t afford Christmas this year, while over three quarters (78 per cent) admitted to being worried, anxious or even depressed about the cost of Christmas, with nearly half (48 percent) worrying once or more a day about the cost.

The most pressing money stresses for workers in Belfast are not being able ‘afford the type of Christmas that their family deserves’ (48 per cent) and ‘having to pay for everything’ (44 per cent).

Most expect to pay around £582 on gifts, food and travel over the festive period, but 86 percent admit to almost always going over budget.

Of further concern is the fact the average person is set to put £230 of their festive expenditure on credit cards or loans

Belfast residents expect to be paying off their Christmas debt for nearly four months, meaning they’ll be in the red until April.

In order to reduce the unwanted financial street, respondents are looking for more support from their employer, with all stating they would do more shifts over the festive period if it meant they could access their pay as soon as they have earned it.

Peter Briffett, CEO and co-founder of Wagestream said it is time for businesses to accept accountability for the true cost of Christmas on working people, and help address the problem

“The data makes clear that staff want more certainty and more financial flexibility from their employers. This is a huge opportunity for businesses in the UK: offering the ability to access earned income before late-January will help staff avoid the ‘payday poverty’ cycle of overdrafts, credit cards and high-interest loans – improving employee wellbeing, productivity and retention in the process.”

Erik Porter, head of adult and industry programmes at The Money Charity added:

“Being on top of your money means you are more in control of your life; it has a huge impact on your day-to-day wellbeing, including productivity at work.

“These findings offer businesses a valuable chance to better understand their workforce, and begin offering the types of flexibility and benefits that will really help the British workforce better manage their money over the festive period.”

MPs: Are vulnerable bank customers being treated fairly?

Source: BBC

The loss of bank branches is one issue affecting vulnerable customers
A poster saying that a branch of Halifax has closed

A committee of MPs is to examine whether vulnerable consumers are being treated fairly by banks and service providers.

Among other things the Treasury Committee will look at what banks are doing to stop financial exclusion.

It will also examine whether some vulnerable people are being overcharged for travel insurance.

Citizens Advice has claimed that people are losing as much as £877 a year each, because they are loyal customers.

As a result, the Financial Conduct Authority (FCA) and the Competition and Markets Authority (CMA) are already looking at whether some people are being over-charged for financial products.

“With customers expected to take more responsibility for their financial planning and resilience, bank branches closing, and the number of free-to-use ATMs falling, it’s becoming increasingly difficult for vulnerable customers to access certain financial services,” said Nicky Morgan, chair of the Treasury Committee.

The enquiry will also consider:

  • how financial firms define “vulnerability”
  • whether firms should have to have a legal duty of care to their customers
  • which customers suffer most when a bank branch closes
  • how Post Offices are filling the gap after a bank branch closure

Tom Selby, a senior analyst with the investment platform AJ Bell, said there was no easy answer to improve the situation.

“Although there are some customers who may more obviously be vulnerable, such as those diagnosed with Alzheimer’s, anyone can potentially become vulnerable at any time.

“Furthermore, it is not always obvious when someone is vulnerable. Many people suffer for long periods with debilitating depression, for example, without even their closest family knowing,” he said.


The Fair By Design Fund is committed to tackling the problems of financial exclusion that vulnerable, low income customers face, as illustrated in this report. FBD is seeking to invest in scalable FinTechs and other services that help low income families access the same resources as those that are better off, with the goal of eradicating the ‘Poverty Premium’ by 2023.

FbD’s Wayra-run accelerator businesses graduate in Westminster

Last week marked the end of year one of the Wayra-run Fair by Design accelerator programme and the event was marked by a celebration in the Houses of Parliament.  Congratulations go to Incuto, We Are Digital and JobSkilla who are all poverty premium busting businesses.  Watch the clip to see Andrew Rabbit of Incuto graduate.

Giles Coren Writes about Wagestream

Wagestream is featured once again in The Times and this time by the legendary, Giles Coren. It is great to get a big 👍 thumbs up 👍 from such an influential journalist. The link to the full article is below. Here is to ending the “poverty cycle” of the average UK worker one day at a time.

Fair by Design is recruiting

Ascension Ventures is looking for a full-time Marketing Manager with a focus on our Fair By Design social impact fund.  
Get in touch if you know any good candidates with 2-3 years experience (digital marketing, social media, thought leadership, and great written skills) Thanks !  Read the full Job Description here:

New automatic energy switching service launches

A new automatic energy switching service that promises to move you whenever a cheaper deal comes along launches today.

Weflip, from price comparison firm Gocompare, is a website that will continually search to identify a cheaper energy tariff – which it will then move you to.

Auto-switching uses computer algorithms to track and identify potential savings based on your energy usage, meter type and current tariff.

Read more here

Fair by Design gives evidence to APPG on Poverty

Campaign Director, Lucie Russell and Lis, one of our Campaign Ambassadors today gave evidence to the APPG on Poverty.  Lis shared some of her experiences of living with the poverty premium, paying more for essential items and the knock on effects that has – including for childcare: “if work is a way out of poverty why are there still so many barriers for women”.

Fair by Design Roadmap launched

The Fair by Design campaign has recently launched its Roadmap for ending the Poverty Premium.  Co-Authored by a number of high-profile partners and supporters, the Roadmap makes recommendations for policy makers, regulators and corporates on how they can play their part in ending the Poverty Premium.  You can download the Roadmap here.

Starling Partners With Incuto For New Banking-As-A-Service Offering

Source: Finextra

Starling names new clients for banking-as-a-service offering

Starling, the leading digital bank, is expanding its Banking-as-a-Service and Payment Services offer, bringing white label banking services to the UK and enabling other organisations to offer retail banking and make payments.

Access to Starling’s proprietary, cloud-based Banking-as-a-Service technology via Starling’s APIs will allow companies to launch their own bank accounts and provide customers with payment services such as debit cards. The move aims to inject competition into a market that has been dominated since the 1960s by the big four clearing banks — Barclays, HSBC, Lloyds Banking Group and RBS.

By opening up its APIs in this way, Starling is spearheading a new movement, where different businesses – ranging from major banks, government departments and emerging FinTech businesses – can develop and scale new financial products quickly and efficiently without the need for long development lead-times and complex legal arrangements.

Depending on a client’s individual needs, they can pick and choose components, or product features, from Starling and as they are using Starling’s banking license, they do not need to become a regulated entity. Clients also have access to all the major payment schemes in the UK and Europe.

In Payments Services, using Starling’s APIs, customers can quickly integrate into UK and European payment schemes to access Faster Payments, direct access to Bacs and SEPA, the Single Euro Payment Area.

Starling’s Payment Services and Banking-as-a-Service clients include the French challenger bank Ditto, government departments such as the Department for Work and Pensions, and savings and investment marketplace Raisin UK.

Starling is already supporting several FinTech companies and today can announce that it is working with Instarem, Vitesse, Incuto and AccessPay and has a number of strategic partnerships with companies such as Vocalink, CurrencyCloud, Form3, Railsbank and Bankable. It is also working with FIS Global, the international provider of financial services technology and outsourcing services, which is looking to launch using our services.

Anne Boden, chief executive of Starling Bank, speaking today at the PayExpo 2018 conference in London, said:

“The banking transformation has begun, we’re enabling customers to pick and choose the applications and services they need and how they use them.

“The API economy is far more important and relevant to banking than PSD2 and Open Banking. It is changing the rules of the game and does not need legislation for its survival or existence. We’re proud to be one of the first real implementations of this model for the banking industry.”

Starling names new clients for banking-as-a-service offering

Source: Starling Bank

Starling, the leading digital bank, is expanding its Banking-as-a-Service and Payment Services offer, bringing white label banking services to the UK and enabling other organisations to offer retail banking and make payments.

Access to Starling’s proprietary, cloud-based Banking-as-a-Service technology via Starling’s APIs will allow companies to launch their own bank accounts and provide customers with payment services such as debit cards. The move aims to inject competition into a market that has been dominated since the 1960s by the big four clearing banks — Barclays, HSBC, Lloyds Banking Group and RBS.

By opening up its APIs in this way, Starling is spearheading a new movement, where different businesses – ranging from major banks, government departments and emerging FinTech businesses – can develop and scale new financial products quickly and efficiently without the need for long development lead-times and complex legal arrangements.

Depending on a client’s individual needs, they can pick and choose components, or product features, from Starling and as they are using Starling’s banking license, they do not need to become a regulated entity. Clients also have access to all the major payment schemes in the UK and Europe.

In Payments Services, using Starling’s APIs, customers can quickly integrate into UK and European payment schemes to access Faster Payments, direct access to Bacs and SEPA, the Single Euro Payment Area.

Starling’s Payment Services and Banking-as-a-Service clients include the French challenger bank Ditto, government departments such as the Department for Work and Pensions, and savings and investment marketplace Raisin UK.

Starling is already supporting several FinTech companies and today can announce that it is working with Instarem, Vitesse, Incuto and AccessPay and has a number of strategic partnerships with companies such as Vocalink, CurrencyCloud, Form3, Railsbank and Bankable. It is also working with FIS Global, the international provider of financial services technology and outsourcing services, which is looking to launch using our services.

Anne Boden, chief executive of Starling Bank, speaking today at the PayExpo 2018 conference in London, said:

“The banking transformation has begun, we’re enabling customers to pick and choose the applications and services they need and how they use them.

“The API economy is far more important and relevant to banking than PSD2 and Open Banking. It is changing the rules of the game and does not need legislation for its survival or existence. We’re proud to be one of the first real implementations of this model for the banking industry.”

CAB highlights ‘loyalty penalty’ & lodges super-complaint

Citizens Advice has revealed customers who stay loyal to their providers are losing out on over £4 billion a year.  The national charity has today lodged a super-complaint with the Competition and Markets Authority (CMA), calling for the regulator to outline how the problem can be fixed.  The practice of overcharging loyal customers is widespread and Citizens Advice has repeatedly warned that loyal consumers are being ripped off.

Research by Citizens Advice found that across 5 essential markets (mobile, broadband, home insurance, mortgages and savings):

  • British consumers lose £4.1 billion a year to the loyalty penalty.
  • 8 in 10 people are paying a significantly higher price, in at least one of the markets, for remaining with their existing supplier.
  • The loyalty penalty is, on average, £877 per year – equal to 3% of the average household’s total annual expenditure.

“It beggars belief that companies in regulated markets can get away with routinely punishing their customers simply for being loyal. As a result of this super-complaint, the CMA should come up with concrete measures to end this systematic scam’ says Citizens Advice Chief Executive Gillian Guy.

The Government’s price cap in the energy market will bring down loyal customers’ bills by £75 per year on average. Citizens Advice analysis shows that excessive prices for loyal customers can be just as high – if not more so – in other markets.

The charity also found the loyalty penalty is disproportionately paid by vulnerable consumers, such as older people and people with mental health issues. These groups are particularly likely to struggle with switching.

In one example, Citizens Advice helped an elderly couple whose daughter went to the charity after finding her parents were paying nearly £1000 a year too much on their home insurance. The couple, who are both in their 90s, had been with the same company for 6 years and over that time their premium had continually risen.

This is the fourth super-complaint Citizens Advice has made since being given the power in 2002. Their complaint on payment protection insurance (PPI) in 2005 helped to generate a huge win for consumers, with at least £32.2 billion returned to customers in refunds and compensation so far.

Citizens Advice have identified the scale of the problem in 5 essential markets – but it knows loyal customers are penalised elsewhere too. By submitting this complaint the organisation is asking the CMA to investigate all markets where the loyalty penalty exists. Because the sectors are so diverse there is no one-size-fits-all solution. The CMA will need to work closely with other regulators and the Government to ensure the right action is taken in each market.

Read more in this article in The Independent

Mind the Gap on Contents Cover

‘The less money you have the less likely you are to be able to afford insurance, and if an incident occurs you are then hit over the head with a lack of money to cover the cost of its impact’.  We agree with Charlie Halkett…it’s time to end the insurance Poverty Premium.  Read her full article here.


Ofcom sets out plans to stop mobile users paying for handsets they already own!

The telecoms regulator has announced new proposals to stop mobile phone users paying for a handset they’ve already bought. But you don’t need to wait for a change in the rules – if you’re out of your minimum contract term, check now if you can switch and save £100s a year.

The Ofcom consultation published today estimates some 1.5 million mobile phone users are still paying instalments towards a handset they’d already paid for. The regulator says it’s “unacceptable” that mobile providers are not transparent about the separate costs of a handset and airtime within a contract.

It’s now consulting on two possible solutions. Mobile firms could be required to clearly break down the different costs within a contract – or they could even be forced to move customers to a cheaper default deal once their minimum contract term is up.

Today’s announcement follows a major report from Citizens Advice last week, which found some mobile users pay up to £38/mth for a phone they already own.

How could the rules change?

The regulator says it’s consulting on two possible options – it hasn’t yet said if it might enact just one of the proposals or both:

  1. Greater transparency on prices. This would require mobile firms to break down the cost of the different parts of mobile packages. The information would be provided clearly when you first sign up to a contract, and again at the end of the minimum contract period.

    This builds on Ofcom’s existing plans to require mobile providers to send customers alerts when their initial contract is coming to an end.

  2. Automatic fairer tariffs at the end of the minimum contract period. This would mean mobile firms would move customers to a different ‘default’ deal when their minimum contract period ends, so they stop paying for their handset, and instead pay only for airtime.

Ofcom will be seeking comments on these proposals until 7 November. It will then look at the responses and evidence before publishing detailed proposals in the New Year.

We asked the regulator when the proposals could come into effect and it told us there were no definite timescales, but it could be “early next year”.

What does Ofcom say?

In its report today, the regulator said: “While most customers receive good value for money, Ofcom is concerned that a significant minority continue to pay the same price after the end of their minimum contract period, often 18 or 24 months. We estimate that 1.5 million consumers are in this situation, and are still paying instalments towards a handset that they have already paid off.

“We are also concerned that, when a mobile customer signs up for a bundled contract, providers are not transparent about the respective costs of the handset and the airtime. This means customers cannot tell how much they are paying for the different parts of their deal.

“We think this is unacceptable. Consumers should be able to clearly identify the goods and services they are paying for, so they can make an informed decision about what to buy – and what to do when the minimum term of their contract ends.”

New computer boost for Essex residents

Essex residents are learning how to make the most of the online world with brand new computer equipment.

Sanctuary Housing has teamed up with Mitie’s property management business to provide Rayleigh & Rochford District Association for Voluntary Service (RRAVS) with £3,000 of laptops and tablets.

These will be used for computer training courses teaching the basics of the Internet and email, the next of which will be held at Bell House scheme for older people in Great Wakering.

The two-hour Computer Access Training sessions will run for five weeks and will also show residents how to edit pictures and use social media.

Read more here

Goodbye Wonga, hello ‘Get-Paid-As-You-Go Wagestream service

Fintech startup Wagestream, whose ‘Get-Paid-As-You-Go service allows workers to access their monthly wages in real-time, has launched its revolutionary service in the UK. The company aims to end the ‘payday poverty cycle’, and last-resort measures like payday loans along with it.

Read the London Loves Business article here

Jeff Bezos and Bill Gates back UK FinTech startup Wagestream

Amazon’s and Microsoft’s billionaire founders have backed a UK FinTech startup that enables employees to get their salaries early.

According to The Times, Wagestream, which seeks to put an end to the “payday poverty cycle”, raised £4.5m from investors including Bill Gates and Jeff Bezos.

The startup has created a mobile app which enables employees of participating businesses to gain access to funds from their salary packages for a flat fee of £1.75.

The total sum is then taken from the employees’ salaries on pay day.

Wagestream has launched a pilot with 25 businesses, employing 20,000 people.

Participants to date include gym chain David Lloyd.

Peter Briffett, the founder, said he hoped to “stop people getting into cycles of debt and poverty”.

“By giving workers access to their earnings, they can stop making financially distressing decisions such as taking out a payday loan. There is an instant link between work and reward,” he added.

The news of the raise comes weeks after the collapse of Wonga, widely credited with being the UK’s biggest payday loan provider.

Wonga, founded in London in the Autumn of 2006, provided “short-term, high-cost credit” and had operations in the UK, Poland, Spain and South Africa.

Bill Gates and Jeff Bezos among backers of £4.5m Wagestream start-up fund

The founders of Amazon and Microsoft have backed a London start-up that allows workers to access their wages before payday.

“Get-paid-as-you-go” platform Wagestream has received £4.5m of funding from supporters including technology billionaires Jeff Bezos and Bill Gates.

Read moreWonga goes under: Controversial payday lender placed into administration

Wagestream, which aims to end the “payday poverty cycle”, allows employees to access money that has already been earned for a fee of £1.75 instead of waiting for a fixed monthly payday, and has been launched the week after the collapse of payday lender Wonga.

Co-founder and chief executive Peter Briffett said: “As we mark the death of one of the payday loan giants, we’re pleased to finally present a viable solution to help give the UK’s workforce the financial freedom they deserve.

“While the wider and long outdated issue of monthly pay cycles is in desperate need of modernisation, for far too long legal loan sharks have been exploiting the most disadvantaged consumers with crippling high-cost loans.

“By giving workers access to their earnings, they can prevent themselves from going into overdraft, credit card debt or the worst case, applying for a payday loan.

“The poverty premium is real. Lower income workers can often pay more than everyone else, despite struggling to make ends meet. At Wagestream we give people access to their earned income when they need it, without the need for employers to alter their usual payroll frequency.”

Employers that have already partnered with the platform include Key Security and Fourth, who provide hospitality staff for brands including Travelodge, David Lloyd Clubs and TGI Fridays.

Other investors include boutique venture capital firm Qed Investors, the London Mayor’s Co-Investment Fund, which backs the capital’s technology startups, and Fair by Design fund, which invests in companies designed to make an impact on the poverty premium.

Read moreLending firm Wonga closes doors to new loan applications

Fintech providers say their products could turn credit unions into challenger banks

Andrew Rabbitt from Incuto, which develops financial technology for credit unions, said new tech could “make credit unions into community-focused challenger banks …. faster than a payday lender, more functional than a bank, and cheap”.

Pitching his fintech to the ABCUL conference, he said it could offer new possibilities to the sector, such as partnering with the Post Office to offer branch facilities where members can deposit and withdraw money.

“That’s the kind of stuff that fintechs can do, it comes with a bank account and sort code,” he said. “It allows you to connect in a really safe and ethical way with the people you want to get in touch with.

“It also reaches people currently sat in banks wondering if there’s somewhere better to go.”

“We’re using innovative tools to make it fast and slick.”

Read more here

Scottish Police Credit Union launch on the Incuto platform

The Scottish Police Credit Union have launched their re-designed website on the Incuto platform.

Designed by the team at Incuto, the new website allows existing and new members access better services from their credit union. Designed with security and reliability at the forefront of development, the Incuto platform allows the Scottish Police Credit Union to offer 24/7 loan applications, a great member portal and member self-service of their contact details and credentials.

Within 24 hours of the launch, many members had updated their details, requested withdrawals and transfers, all from with website. The responsive nature of the new website gives the ability for members to access their account and all features via a mobile interface.

The team at Incuto said ‘we are extremely happy with the launch and look forward to supporting the continual growth of the Scottish Police Credit Union’.

Visit the new Scottish Police Credit Union website here.

We’re Recruiting…

The Fair by Design Change Programme will be launched in 2018 and is seeking a new leader.  Find all the details here:

Barrow Cadbury Trust takes on management of the Fair by Design Change Programme

The Joseph Rowntree Foundation (JRF), launched the Fair by Design Programme on 9 November 2017 aiming to eliminate the poverty premium within 10 years.  Backed by JRF, Big Society Capital and Nominet Trust, we’re delighted to announce that the management of the Fair by Design Change Programme will be taken on by Barrow Cadbury Trust from December 2017.

Our bold ambition, to eliminate the poverty premium within 10 years, has two strands; the Venture Programme and the Change Programme, which tackle the issue from different perspectives and which we hope will together achieve our mission.

The Venture Fund will invest in and accelerate businesses tackling the poverty premium, while the Change Programme, starting in April 2018, will encourage the eradication of the premium by working with corporate providers, policy makers, regulators and by raising awareness through public debate.

A Director to manage the Fair by Design Change Programme will be recruited in the New Year.  More details of the Fair by Design Change Programme will be available in early 2018.

Bristol University Report on the Poverty Premium

Our research partners, Bristol University, have today published their report ‘Making the Poverty Premium History – A Guide for Businesses and Policy Makers’.

Authors: Sara Davies and Andrea Finney
Funded by: Economic and Social Research Council
Published by: University of Bristol
Publication date: November 2017

The Poverty Premium: when households in poverty pay more for everyday goods and services. First coined in the 1960s it may be an old concept but it remains an important social issue today. And for the poorer households affected it is a real and pressing problem. We estimate that the average low-income household in 2016 paid a poverty premium of £490. Of course, there is no such thing as an average low-income household – depending on households’ needs, preferences and circumstances, some will have paid less while others will have paid more. Much more.

This guide offers an evidence-based foundation for addressing the poverty premium which considers the particular roles of business and government. It focuses on the three most significant areas of the poverty premium: household energy, insurance and credit.

Read the report here.

Fair by Design Fund boosted by £1m investment

We are delighted to announce that Nominet Trust has boosted the Fair by Design Fund by £1m.  Renowned for transforming lives with tech, Nominet Trust challenges themselves and others to think differently about the relationship between tech and society.



Launch of the Fair by Design Fund Hits the FT

UK investors are being offered the chance to make money by helping the poor through a new fund. The Fair By Design fund will invest in companies tackling the so-called “poverty premium” — the extra costs the poorest pay for essential goods and services, such as energy, credit and food. About 6m households pay an average of £500 a year in higher charges…

Read the full article here.

Huffington Post – Designing Out The Poverty Premium

Just over a year ago, the Prime Minister stood on the steps of Number 10 Downing Street and boldly committed to ‘tackle the burning injustices’ that impact low income communities. Since that moment a lot has happened, but one thing that has not changed is the existence of the Poverty Premium in Britain.

The poorest in society still pay more for those basic goods and services that we all rely on compared to those who are better off. With recent economic trends such as an increase in the average household debt being racked up, this is not a problem we can ignore any longer. A recent academic study into the Poverty Premium, produced by the Bristol University Financial Exclusion and Poverty Unit, found that on average the Poverty Premium cost the households on the lowest incomes £490 per year but this cost could be much higher if people inadvertently made the wrong choices. For some, that amount is the equivalent of a month’s rent, or the cost of insuring their car for the year – necessary costs which many people take for granted.

My colleagues at PwC and I have been working for over three years now with business, Whitehall and the third sector to encourage the development of new solutions to try to tackle the Poverty Premium – focusing specifically on the energy markets and financial services (we recently highlighted in our report with TheCityUK the role of the financial sector in meeting unmet societal needs).

We’ve found a genuine desire from business to do the right thing but translating this into tangible measures is more difficult. Two organisations which have participated in our programme of work are seeking to change this. Big Society Capital and the Joseph Rowntree Foundation have now partnered with Ascension Ventures to launch Fair by Design – an investment fund and programme specifically designed to find and support innovative new ways to end the Poverty Premium…

Source – Huffington Post


Digital Agenda – £20m anti-poverty initiative

Telefónica-owned Wayra UK opens its latest tech accelerator programme this week, supported by a new multi-agency fund worth up to £20m with a focus on helping eliminate the ‘poverty premium’ by 2027. Wayra’s Open Future_ North facility is based in Oldham.

Fair By Design LogoA new tech accelerator programme with a focus on tackling UK poverty opens its doors in Oldham, Greater Manchester, this week – confirming the news of a fund supporting the programme reported in DigitalAgenda last month.

Wayra Fair By Design will support up to seven tech startups a year across the north, based in the town’s Open Future_ North accelerator. It will back startups seeking to tackle the ‘poverty premium’, which sees people from low-income households paying more for the same products or services – including energy, insurance, borrowing, transport and food – than those who are better off financially.

“It should not cost more to be poor,” said Gary Stewart, director of Wayra UK…

Source – Digital Agenda

Techcrunch – Wayra UK launches accelerator to tackle the ‘poverty premium’

Wayra, the Telefónica backed accelerator network, is launching a new startup program in the UK that aims to tackle the so-called ‘poverty premium’ — whereby people on low incomes pay more for some goods and services.

The program, called Wayra Fair By Design, will support seven startups per year, falling into four broad areas: energy (primarily electricity and gas); finance; insurance; and geo-based costs which can be imposed due to someone’s geographical residence, such as paying higher prices for food, transport and insurance. Wayra says digital exclusion may also factor in this category.

Accepted startups can expect to receive around £70,000 in cash and services, including access to Wayra’s mentoring and investor network, as well as opportunities to work with Telefónica and its partners; and full access to co-working space at the Open Future_ North building in Oldham, which opens tomorrow.

Wayra says the program will invest in a combination of Community Interest Companies and charities, as well as private limited companies, including tech businesses. Start-ups developing solutions to open up more affordable credit options would be ideal candidates for the program, it adds.

Commenting in a statement, Gary Stewart, Director of Wayra UK, said: “It should not cost more to be poor. An entrepreneur’s central task is to offer a compelling, sustainable solution to big problems, and we can think of fewer problems bigger or more worthy of a solution than this one. We are eager to work with start-ups to make real progress in the battle against inequality.”

The program is backed by a new investment fund — called the Fair By Design Fund — which Wayra says has £8 million ready to deploy now, and a goal of raising £20 million in total — to invest in companies tackling the poverty premium, both via the accelerator program and in separate investments across the UK.

Funding is coming from a partnership between financial institution Big Society Capital, social policy research charity the Joseph Rowntree Foundation, investment fund manager Finance Birmingham and VC Ascension Ventures. The latter two will be managing the new fund.

The fund will invest in companies from seed through to Series A stage and beyond, including seeking deal-flow and co-investment opportunities from other funds, VCs and angel investors.

In another supporting statement, Chris Goulden, deputy director of policy and research at the Joseph Rowntree Foundation, added: “Reducing the cost of essential goods and services is critical for solving poverty in the UK. The poverty premium costs low-income households on average £490 a year. With higher inflation and low wage growth, tackling these premiums is vital for families struggling to make ends meet. This fund is an important step towards finding viable solutions to reducing extra costs faced by those on low incomes.”  
Source – Techcrunch

£15m fund to fight poverty premium

A new £15m venture fund for businesses working to eliminate the poverty premium is set to be unveiled next month, as a new accelerator programme opens in the English north to support tech startups working to reduce poverty at home and abroad. Julian Blake reports.

Some cheer for the one in five UK citizens living in poverty. Early-stage VC firm Ascension Ventures is to manage a new £15m ‘Fair by Design’ fund, created to help eliminate the ‘poverty premium’ by 2027.

Government statistics show that 14m people – more than 20% of the population – in the UK now live in poverty. The poverty premium sees people in poverty or on low incomes paying more for the same products or services than those better off financially.

Ascension will run the fund alongside long-standing investment partner Finance Birminghamand others.

Ventures supported by the fund will be working to eliminate the poverty premium across four sectors: financial services, energy, insurance, and food/household goods. The fund will support a combination of community interest companies and charities, as well as for-profit companies including tech startups.

Since 2013 Ascension has invested, across four distinct funds, in over 40 early-stage companies across the UK. It has backed several social impact businesses, including Edukit, Flashsticks, GiveVision, Highbrow, Looop, Night Zookeeper, Percent and The Skills Academy.

Ascension is recruiting for two roles to help manage the new fund – a programme director and an investment manager. Both will be based out of Manchester.

The initiative is also backed by Big Society Capital and the Joseph Rowntree Foundation…

Souce – Digital Agenda

The Independent – The ‘poverty premium’ pushing the Just About Managing to the edge

Poverty isn’t cheap. A combination of effects, including being unable to take advantage of the cheapest ways and opportunities to pay for goods and services, means that low-income households pay an average of £490 more for essentials each year compared to households where money isn’t quite so tight.

And that is just the average premium; for some households it is far, far higher. According to the study carried out by the University of Bristol, poorer households typically pay between £350 and £750 in “poverty premium” each year. Single-adult households were the hardest hit, followed by lone parents.

While the £490 figure is a smaller amount than previous estimates – Save The Children had previously suggested it could be as much as £1,300 a year – it is a significant sum for just-about-managing families.

As the report states: “The average poverty premium of £490 per year is undoubtedly a significant sum to low-income households. It might represent a family holiday, enough clothes and shoes for the children, keeping the home warm in the coldest winter months, all things considered important for a reasonable quality of life and avoidance of social and material deprivation.”

Not-so-premium products

The reasons for the extra expense vary, but they range across a wide number of essential goods and services – like paying to withdraw cash (£9 a year), using a pre-payment meter (£38 a year), using higher-cost credit like payday loans (£55 a year) and paying higher insurance premiums because of living in riskier areas (£84 a year).

However, those are just the average costs. Depending on what services or products each household needs, the costs can be eye-watering. If a household is unable to qualify for mainstream credit then they may have to turn to a doorstep loan costing an extra £540 or a payday loan that costs an additional £120.

Katie Schmuecker, head of policy at the Joseph Rowntree Foundation (JRF) explains: “Sometimes the preferences of, and constraints faced by, low-income consumers compound the problem – such as when people can’t afford to pay upfront for insurance and must pay extra to pay monthly; or the need to keep a tight control over a limited budget leads to the avoidance of direct debit, even though it’s usually cheaper.

“Lacking the internet, transport or affordable credit, all of which help people to get a better deal, makes matters even worse. The picture changes, with new poverty premiums emerging – and some disappearing – as products and markets change.”

The poverty premium doesn’t just hurt the households it directly affects. By tipping just-about-managing families into poverty it costs the taxpayer a significant sum as well.

Research from the JRF suggests that poverty costs the UK £78 billion a year, which translates into £1,200 for every person – equivalent to 4 per cent of our GDP. £1 in every £5 spent on public services goes towards supporting people in poverty or dealing with the fall-out.

Ending the poverty premium was the foundation’s very first step in its recent ambitious plan to end UK poverty by 2030.

Ms Schmueker elaborates: “Tackling the higher costs faced by lower income households is vital if we are to bring down poverty levels. To achieve this, Government should task regulators with identifying and eliminating poverty premiums in sectors like energy. We also need to see new products that are designed to meet the needs of people on lower incomes and, where this isn’t possible, provide other ways of compensating people for unfair additional costs.

“We also need people living in poverty to be given a bigger voice in the debate, which requires consumer organisations to have more funding, capacity and information to tackle the poverty premium.”

Source – The Independent

Acting on unfair poverty premiums must be a 2017 priority

The poverty premium costs low-income households on average £490 a year. With higher inflation forecast for 2017, tackling these unfair premiums on essentials will be even more vital for those who are just about managing, says Katie Schmuecker.

Reducing the cost of essential goods and services is as important as increasing incomes for reducing poverty in the UK.  The less people must spend on meeting their needs, the more cash in their pocket.  But unfair poverty premiums mean the poor are paying more for some essentials, exacerbating poverty and straining the budgets of the just about managing.

New research by Bristol University has laid bare the scale of the poverty premium for the first time.  They estimate that on average the poverty premium is costing low-income households £490 per year.  This research enables us to quantify for the first time the number of households subject to different types of poverty premium (see table).

Some premiums seem inconsequential, such as paying an extra £5 per year for a paper copy of an electric bill because you’re not online, or find it easier to keep on top of your budget with a paper copy. Others are eye watering, such as paying £540 over the odds for a doorstep loan because you can’t access mainstream credit or an additional £120 for a payday loan.

Averages can hide a multitude of different experiences, and the researchers found examples of families paying considerably more.  Take the single earner couple with one child who had an income of £16,500 per year, but were incurring a poverty premium of £1,860 because they had a prepayment meter for both electric and gas, paper billing for telecoms,  monthly payments to spread the cost of home contents and car insurance and several forms of high cost credit.  In another example an out-of-work family with an annual income of £9,800 was incurring a £1,300 poverty premium. Only an estimated 1% of low-income households were not incurring any sort of poverty premium…

Source – Joseph Rowntree Foundation

The Poverty Premium – When low-income households pay more for essential goods and services

Authors: Sara Davies, Andrea Finney and Yvette Hartfree
Funded by: Oak Foundation
Published by: University of Bristol
Publication date: November 2016

In the UK the poverty premium, the idea that poorer people pay more for essential goods and services, has been highlighted as an important social policy concern for low-income families.

This 2016 study revisits and advances earlier research conducted in 2010 by Save the Children. It reflects markets and household behaviour as it exists today, and, for the first time, explores how manylow-income households are actually affected by the poverty premium, and by how much.

The Poverty Premium (Key Findings) (PDF, 434kB)

Paying to be poor: uncovering the scale and nature of the poverty premium (PDF, 1,365kB)

Paying to be poor (Methodological Appendix) (PDF, 720kB)

Paying to be poor (Costing Appendix) (PDF, 665kB)

Source – University of Bristol

Big Society Capital – Poverty Premium

People in poverty or on low incomes often pay more for the same products or services than people who are better off financially.

This is called the “poverty premium” – the extra cost of being poor.  The poverty premium is often dubbed the ‘double penalty’: in addition to not being able to buy many goods and services, people in poverty also end up paying more for the ones they can buy.

There is not one ‘poverty premium’, but many increments in cost that when added together can represent a significant drain on tight personal budgets. Such increments or premiums are most concentrated in four sectors and are typically centred around a specific set of issues: in energy & utilities and telecommunications, poverty premiums are paid through prepaid tariffs and/or lack of being an ‘actively switching consumer’; in financial services, the poverty premium manifests itself mostly through high-cost credit and issues around financial exclusion; and finally, in household goods, the rent-to-own model of buying household goods financed by extremely high-cost weekly payments (e.g. through shops such as BrightHouse) results in people paying high amounts for essential items, often three or four times the original price.

Potential social investment solution

Big Society Capital in partnership with Joseph Rowntree Foundation is developing a targeted holistic programme designed to eliminate the poverty premium by 2027.

It will do this in two main ways. First, it will develop a Venture Development Programme underpinned by research and evaluation, impact monitoring, and a strong advisory network of sector experts and mentors. This will support ventures primarily working to eliminate the poverty premium in the four key sectors of financial services, energy, telecommunications and household goods, but will also consider cost reducing ventures in areas of large wallet share for people in poverty (e.g. food). We are currently considering applications from fund managers to run this fund. Secondly, it will build a strong campaigning arm to advocate for better policy, influence corporate behaviour and inspire the public to rally around this issue.

Source – Big Society Capital

Chief Executive of Big Society Capital – Huffington Post

Cliff Prior CBE is Chief Executive of Big Society Capital. Prior to that he was CEO of UnLtd, the UK Foundation for Social Entrepreneurs. UnLtd has supported 13,000 people to start new social ventures.

Before UnLtd, Cliff was CEO of Rethink, the charity for people affected by severe mental illness. His earlier career includes work in counselling, youth, civil rights campaigning, social housing, supported housing, community care, offender resettlement, learning disability, dementia, research and development, and mental health.

Cliff is also a founding trustee of Clore Social Leadership, a non-exec at health innovation agency UCLPartners, and Comic Relief’s UK Grants Committee. He chaired the mission alignment group for the G8 Social Impact Investment Taskforce.

He has been an adviser to Government on health and medicines regulation, NHS modernisation, skills, and civil society.

Source – Huffington Post

The Guardian – Poverty premium: why it costs so much more to be poor

Being poor comes at a cost. The best bank accounts, borrowing rates and energy tariffs are all reserved for people who are in a position to shop around. And if you do not have a clean credit file or access to up-to-date technology you can expect to pay more for almost everything you buy.

In the summer, Citizens Advice Scotland reported that people living in poverty were paying roughly 10% more for essential goods and services, while according to a report from 2014 by the east London charity Toynbee Hall, residents of Tower Hamlets pay a “poverty premium” of up to £1,014 a year, consisting mostly of higher energy costs, car insurance and loans.

This isn’t a matter of not being a savvy shopper or failing to compare prices before you buy. It is a matter of not having access to the best deals. When every penny counts, being charged more than the next person for the same goods and services can cause bigger problems further down the line.

The cost of being poor

Higher energy costs can be the hardest to avoid. Energy bought through prepayment meters is still more expensive than that bought on a standard tariff paid for by direct debit, and the premium over online accounts is even bigger. In July, Citizens Advice said prepayment customers were paying on average £226 a year more for their energy than those on the cheapest online deals.

Householders can switch between prepayment tariffs, but there is little competition so the choice – and saving – is limited. To get the best deals, as well as internet access, you need a good credit record. Even with these, private renters can find it hard to switch payment types. While the regulator Ofgem says a landlord cannot prevent you switching meters, you may have to switch back at the end of the tenancy, and the associated costs could be off-putting…

Source – The Guardian