Zopa’s co-founder named one of the coolest people in fintech
In the last week of April, our co-founder and Executive Chairman, Giles Andrews, was included in Business Insider’s list of the 40 coolest people in fintech.
Research published this month by Zopa challenged the received wisdom that young people – in particular the millennials aged between 18 and 35 – are less responsible than their parents’ generation when it comes to looking after their finances.
Both the Mirror and the Sun reported our study, which found that this age group stashed a greater proportion of their income in the likes of ISAs, and were generally more concerned with finding the best deals on everything from financial products to holidays and groceries.
At the same time, millennials appear to be more confident when coping with debt – they have a much higher threshold for what is considered a “manageable” level of borrowing.
Giles Andrews, Zopa’s co-founder and executive chairman, was quoted in both newspapers, saying: “This research shows that most young people have a very responsible and positive attitude towards their finances, in most cases beating the odds heavily stacked against them.”
With the official introduction of the new Innovative Finance ISA this month, Zopa’s chief product officer Andrew Lawson was interviewed by the Financial Adviser to explore how the new scheme would work, while looking also at the concept of peer-to-peer lending.
Lawson explained that Zopa was planning to launch its own ISA “in a couple of months”, once Financial Conduct Authority permission had been obtained. He said: “You have savings, which are safe and are government-backed, and you don’t earn a return, or you can do more risky things and get a better return, and you do stocks and shares. P2P sits between the two.”
The Telegraph published a feature looking at the recent explosion in the number of companies in the financial technology or fintech sector. Writer Matthew Lynn pointed out that the big banks were finding it difficult to compete with the smaller, more agile firms that had been set up to disrupt activities such as savings, lending and currency exchange.
Lynn said that although the banks were trying to invest in these new businesses, their chances of doing so successfully were limited.
Meanwhile, the Financial Times reported that asset manager BlackRock had made its first retail investment in P2P loans, with the £12.7m purchase of shares in Funding Circle’s investment trust.
Personal Savings Allowance arrives
April also marked the introduction of the Personal Savings Allowance (PSA) announced by Chancellor George Osborne last year. The PSA allows basic-rate taxpayers to receive up to £1,000 a year in interest tax-free (higher-rate taxpayers get a £500 allowance).
The PSA is available to P2P lenders as well, and it is expected to mean that the majority of people no longer pay any income tax on the interest they earn. Until this month, banks and other financial companies have automatically deducted tax at the basic rate (20%) from their customers’ accounts, but this practice will now cease.
For more information on how the PSA works and how you will be affected, take a look at our Personal Savings Allowance guide.