The Cambridge Network takes a measured and thoughtful look at the resilience of the UK’s FinTech sector. Resilience will certainly be required. Below, we offer an excerpt from the piece – which can be found in full by clicking here.
As members of the UK tech sector meet virtually during #LTWConnects events, figures show UK digital tech companies are continuing to attract investment, are still advertising vacancies and are optimistic that they can navigate the crisis. On measures including investment raised by companies and capital raised by investors, which will help sustain the sector for the long term, the UK outperforms all of its European neighbours.
Just as the 2008 financial crisis triggered an entrepreneurship boom in the UK, from which Silicon Roundabout’s cluster of startups has grown into a nationwide network of more than 35,000 businesses, the report demonstrates that UK tech is resilient and has deep foundations to emerge strongly from the crisis. Tens of thousands of jobs were advertised in cities across the UK in 2019 and the start of 2020, with salaries continuing to grow well-above inflation in almost all regions.
The UK capital continues to lead the way and is now established as a global tech leader with London-based companies raising $4bn since the start of January, more than Paris, Stockholm, Berlin and Tel Aviv combined. Fintech dominates fundraising in the capital, accounting for 39% of 2020 fundraisings. Enterprise software companies raised a fifth of the money invested in the first five months of the year.
Digital Secretary Oliver Dowden said: “The UK’s tech sector has shown resilience in these challenging times and the levels of investment in the year to date have consolidated our Europe-leading position.”
Historical Performance And IFISA Process Guide
That figure is the result of over £21 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.