Ahead of the first Budget of the Burnham government, the UK FinTech community has a clear message for the Chancellor: our sector is one of the most important allies in helping this government achieve its ambition around driving good growth in every postcode.

For more than a decade, the innovative tools and services created by UK FinTech have had a profoundly positive impact on the lives of everyday people. Whether it is supporting first-time home buyers, helping hard working people grow their savings and make their money work better for them, helping families navigate the cost of living crisis, or putting financial education at people’s fingertips, FinTech is delivering tangible economic and social impact across the country.

More than 68% of all SME lending across the country is today being done by challenger banks and alternative lenders – FinTech is truly powering up the engine of our UK economy. Moreover, FinTech is the subsector of financial services which continually sees the highest level of job creation, driving growth in every corner of the UK.

And despite the repeated economic headwinds we have faced as a nation over the past decade, FinTech has remained one of the UK’s true and undisputed growth success stories on both the domestic and global stage. It is a prime example of a sector where collaboration between industry, government and regulators have enabled the UK to be genuinely world-leading – we have secured more investment into FinTech than any other country in the world bar the United States, and we far surpass our European peers.

FinTech has already proven itself as a tremendous force for good for the UK, driving hugely positive impact to families and small businesses across the country – and we stand at the ready to deliver even more.

This Budget is the opportunity for the Government to back our thriving sector and enable it to deliver even further benefits. To achieve this, we need to see four core policy priorities being progressed:

1. Unlock more finance for SMEs through challenger banks

We recommend that the Government commissions the PRA to launch a holistic review of bank capital requirements to ensure proportionate treatment of challenger banks. More immediately, we recommend the Bank Corporation Tax Surcharge threshold rise from £100 million to £500 million, to promote retail competition, support UK listings, and boost SME lending across the country.

2. Make the UK the world leader in AI in financial services by 2030

The UK has a unique opportunity to combine its pro-innovation approach to AI with its leadership in Open Banking and Smart Data to become a world leader in trusted agentic commerce and finance. We recommend the Government brings forward the legal and regulatory basis for Open Finance, and prioritises AI-enabled financial guidance, savings, investments and SME finance as the first use cases, by the end of 2026.

3. Strengthen the UK’s talent, investment and entrepreneurial ecosystem

The Budget is an opportunity to modernise employee share ownership so high-growth FinTechs can compete for talent with Big Tech and incumbent banks, by expanding Enterprise Management Incentives (EMI) eligibility and limits and reforming Company Share Option Plans (CSOPs). Government should also introduce a Scale-up Reinvestment Relief and abolish stamp duty on UK listed shares to boost reinvestment by founders and domestic investment. Together, these measures could unlock over £1 billion in additional investment in UK FinTech and up to £250 billion in UK listed equity demand.

4. Establish the UK as a global leader in sterling stablecoins

At this Budget, the Government should offer clear and unambiguous support for Sterling stablecoins through a coordinated strategy that treats regulated stablecoins as cash-equivalent digital money and ensures a level playing field with other forms of digital money. This should include updating accounting standards and committing to accept stablecoins as payment for Government services and tax.

UK FinTech is already delivering the Government’s ambition for good growth: creating skilled jobs, attracting investment, and expanding access to financial services for businesses and individuals in every postcode. This Budget is an opportunity to build on that success, for the benefit of consumers and small businesses across the country.

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