Technology
Episode 208: Concerning Lending Reality, Financial Education & wac on Wage Theft Crisis
In Episode 208 of The FinTech Times News and Views podcast, hosts Tom and Frances discuss critical issues surrounding wage theft in the UK and the importance of financial education. They delve into in...
Episode 208: Concerning Lending Reality, Financial Education & wac on Wage Theft Crisis
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Welcome to The FinTech Times News and Views podcast.
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Established in 2016, The FinTech Times is a global multimedia news outlet centered around
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the world's first leading FinTech newspaper.
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We report on the latest and brightest ideas from The FinTech World.
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Hello, hello, and welcome back to The FinTech Times News and Views podcast.
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I am here as ever with Tom and Frances.
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How are you doing this week?
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It has been a very busy week this week.
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We've had so much news we've been working non-stop and it's just been, yeah, a crazy, crazy week to me.
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We've got some really cool stories to bring to the table today.
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Any other exciting to see what we've got to talk about?
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Awesome stuff. Love that.
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Frances, how are you doing?
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Yeah, really. I've got everything Tom just said.
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It's been very busy, but I'm really excited about the articles that we're going to be talking about today.
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Amazing. And to be able to discuss what is it that you guys are going to be talking about, Tom, what's your article on?
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So my article comes from a recent interview that I did with The Fender of WACC.
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All about how the UK government has recovered over £7 million for workers who are underpaid,
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but WACC suggests that actually it's just a drop in the ocean.
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A lot more work needs to be done.
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Cool, cool, cool, awesome.
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And Frances, how about you?
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What are you going to be talking about today?
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So today I want to talk about some new research from Go Henry about kids wanting to learn
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how to earn, save and spend and invest all while they're at school.
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Amazing. And mine is all about lending and how a third of UK adults don't really understand
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basic lending terms and that is new research from lockbox.
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So let's get it started.
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Tom, I'm going to let you go first because it sounds WACC.
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Do you like my pun? I don't know.
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I've committed to it.
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I love that. I mean, I hope it sounds better than WACC, but we'll get into it anyway.
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Because it is a really interesting story.
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And it comes after in May this year, the UK government announced that it helps put a total of £7.4 million
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back into the pockets of 60,000 workers who had been paid less than they're entitled to
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by their employers.
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So, you know, through a range of things being they weren't paid for their breaks,
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they weren't paid for overtime, you know, a range of different factors.
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They weren't paid what they were owed.
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And the government put this big announcement out that looked like, you know, big success story.
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They were saying how is part of the government's plan for change and then the move to make work pay.
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It's managed to ensure that millions were rightfully returned to hard work in UK citizens.
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And it also named and shamed 518 companies who were guilty of underpaying staff.
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However, in my recent interview, I found that WACC says that the announcement shouldn't be
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framed as a win because the recovered money is only a tiny proportion of the actual
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amount that UK workers have been underpaid and will likely continue to be in the future.
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And I spoke to George Fairhall who's the founder of WACC and she said that 7.4 million
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back in the pockets of UK workers is a good headline, but in the reality it's only a drop in the ocean.
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And she said that their data showed that wage fair is more prevalent than ever
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and only a small portion gets reported, let alone investigated.
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And she basically explained that she thought most businesses got off lightly with, you know,
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some of them were only just investigated and named and shamed, but they weren't actually
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fined, some were fined, but you know, what ended up being very, very small amounts.
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And in our discussion she basically explained that a WACC survey of 21,000 users revealed
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that actually just under half or 45% of its user base is currently being underpaid
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largely due to misrecorded shifts and paid breaks in correct rates or missing overtime.
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And the basically she looked into the House of Commons Library research and not only
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states that between 4 and 9% of UK workers are in quotation marks likely underpaid and it's
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clear that there's a disconnect between the government findings and what actually is happening
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in reality. And the reason I want to bring this story to the table today is because I've always
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such a widespread consumer issue, I'm sure both of you have dealt with similar kind of issues
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in the past. I know that when I used to work in hospitality industry I was definitely underpaid
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a few times times where I worked extra at the end of my break, end of my shift and wasn't paid
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what I was owed. And I think it's such a huge thing and basically WACC's whole aim here is to try
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and increase knowledge of this issue and tell people they actually can report when they're underpaid
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and try and get support. And basically what WACC is, it's an app that helps you with track
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their hours and it also has a location tracking in the app and creates a report to basically say
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he's proof that I was working in these hours, I was on site at these hours and help them
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get their money back more easily. And I'm really out to want to get you all guys take on
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this issue and what do you think could be done to kind of reduce this because she says there could
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be tens of millions, if not hundreds of millions actually owed back to people in the last few years
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at least. And I think there's a real issue there that people are really out of pocket because this
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this issue and I think there's so much that needs to be done. So I just wanted to get you all
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guys take on, have you had personal experience with this kind of issue and what do you think of WACC's
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kind of initiative? Paulio comes to you first. Yeah, I think what WACC is doing is so important.
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And I think I kind of agree with what George Fahel was saying, 7.4 million pounds sounds
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really good. Like she says it makes a really good headline. But the fact that wage theft
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is such a prevalent issue. I think it's actually quite not surprising but I think that that is kind
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of the word I want to use because you don't really hear a lot about things like this and this
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you know it's something that's maybe happened to you or someone you know that the sort of
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how prevalent wage theft is is actually quite shocking and I think it's really quite you know it's
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quite disturbing really how often this happens to people especially you know hardworking people just
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wanting to get paid and get everything sorted. So I think this is really interesting and I guess
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you know it's it's really important that we hold businesses accountable and also to like like
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they said raise awareness of the issue because you know like I said I think it's something that you
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don't necessarily hear a lot about and I think you know I like the points that WACC have made in terms
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of how to address the issue you know having the awareness campaigns working with different
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experts to provide support and you know short the time to investigate wage complaints and things
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like that and I guess this is just you know in this in this day and age it's just really surprising
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that something that we still have to deal with and I guess that you know especially with the
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the vast way we have you know FinTech right now that there's a FinTech for everything you think
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that'd be almost some way to like solve this problem via a FinTech solution like you know FinTech
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do everything else and why haven't we solved this so yeah I think it's really it's really worrying
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a really upsetting this is a issue it's great that WACC is you know coming in to try and push and it's
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great that the government obviously are already on it in some way but yeah obviously more needs to
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be done and people shouldn't be you know having wage theft in 2025 let's all be honest with ourselves
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yeah exactly and I think you know it's such a widespread issue and I think one of the things that
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really struck me is if you look at the the government announcement from me they listed all the companies
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that were with guilty of this and you know how much they'd underpaid they workers by and how many
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workers that actually underpaid and you know you see some really recognizable names you know big brands
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it's not just small companies that are doing this some of the largest brands in the UK are doing
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as well the likes of pizza express you know failed to pay the 760 thousand pounds to eight hundred
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so eight thousand four hundred seventy workers you've got little who failed to pay two hundred
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eighty six thousand pounds or just over that to a little over three thousand workers I think it
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just goes to show that even the biggest brands are guilty of this and it's not just the case of all
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you know there's some some smaller companies that are you know doing this under the radar
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it's big companies of all sizes that are guilty of this and then right towards the end of the list
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you've got some of you know underpaid workers by you know in hundreds of pounds but I want to come
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to you fans and get your take on you know what you think of this news and what your reaction to it is
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yeah I mean it's very disturbing it's sort of you guys both said in that you know despite it being
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a good headline and quotation marks it kind of is just a tiny fraction of what needs to be done
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and I think what I found most interesting from the article really is the sort of recommendations
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that Wacker sort of suggesting in that you know there needs to be a shorter time to investigate
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wage complaints you know funding awareness campaigns are workers know their rights and you know
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working with experts like Wack to provide users with more support and tools to keep track of their
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work but for me it's I think it's the second one really that really stood out and that that you
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workers need to have more awareness on on their rights and what they can actually do and especially
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against big companies I mean it's the same against small small companies but I mean especially
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against the big ones where you think you know their legal teams are going to be really strong they
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can really fund a lot of money in any sort of lawsuit and you know make it a little bit more of
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an uphill battle really but that I think if users or workers had more awareness of actually what
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they are entitled to do and knowing themselves without necessarily having to go to an expert
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or having just sort of a baseline idea I think that would really encourage people to sort of come
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forward and hopefully help address the issue a little bit further but yeah no it's definitely
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something I'm hoping to see remedied very quickly and after all I think probably you know these
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businesses that that are doing that just need to be polished further really I mean there's got
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to be some sort of thing that disincentivises this incentivises sort of these failed payments you know
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so yeah hopefully more will be done to address this no definitely I think one of the key points
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that the whack is really trying to show is you know how it's also trying to support financial
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education and really not only that financial aspect with teach people their legal rights as well
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and I think that kind of leads quite nicely into both of your articles regarding you know just
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awareness and education so probably why don't we kick off with your article next absolutely we all
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love a bit of awareness and education on this podcast I feel like it's always talking about
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sometimes but it is important and yeah you're absolutely right it does lead in real
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isolated to my article so basically lock box has found that in their new report called
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borrowing money in the UK what people get wrong and how to get it right they found that despite
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the average credit score in the UK being 644 on the Equifax scale which is a can score considered
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to be fair a third of UK adults don't actually understand basic borrowing terms so a lot of people
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use credit and obviously credit when used correctly can be really helpful in order to help people
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you know manage their finances and things like that the lock box has really found that one intent
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brits are invisible and a further one intent are turning to buy now pay later in order to be able to
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pay for essentials like full food and fuel it's kind of really showing the risks associated with it
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so I think you know lock box is saying that you know people can feel really pushed into a corner when
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money is tight or their finances aren't doing what they should be doing and they need to you know
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access you know like like food and fuel and and things that are you know deemed essentials
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and so when they're kind of in that sticky spot and they don't really have any other choice
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they're going towards the borrowing and the credit without necessarily thinking about the
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repayment aspect of it so and even so like you know according to lock box confusing language
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unclear terms and like hidden fees in arrangements can really leave people unsure of what they
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signed up to and you know for some excluded from mainstream credit you know they've kind of been
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got even less options than everyone else and have to go towards what they call high street loan
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sharks for the money that they need you know which is obviously not great for a lot of reasons
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mainly because there's no legal protection really high interest rates and fees and you know it's
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just probably just some guy on a street court and I think it reminds me a lot of a lot of the
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narratives that were around payday loans a couple of years ago you know payday loads came in as
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this whole big thing about to manage your finances then suddenly it was kind of a case of no never
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going to pay day loan they're terrible for you the interest rate is crazy you pay so much money back
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blah blah blah blah blah and and so I guess this is kind of a bit of a version of that um so yeah I
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love to get your guys uh in on this and kind of what you think uh needs to be done obviously you know
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I think we took again we talked a lot about a financial education and that sort of thing and there's
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loads of different findings from the lock box research um but essentially I think you know lock
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box is really keen to help people in the UK better understand credit and the impact you can have
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on their finances um so you know I'd love to know what you guys think about sort of you know
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developing these healthier habits and and what needs to be done I mean Francis I'll go to you
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first what what what to take on this I mean it's it's nice to sort of you know we always sort of say
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about financial education we hope more companies will do things like this and you know that it's a
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really good start and that we we're hoping for like almost a ripple effect and I feel like this
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is definitely that that emotion essentially and I'm sure it will sort of impact other organizations
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to really wake up and you know make sure that there is awareness and education because at the end
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of the day like like you were saying that education is just so so crucial and um I think that the
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lock box offering and sort of the ability to create these um smart personal finance tools can really
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educate people and really sort of alleviate a lot of stress and I think it's interesting that 80%
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of members felt better about their financial situation after using lock box um and almost 9
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and 10 members who now track their credit scores have seen improvements so I think it's um it's
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just a really sort of financial education and financial awareness in action type of article um
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and to be honest I don't think there's anything necessarily too revolutionary it's not anything we
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haven't spoken about before but it's just really nice to see it sort of working and being successful
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and sort of making people aware that you know these are the ways that you can improve your
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financial situation and these are the ways that you can avoid making it worse and it sounds
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simple on paper but I think in any situation when you become sort of desperate about you know
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trying to get pennies together to pay bills or whatever it might be I think that is really where this
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these platforms come in really handy so yeah no I think it's a really good article
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yeah I think you're absolutely right you know and you'd like to let you say when you're desperate
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it's hard to know where to turn but yeah things like lock box can really be helpful I guess just
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having that kind of understanding I know again it's something we've talked about so many times
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just in terms of like how to handle finances and know what you're signing up for when you're
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signing up for it and making sure you can afford the credit that you're borrowing you know it's kind
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of all these things but I guess even you know when you're in that situation of you don't really have
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much other choice you're kind of not thinking about that you know you're just thinking I need to get
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the food on the table no matter what so you know you can see why people maybe are falling for
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not great agreements and not great solutions when they're trying to find credit but I mean Tom what
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what's your take on the whole thing I really just want to mirror what you guys have said already I
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think you know to to sum it up it's just the the fact that financial education and awareness is
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always going to be king anyway that we can you know improve that education and awareness is always
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going to be positive factor and it's good to lock boxer really try to take that on and improve
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it themselves you know people's knowledge of the credit products that are available to them um so
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I think it's a really good you know bit of news and I think it's just a similar story that you've
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had in the past is just ultimately we really want to improve education and and sort of knowledge
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of different offerings that people have um just to ensure that people are you know getting the best
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sort of financial world being out of it yeah 100% I think you know there's there's not really much
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that I can add on to what you guys have said I think you're absolutely right you know it's it's
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just one of the things that we we just need to be aware of and I guess help where
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help is needed and hopefully you know as we move you know into this more sort of digital first
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world that we're creating that's going to come with it a lot more finance financial knowledge and
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and things as you know and hopefully just things get better for people just in general but I mean
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why don't we move on to Francis your article yeah thanks so in the light of financial education
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I think this ties in really nicely uh so young people want to learn more about money in school
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according to new research from Go Henry it said that 84% of kids want to see financial
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education in the government's new national curriculum according to a survey of over 2006 to 18
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year olds uh the same proportion said that financial education is equally or more important the
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maths English and science while nine and ten agree it will help them in adult life and work
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meanwhile 68% of 18 year olds worried about leaving school without any money skills
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Go Henry is renewing its school to make financial education compulsory from primary school
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as the government continues its review of the national curriculum led by professor Becky Francis
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so kids want would like to start honing in their money skills from a young age with 52% of
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six to ten year olds saying they would like to learn about financial education in primary school
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in terms of where it sits on the curriculum 33% of six to 18 year olds think financial
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education should be taught as part of PSHE and this is what Go Henry is calling for in its
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financial education manifesto so of the kids who want to be taught financial education in school
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the most popular money topics are how to save money with 46% how to buy a house 34%
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also 34% is how to earn money and build a career and then at 31% is how to create a budget and how to
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use a bank account so I just wanted to talk about these findings and see if you know do you
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are you surprised at this and to be honest I thought it found it quite funny because when I was
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in primary school I could never imagine if someone sort of saying so financial education what do you
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think about it because I don't think I would have had a clue of what to say but the idea of somebody
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saying we're going to help you save money and we're going to show you how or what the best way to buy a
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house is I think it I actually would have quite like that so I wanted to see what you guys think
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you would have liked that sort of in PSHE in primary school as well probably I'll go to you first
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yes I yes I would have loved that that was kind of I ran for head girl when I was in secondary
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school and that was like my whole thing in the matter in my manifesto was that I think we should be
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doing actual practical things about money and life and things like that and I think it's funny
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you're right when you say you know if in primary school if someone had said hey this is this is
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what a mortgage is I'd have been like her but you know I think it comes with that that people
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well kids and stuff are learning a bit more about money in the way things like that work
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earlier purely just because of the fact that you know cash is reduced in favor of like digital
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methods so I think they're kind of having to have an understanding of money and things like that
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in from an earlier age so it makes sense that you know we're starting early and the early you start
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the better it is so like I don't see any negatives about getting these kind of things in school
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and I think it would save it would have saved me a whole lot of time and effort and money issues
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in my early 20s and I'm still trying to figure everything out if someone actually sat down
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and really honed it in at an early age about like how to save money how to do this how to create a
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budget blah blah blah um you know and I think the we talk about financial education so much and
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there's just a lack of it in any kind of sort of school settings let's be honest so to bring it
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into schools to make it easy for kids to understand I literally I see no negatives I see no
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downside to that so absolutely I you know I really support this entirely and wish it was around
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when I was in school 100% and Tom what do you think yeah I agree and at risk of well to avoid actually
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sounding like a broken record oh I really want to say is that you know this is obviously such a
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a good call and and something we've heard so you know since I joined the FinTech times it's a call
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for you know more financial education in schools you know it's been ever present really so I think
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it makes sense why why wouldn't it be added to the national curriculum I think is something that
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there's a lot of appetite for kids who would actually be very engaged with because they see the
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value in it so yeah I think it's a really really good call and and something that I'm surprised
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hasn't had more of a push already in the past because I think it's something that has obvious
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benefits and no rule downsides amazing well that does bring us to the end of our discussion today
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thank you guys so much for bringing your articles if you want to hear anything more but anything we
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say today or anything else from the FinTech world head on over to FinTech times dot com it's
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putting more news and insights over there but anyway guys thank you so much for joining me once
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again it's great to have the gang all back together and I will catch you on the next one see you guys
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next week see you then thanks for listening to the FinTech times news and views podcast don't miss
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