Pockit, the UK fintech providing vital financial services to people whose needs aren’t met by the traditional banking system, have announced the official launch of its Income Advance product, enabled by its partner SteadyPay.
The service will help meet the growing demand for affordable credit among the large cohort of UK consumers excluded from mainstream lending products, allowing Pockit’s customers to better manage their cash flow without turning to unlicensed and high-cost short-term lenders.
Pockit’s Income Advance product allows customers to borrow money, starting at £50, which is automatically repaid from the next instalment of their regular income payment. The service costs a flat £4.99 fee per advance, with no additional interest charged, and is available to customers whose income is paid directly into a Pockit account. Pockit has partnered with consumer lender, SteadyPay, to help perform the credit assessment, to provide underwriting activities required to ensure that all loans are responsible and affordable and to fund the loan book.
Prior to today’s official launch, the Income Advance service has gone through multiple test phases. During these tests, Pockit has consistently seen take-up rates of approximately 50% among its existing customers who have been offered the Income Advance service, demonstrating the strength of demand. To date, Pockit has extended over 7,000 monthly advances against its customers’ salaries, with extremely strong repayment performance. The success of these tests has led to the decision to open the service up to all eligible Pockit customers.
The launch comes as UK consumers are squeezed by the twin pressures of cost-of-living increases and reduced availability of credit. As of October 2023, 4.2 million households were going without essentials, according to the Joseph Rowntree Foundation.
Meanwhile, research published by ClearScore and EY in February 2024 found that the number of loans extended to UK customers with the lowest credit scores had fallen by 76% since 2019. This combination has fuelled an increase in people seeking credit from unregulated providers: a June 2023 survey revealed that over three million people had borrowed money from an unlicensed or unauthorised money lender in the previous three years.
“No one should have to turn to unlicensed, unscrupulous and potentially dangerous sources of finance just to make ends meet,” said Virraj Jatania, CEO and Founder of Pockit. “Following a really successful testing period, we’re delighted to be rolling this fully regulated service out to all eligible Pockit customers, to make sure they have a safe and reliable way to manage their spending from month to month.”
“The level of take-up we’ve seen from customers so far is testament to the demand that exists for this kind of modest income advance, particularly for those working shifts, in the gig economy or other less regularly paid forms of employment. They are part of the large portion of the UK population that is woefully underserved by high-street banks, while the number of specialist credit providers who cater for this demographic has drastically shrunk in the last few years. We think it’s crucial that we can provide our customers with a full range of financial services to help them weather financial shocks, build their credit profiles and get their finances back on track.”
John Downie, CEO and Founder at SteadyPay, added: “Our partnership with Pockit is perfectly suited to filling the gap in the market for responsible, affordable and regulated funding for those who struggle to access credit from mainstream providers.
“It combines our specialism in AI-based underwriting and our funding capabilities with Pockit’s relationships with a large and loyal customer base who want the same choice of essential financial products that many other people in the UK take for granted.”
