With economic growth, the cost-of-living pressures and business confidence high on the agenda, the Budget included new incentives for founders, measures to improve access to finance and significant investment in artificial intelligence.

But has the Chancellor done enough to give the UK’s fintech sector the breathing space it needs?

A boost for founders and start-ups?

One of the headline announcements was the introduction of a new Founders’ Relief, offering a 10% Capital Gains Tax rate on lifetime gains of up to £10 million for founders of qualifying high-growth, innovative businesses from April 2027.

The move could help strengthen the UK’s funding escalator, rewarding fast-growing companies, encouraging entrepreneurs to start, scale and retain their businesses in the UK.

Richard Baker, CEO and Founder of Tokenovate, welcomed the announcement and said it gives founders greater incentives to scale and remain in the UK and sends an important signal.

“As global financial markets undergo a major transformation driven by automation, tokenisation and digital settlement, homegrown fintechs have an opportunity to lead. We hope to see this announcement accompanied by better access to growth capital and greater regulatory certainty, ensuring the UK can become a global exporter of financial technology while giving the businesses developing it every reason to stay.”

Janine Hart from Innovate Finance highlighted that the Founders’ Relief was welcome in principle, but the eligibility must be extended so most FinTechs would be included. 

Hart also highlighted the EMI scheme and how many UK FinTechs rely on employee share options to attract and retain staff. The new EMI2 proposals will let employees receive share options worth up to £120,000, alongside existing EMI options.

The Budget also increased the British Business Bank’s financial capacity by £5 billion, including £1.4 billion for investment in equity funds backing high-growth businesses and £450 million for a new venture debt offering. This could provide a welcome boost for fintechs looking to access funding and scale their operations.

Alongside this, changes to venture capital schemes and R&D tax relief could also help fintechs attract investment and innovate.

However, the Chancellor also announced a reduction in the Business Asset Disposal Relief lifetime threshold from £1 million to £500,000 from April 2027, although the government says three in four claimants will be unaffected.

Helping fintechs attract and retain talent

The Budget also included measures aimed at helping growing businesses attract and retain talent. Plans to reform non-compete clauses could make it easier for employees to move between businesses or launch ventures of their own, encouraging greater competition and innovation.

Meanwhile, changes to tax-advantaged employee share schemes, including doubling the individual option limit to £120,000, could help fintech start-ups and scale-ups compete with larger financial institutions for talent.

Support for female founders

There was also support for female entrepreneurs, with a new scale-up programme and the British Business Bank doubling its commitments to women-led businesses and funds to £200 million.

Jayne Sibley, CEO and Co-Founder of Sibstar, welcomed the announcement, but stressed the importance of ensuring funding reaches those who need it.

“Businesses founded entirely by women received just 2% of UK equity investment last year. When I founded Sibstar, securing investment through Dragons’ Den was a turning point that helped us grow and reach thousands more families. This is a welcome step towards closing the funding gap, and the priority now must be ensuring investment reaches the female founders who need it most.”

Encouraging retail investment and modernising UK markets

For the wider financial services sector, the Chancellor confirmed that the cash ISA allowance would remain at £20,000, alongside plans to explore new incentives for first-time stocks and shares ISA investors. 

This was welcomed by Louise Hill from GoHenry, highlighting that common sense prevailed and that the proposed ‘Starter ISA’ incentives should include Junior ISAs, too.

However, questions remain about how the UK can encourage greater retail investment in domestic businesses and strengthen its capital markets.

Beyond the Budget itself, the UK’s ongoing dematerialisation (DEMAT) agenda also aims to modernise the shareholding framework by removing paper share certificates and making it easier for investors to hold shares and exercise their rights.

Together, efforts to encourage retail participation and modernise UK markets could help unlock more domestic investment, supporting British businesses looking to scale and eventually list in the UK.

AI in the spotlight

Artificial intelligence was another major focus of the Budget, with the government setting out an ambitious investment package aimed at strengthening AI security, supporting homegrown technology companies and accelerating adoption across the UK.

The measures include an additional £120 million for the AI Security Institute, funding to strengthen national cyber defences and support for UK AI businesses looking to scale.

For fintechs, the challenge will be turning this investment into practical innovation, while ensuring that AI adoption is underpinned by robust safeguards, oversight and trust.

Looking ahead…

For UK fintech, the Budget offers some welcome encouragement, particularly for founders looking to start and scale their businesses at home. However, questions remain around the wider support needed for the sector, including accelerating RegTech innovation and establishing the UK as a leader in stablecoins.

The Chancellor may have offered some breathing space, but the real test will be whether these announcements translate into meaningful investment, sustained growth and a stronger position for UK fintech on the global stage.