Flagstone savings platform doubles assets it administers

Flagstone has more than doubled the assets it administers to £13.5 billion as savers seek competitive interest rates.
The British savings platform allows users to manage their cash across hundreds of accounts from more than 60 UK banks via a single platform. Its number of active customers has risen by 21 per cent to 725,000 since March.
Simon Merchant, the chief executive who co-founded Flagstone in 2015, credited its growth to rising uncertainty over interest rates. This month the Bank of England cut its base rate by 25 basis points to 5 per cent in a move that triggered some banks and building societies to withdraw their highest-paying accounts from the market.
“Uncertainty around the Bank base rate and turbulence in the wider financial markets are prompting more savers to think about what they want to do with their savings and to take action to make their money work harder while mitigating risk,” Merchant said.
Flagstone’s assets under administration now exceed £13 billion, having increased by more than £1 billion a quarter in the past 18 months. About half of its available accounts pay a rate of 4.5 per cent or more.
At the end of June 2024, Flagstone also recorded its sixth consecutive quarter of profitability. The platform said it was reinvesting profits in high-performance operations and expansion through more bank and brand partnerships.
The number of Flagstone partners, which includes the likes of St James’s Place and HSBC, has risen by 10 per cent to 66 in four months. The platform raised £108 million in private equity from Estancia Capital Partners in March, one of the biggest fundraising rounds in the British financial technology sector this year. Monzo, the digital bank, raised £340 million, also in March. To date, Flagstone has raised about £150 million from investors to fund its ambition to increase its operations in Britain and overseas.
Merchant, 56, said the most significant challenge in the UK savings market is “inertia”. Within the UK alone, the savings market is estimated to be worth £1.7 trillion, but two thirds of this cash is held in accounts earning 2 per cent or less in interest each year, according to an analysis of Bank of England credit data in January. Last summer the Financial Conduct Authority found that a quarter of these savings were held in accounts that paid no interest.