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P2P Lending To Probably Be Included In Nisa's From 2015 - Gamechanger?

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The P2P lending industry is celebrating the fact that the Government is planning to allow P2P lending to be allowed in tax free NISA's from April 2015. The P2P lending industry in the UK is expected to grow from about £2 billion to around £45 billion in the next few years. Surely this will be a massive gamechanger as P2P lending tends to have much higher interest rates (and more risk but perhaps not that much more risky than investing in the stock market as people saw in 2008).

http://www.ratesetter.com/blog/article/consultation_on_peer_to_peer_lending_isa

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My advise to any one interested is get your money in now. Interest earned on P2P will fall like a stone if this happens

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when will 'a bank' buy one of the P2P lenders?

Not long I'd have thought. Or they'll start offering an equivalent product, they could enter the market very easily and take out a lot of the competition, although lower margin than borrowing at 0% and loaning out at 8+%.

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I wonder if the government know what they are doing. P2P doesn't increase the money supply like a loan from the bank. Have they thought this through?

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I wonder if the government know what they are doing. P2P doesn't increase the money supply like a loan from the bank. Have they thought this through?

Exactly. The government will not allow P2P to make up more than a just fraction of the market. Otherwise it's more deflation ahoy and no new money is created during lending.

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Exactly. The government will not allow P2P to make up more than a just fraction of the market. Otherwise it's more deflation ahoy and no new money is created during lending.

Maybe they see this as the new paradigm and a way to deflate the banks?

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I wonder if the government know what they are doing. P2P doesn't increase the money supply like a loan from the bank. Have they thought this through?

It has the same effect, money instead of being kept unused in a savings account are spent by a P2P borrower.

The current UK "recovery" is funded by reducing saving ratio by a half after interest rates offered by banks dropped. What matters is the money actively chasing good/services not the total stock of bank credit.

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