Jump to content
House Price Crash Forum
tyres

peer-to-peer Isa offering up to 4.7% return

Recommended Posts

First major peer-to-peer Isa becomes available, offering up to 4.7pc tax-free

Quote

 

Lending Works has become the first large peer-to-peer company to offer an "innovative finance Isa", beating several better-known rival lenders to the launch. 

Lending Works, which offers unsecured loans to consumers became the first major peer-to-peer lender to be fully authorised by the Financial Conduct Authority in October.

With the regulatory sign-off it was then able to begin developing the Isa "wrapper". This works like other Isas in that the returns earned by investors - the "lenders", in this case - are free of tax.

The new Isas will offer the same rates and terms as Lending Works' existing accounts. Investors can lend over a three or five-year period. Three-year loans attract interest of 4pc and five-year loans earn 4.7pc. 

 

 

Share this post


Link to post
Share on other sites

You can all play banker. :)

https://www.lendingworks.co.uk/peer-to-peer-lending/statistics/borrowers

You make your choices.  I have no problem with it.   Lending is a promise to repay.  Lenders weight it up, and if extends the loand, the borrower gets to use the money for something they want.

Share this post


Link to post
Share on other sites
10 minutes ago, Peter Hun said:

Unsecured lending? Pah.

These are secured 

5.43%

https://www.crowdstacker.com/amicus

7%

https://www.crowdstacker.com/investment

Hmmmm.  Sceptical.  Reading the FAQ on whether this is covered by the FSCS.  Sounds like when your money is covered only when it's not being used for a loan.  In other words, while it's being used for a loan i.e. All the time, it's not covered.  

Errr... no thanks.  

While your money is on deposit and before a relevant loan offer period commences, it will be held in a separate bank account which is managed by the Custodian, Reyker Securities plc. This account is covered by the Financial Services Compensation Scheme up to £50,000 per investor.
When your money is lent to Amicus Finance plc, it will be secured over the assets and business of Amicus currently totalling over £50m (as of October 2016) including loans to customers, secured on UK property.

Share this post


Link to post
Share on other sites

None of the schems in this thread are protected by the FSCS. Amicus have lent over £1billion in 7 years are in the process of getting a bank license

 

http://www.paymenteye.com/2016/10/18/amicus-applies-for-uk-banking-licence/

 

But of course, everything has a risk. My point is that an unsecured lender is giving less interest than secured lender, in a ISA, and they are not the first company as the DT claims.

Edited by Peter Hun

Share this post


Link to post
Share on other sites
44 minutes ago, Peter Hun said:

None of the schems in this thread are protected by the FSCS. Amicus have lent over £1billion in 7 years are in the process of getting a bank license

 

http://www.paymenteye.com/2016/10/18/amicus-applies-for-uk-banking-licence/

 

But of course, everything has a risk. My point is that an unsecured lender is giving less interest than secured lender, in a ISA, and they are not the first company as the DT claims.

Agreed.

The peer-to-peer is unregulated and opaque.

Id be wanting more than ~5%.

 

Share this post


Link to post
Share on other sites

Yes, the lenders on crowdstacker are bridge lenders, which is only just p2p. However, bridge lending can charge 12%+ on mortgages where p2p in unsecured consumer lending has to compete with banks changing <5%

Share this post


Link to post
Share on other sites
52 minutes ago, Peter Hun said:

None of the schems in this thread are protected by the FSCS. Amicus have lent over £1billion in 7 years are in the process of getting a bank license

 

http://www.paymenteye.com/2016/10/18/amicus-applies-for-uk-banking-licence/

 

But of course, everything has a risk. My point is that an unsecured lender is giving less interest than secured lender, in a ISA, and they are not the first company as the DT claims.

Ahh, OK, my mistake.  I thought 'secured' meant covered by FSCS.  

Share this post


Link to post
Share on other sites

If you're with a p2p you'll be getting constantly updated reports about your gains and losses, and there will be losses. I hadn't seen mention of the ISAs prior to reading this thread but I started with p2p through Funding Circle about 4 years ago. After losses it's performed at around 6.6% over that time.

I have a couple of issues with p2p. To do it safely you'll want to spread your money across many loans and it takes time to analyse all the applicants and choose which, so people click the "auto" button which results in the p2p system allocating your cash. And then, when you look at the losses, you're always going to see ones you wouldn't have chosen yourself. The other issue is that these are long term loans in many cases, meaning that you can easily close out.  Which I suppose is what makes a p2p-linked ISA look attractive to some, but not me.

Share this post


Link to post
Share on other sites
4 hours ago, Peter Hun said:

None of the schems in this thread are protected by the FSCS. Amicus have lent over £1billion in 7 years are in the process of getting a bank license

 

http://www.paymenteye.com/2016/10/18/amicus-applies-for-uk-banking-licence/

 

But of course, everything has a risk. My point is that an unsecured lender is giving less interest than secured lender, in a ISA, and they are not the first company as the DT claims.

If Amicus gets a bank licence does that mean any investment in an Amicus loan is covered by the FSCS? Is it likely that other P2P platforms will be able to get FSCS coverage for their loans? I imagine if/when that happens, a lot of people would pile into P2P. 

Share this post


Link to post
Share on other sites
4 hours ago, fru-gal said:

If Amicus gets a bank licence does that mean any investment in an Amicus loan is covered by the FSCS? Is it likely that other P2P platforms will be able to get FSCS coverage for their loans? I imagine if/when that happens, a lot of people would pile into P2P. 

I doubt it very much. Before you choose which businesses your p2p money goes to you get to see details of the guarantees put forward by the applicants. 

I'd be surprised if there is anybody who's been in p2p for a year who hasn't suffered a default.

Share this post


Link to post
Share on other sites

I doubt it too. Banks can offer bonds at higher rates of interest, they, like shares are not protected. Shares/funds in my pension fund are not protected either.

P2P  seems to me to be a confusing name and concept.

Peer to Peer. Well I'm an investor and  a pay day borrower or commercial property developer are not my peers. Each is drastically different in risk and reward,

Share this post


Link to post
Share on other sites

You can also already buy some investment trusts which do P2P in a stocks and shares ISA, for example P2P Global Investments (P2P) and Funding Circle SME Income Fund (FCIF). These have the advantage of being liquid and more diversified. I haven't investigated how much property lending is bundled up into these, though.

Share this post


Link to post
Share on other sites

"innovative finance Isa"

Got to laugh at how many suckers there are in this world. Never tire of these narratives.

Liquid? - tick

Sliced/diced? - tick

Innovative? - tick

Tax efficient? - tick

Regulated? - tick

 

 

Share this post


Link to post
Share on other sites
On 10/02/2017 at 9:22 AM, xiox said:

You can also already buy some investment trusts which do P2P in a stocks and shares ISA, for example P2P Global Investments (P2P) and Funding Circle SME Income Fund (FCIF). These have the advantage of being liquid and more diversified. I haven't investigated how much property lending is bundled up into these, though.

I know Funding Circle lends to property developers and has recently changed how they assess the risk of those loans.

I guess some HPCers might want to avoid such investments but p2p is a real pain unless you click the auto invest button, because otherwise it takes so much time. The downside is that you might invest in something you're morally against. But then who keeps an eye on exactly where their pension goes, or their union subs! It seems even unions are doing BTL these days.

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   33 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.