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Peer2Peer Finance News | August 25, 2019

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Money&Co plans to launch IFISA by early March after gaining FCA approval

Money&Co plans to launch IFISA by early March after gaining FCA approval
Suzie Neuwirth

MONEY&CO has received full authorisation from the Financial Conduct Authority (FCA) and is aiming to launch its Innovative Finance ISA (IFISA) by early March.

The peer-to-peer lender, founded by City superwoman Nicola Horlick, gained the regulatory green light two weeks ago, after a lengthy application process.

P2P platforms need approval from both the FCA and HMRC to offer the IFISA, although the latter is broadly accepted to be more of a formality. Money&Co applied to HMRC for ISA manager status a week ago, so approval is likely to be imminent.

Read more: Nicola Horlick’s Brave New World

In the meantime, Horlick’s firm Bramdean Asset Management already has ISA manager approval, so it would be possible to issue a Bramdean ISA with Money&Co loans. However, Horlick is planning to wait for Money&Co to receive its own ISA manager status.

“Our systems are already configured to deal with ISAs, so that’s not a problem,” Horlick told Peer-to-Peer Finance News.

“I expect we’ll launch the IFISA two weeks after we receive HMRC authorisation, so we will hopefully capture some of the ISA season effect.”

There tends to be an influx of money poured into ISAs as the end of the tax year in April approaches, as consumers look to take advantage of tax-free earnings from their savings and investments. The current annual ISA allowance is £15,240, although this is set to go up to £20,000 in the next tax year.

Read more: Lending Works IFISA hits £1m investor limit in just 24 hours

Read more: Nicola Horlick: P2P is less risky than stock market 

Money&Co is planning to offer a property-backed loan as its first investment within the ISA, which will have a net yield of seven per cent and a five-year maturity.

“Property loans are less risky and I think that seven per cent tax-free yield is very attractive, particularly as interest rates are so low and inflation is predicted to rise,” said Horlick.

“I get people asking me about the ISA all the time and I think all of our current lenders are interested in it. It will have a dramatic effect on the business.”

Around 23 firms are authorised as IFISA managers by HMRC, but only five have actually launched the product so far. Most of the UK’s largest P2P lenders are still waiting for FCA approval, having applied to the City regulator more than a year ago.  

Read more: IFISAs to make up 50 per cent of P2P lending by 2018