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Peer2Peer Finance News | August 20, 2019

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P2P lender predicts last-minute ISA sales boom

P2P lender predicts last-minute ISA sales boom
Anna Brunetti

ALMOST 12 per cent of all ISA sales were clinched in the last five days of the 2016 tax year, according to analysis from HNW Lending.

The peer-to-peer lender, which launched its Innovative Finance ISA (IFISA) last week, said the data suggested there could be a similar surge in interest in tax-free wrappers – including the IFISA – between 1 April and 5 April this year.

The asset-backed lender’s product is targeting annual returns of between seven and 15 per cent, with a minimum investment of £5,000. It will keep the IFISA open to new investment until 2pm next Wednesday.

“We are expecting a surge of interest in our IFISA during the first five days of April as people look to make use of their ISA allowance for the current tax year,” said Ben Shaw, founder and director of HNW Lending.

“Our analysis of industry data reveals that for the last tax year, 11.8 per cent of net ISA fund sales occurred between 1 and 5 April 2016.”

Read more: MetLife predicts ISA transfer surge

The tax-free wrapper around P2P investments was launched last April, but the authorisation process has been slow meaning that many platforms are yet to get their products on the market. Retail investors can take advantage of tax-free earnings up to the annual ISA limit of £15,240, which is set to rise to £20,000 in the next financial year.

Despite forecasts of an increase in demand during ISA season, separate research published on Tuesday showed that many Britons are still shunning all versions of the tax-free product.

45 per cent of working-age adults across the country have no ISA savings for retirement, a study from Aegon UK revealed.

However, for those who are saving into an ISA for retirement, the average savings total is £20,000, up from £8,000 in April 2015.

“Across the generations, pensions are almost always the most tax-efficient way of saving for retirement, and employees also receive employer contributions to workplace pensions,” said the firm’s pensions director Steven Cameron.

“But for an increasing number, ISA savings will provide an important supplement to their retirement income.”

Read more: IFISA investors to earn four times more than savers in a downturn