Image Image Image Image Image Image Image Image Image Image

Peer2Peer Finance News | May 30, 2017

Scroll to top

Top

Rebuilding Society readies for IFISA launch

Rebuilding Society readies for IFISA launch
Suzie Neuwirth

REBUILDING Society is hoping to launch its Innovative Finance ISA (IFISA) on Wednesday, to capitalise on the rush of investors eager to take advantage of tax-free earnings before the end of the financial year.

The peer-to-peer business lender gained HMRC approval on 7 March and has been taking pre-registrations for its IFISA for the past month.

“We surveyed our customers and there was a lot of interest in the IFISA,” a spokesperson from Rebuilding Society told Peer-to-Peer Finance News.

“We expect it to be a key area of growth for us, as it has been for other platforms who have launched the product.”

The spokesperson added that the platform is doing some internal tests before launching the IFISA, but expects it to go live on Wednesday.

Read more: Revealed: The top rates for P2P lenders and borrowers

Investors can expect returns of around seven per cent, although the spokesperson said that various costs associated with the ISA would be passed down to customers. These costs are taken off the interest earnings, rather than the capital.

“There are very few investment options with the ISA wrapper that offer these types of returns,” the spokesperson said.

“It is attractive to people who rely on their savings, such as pensioners or people who have been made redundant.”

A surge of interest in IFISAs has created an imbalance between investor and borrower demand on some platforms. Lending Works had to stop accepting new money transfers just 24 hours after the launch of its tax-free product, as it did not want to leave the capital waiting to be matched.

Read more: MoneyThing faces shortage of borrowers

Read more: Revealed: The P2P lenders with IFISAs ready for this tax year

However, the Rebuilding Society spokesperson said he did not think this would be a long-term problem.

“Too much supply of capital could make certain investment opportunities under-priced,” he said. “But lower-interest loans will attract more borrowers, so it should balance out.

“However, this takes time, so some lenders could be affected in the interim.”

The authorisation process has been arduous to say the least. Rebuilding Society applied for full approval in November 2014, like a number of its larger rivals who are still awaiting approval.

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