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Peer2Peer Finance News | July 29, 2017

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IFISAs: Full steam ahead!

IFISAs: Full steam ahead!
Suzie Neuwirth

PLATFORMS offering the Innovative Finance ISA (IFISA) have seen a spike in inflows in recent months, as retail investors clamour to make the most of tax-free earnings before the end of the financial year.

Crowd2Fund has seen 50 per cent month-on-month growth in IFISA volumes since January, with 95 per cent of its investment now going through the tax-free product.

“We expect the IFISA investment to continue to increase with the new IFISA season and we’d like to see the growth rate stabilise at 30 per cent month on month,” the firm said.

LandlordInvest said that average funds deposited into its IFISA soared by a mammoth 88.7 per cent to £4,536 between 10 and 22 February 2017.

And buy-to-let lender Landbay, which launched its property-backed IFISA in February, said that it now forms a third of newly-opened Landbay accounts.

“We expect this to grow throughout the rest of the ISA season, as investors continue to take advantage both of this tax year’s ISA allowance and next year’s, rising to £20,000,” said Landbay chief executive John Goodall.

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

Meanwhile, Crowdstacker revealed that its average IFISA investment rose by 50 per cent between December 2016 and February 2017, with the number of people taking out IFISAs almost doubling over the period.

And Lending Works said it has exceeded its target in terms of IFISA uptake, with the majority of new money now coming via the ISA product.

With 6 April looming, nearly a dozen new IFISAs came on the market last month, from firms including Property Crowd and HNW Lending.

Yet the majority of the sector’s largest players are not going to be authorised quickly enough to launch the IFISA during the 2016/17 tax year.

Read more: The great IFISA conundrum

“The process never takes this long, it’s crazy,” said Gillian Roche-Saunders, partner at law firm Bates Wells Braithwaite.

“However, there’s significant pressure on the Financial Conduct Authority to get these permissions through.

“I’d be really surprised if by the end of summer the largest players are not authorised or told to change their business models.”

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

This article was first featured in the April print edition of Peer-to-Peer Finance News. For more information on receiving the monthly print magazine, complete with exclusive content, email info@p2pfinancenews.co.uk.