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Peer2Peer Finance News | August 20, 2019

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Zopa launches IFISA with charge-free July offer

Zopa launches IFISA with charge-free July offer
Anna Brunetti

ZOPA officially unveiled its Innovative Finance ISA on Thursday, which is initially available solely to existing investors to head off a lender-borrower imbalance.

The UK’s oldest peer-to-peer platform is soft-launching its new tax-free-wrapper, which marks the debut foray of a ‘big three’ player into the IFISA market, after receiving “an incredible amount of interest” from investors.

“There has been an incredible amount of interest in our IFISA on launch,” said the platform’s chief product officer Andrew Lawson.

“To help manage demand, we’re currently only offering our IFISA to existing customers.

“However, we may still see more money coming in than we can lend out straight away which could cause your lending speeds to slow down.

“We will monitor this closely, and keep investors informed.”

The consumer specialist platform had already capped investment in the past, as it temporarily stopped accepting new money in December and created a waiting list in March to prevent lending queue times from increasing.

The firm will allow existing clients to sell their loans and move the proceeds into a IFISA account free of the usual loan-sale fee of one per cent in July, and reintroduce the fee for later transfers.

The platform has also streamlined its product range, with its new Core account.

The account will offer lower-risk investment tranches at a 3.9 per cent annual rate of return, while higher-risk tranches will be available through the Plus account, which targets yields of 6.1 per cent.

Neither of the two offerings will be backed by Zopa’s current provision fund, which will be phased out entirely by 2022.