90 PER CENT of Crowdstacker’s Innovative Finance ISA (IFISA) investors had not invested with the platform before, affirming predictions that the tax-free product would open up the industry to a wider range of retail investors.
And a fifth of its IFISA investors are using their full ISA allowance of £15,240, while the average amount invested in the tax-free product is £7,700, according to new research from the peer-to-peer lender.
Crowdstacker, which was one of the first P2P platforms to be able to offer the IFISA, also said that just six months after rolling out the tax-free product, investors are showing a willingness to choose P2P investing over other ISA formats such as stocks and shares ISAs and cash ISAs.
Seven per cent of its IFISA investors have actually moved money away from their other ISA investments in order to increase their IFISA allocation.
“2015-16 government data shows that £80bn was invested via other types of ISA, typically in cash accounts or stocks and shares. But the popularity of the IFISA suggests that within a few years a sizeable portion of this could be providing a direct boost to the UK economy by being invested straight into growing UK SMEs,” said Karteek Patel, chief executive of Crowdstacker. “All the money we raise for businesses comes from everyday investors and roughly half was invested by people using our IFISA, helping us hit £1m within just a couple of weeks of launch.”
Crowdstacker was one of the few P2P lenders to receive full IFISA approval in April 2016, and it has seen steady IFISA investment levels each month since its launch. The company’s data also found that the IFISA appeals to all age groups, from young investors in their 20 to retirees.
“As other platforms are able to offer the IFISA and awareness about it grows further, we expect to see the success of this investment wrapper grow even more,” adds Patel. “It could be a great investment for consumers who have a variety of choice about how their money is invested depending on the investment structure used by each platform.”