MILLENNIALS are four times more likely to have money invested in peer-to-peer platforms than people aged 55 and over, research by ThinCats has revealed.
A poll of more than 2,000 adults by the P2P business lender found that four per cent of 18 to 34 year olds currently have money in the sector, compared with just one per cent of over 55s.
The research suggested the difference could be due to appetite for risk, with 19 per cent of the younger cohort willing to accept greater risk for higher returns, compared with nine per cent of over 55s.
Half of over 55s were more interested in stable returns and low volatility, compared to just a quarter of millennials.
29 per cent of millennials cited the ability to cut out banks as the sector’s biggest attraction, while 28 per cent liked the fact that they can lend directly to businesses.
“The peer to peer sector has been growing in popularity since it first arrived in the UK a decade ago, but many people still consider it to be something of a novel investment,” said Kevin Caley, founder and chairman of ThinCats.
“That perceived novelty is perhaps why it has proved so popular with younger investors, but that could soon be about to change.
“With the arrival of the Innovative Finance ISA (IFISA), we expect to see many more seasoned investors branch out from their traditional ISA holdings, including those nearing retirement, for whom the fixed income nature of these investments is well suited to their income needs.”
The tax-free wrapper around P2P investments is expected to attract a wider range of retail investors to the sector. ThinCats’ research found that a third of people who already have a cash or stocks and shares ISA would like to invest in an IFISA.