INVESTORS could have a choice of more than a dozen Innovative Finance ISA (IFISA) providers by the end of this tax year.
30 firms have now received IFISA manager status, according to HMRC’s latest list, but just seven platforms have currently got products on the market.
However, several other platforms have recently received regulatory permissions and are likely to launch their product before the end of the tax year.
ISA season traditionally starts around March when savers and investors try to make use of their annual ISA allowance, which is £15,240 this tax year, before it expires.
Tax-free returns on offer with IFISAs currently range from 3.5 per cent to 12 per cent depending on the platform and loans funded.
The main players, Zopa, Funding Circle and RateSetter, are still awaiting full authorisation, but other platforms already have products in place.
Lending Works launched its IFISA earlier this month, offering returns of 4 per cent up to three years and 4.5 per cent up to five years.
The demand for these types of products was underlined when Lending Works had to stop accepting new money transfers into its IFISA due to “unbelievable demand” within the first 24 hours.
And Landbay unveiled its IFISA product this week, offering returns of 3.75 per cent.
Until this year, there were only three IFISAs on the market, offered by Abundance, Crowdstacker and Crowd2Fund.
Abundance has an IFISA with returns depending on which projects are invested in, while Crowdstacker offers up to 6.8 per cent on its proposition.
Crowd2Fund is targeting an 8.7 per cent return with its IFISA.
Following a slew of approvals in early 2017, investors can now choose an IFISA from LandlordInvest, which launched its property-backed wrapper in January and offers returns of up to 12 per cent.
Edinburgh-based Lending Crowd, which launched its IFISA earlier this month, offers investors a target rate of return of six per cent.
More platforms may well enter the market before the end of the tax year.
And crowd bond provider Downing and small business lender Peer Funding are in the process of rolling out their IFISA after gaining authorisation, although a target timeframe is unconfirmed.
Read more: Lending Works re-opens to IFISA investors