THE END of the tax year is fast approaching, so if you haven’t yet taken full advantage of your £20,000 ISA allowance to make tax-free returns, now is the time. The peer-to-peer lending industry is expecting to see an uptick in inflows into Innovative Finance ISAs (IFISA) this year now that there is a much wider choice of products available and the potential for higher returns than cash with lower volatility than the stock market.
If you’ve got cash to invest but don’t have time to scour the marketplace yourself, here are five IFISA ideas which could be worth a look for last-minute ISA investors.
The UK’s oldest P2P lender, Zopa was the first of the ‘big three’ P2P platforms to launch its IFISA last June, albeit solely to existing investors. The firm reopened to new investors in January, 10 months after launching a waiting list to cope with demand for its popular products. You can choose from its ISA Core (4.5 per cent target return) or ISA Plus (5.2 per cent target return) products, and currently Zopa is offering a cashback deal of up to £100 when you fund your IFISA by 5 April.
P2P platform EasyMoney is part of Sir Stelios Haji-Ioannou’s easy family of brands (perhaps the best known of which is EasyJet). EasyMoney’s IFISAs allow retail investors to lend to UK property at a maximum loan-to-value of 75 per cent. It has three IFISA products: Classic, which can be opened with £100, and targets returns of up to 4.05 per cent a year, Premier, with a minimum investment of £10,000, and a 7.28 target return, and High Net Worth, which targets an eight per cent annual return on balances of at least £100,000.
British Pearl, which is backed by former Conservative Party treasurer Lord Stanley Fink, offers a flexible IFISA that allows investors to fund secured property loans, for returns of up to 4.4 per cent per year. There is the option to exit early via the resale market, depending on demand. As an extra incentive, British Pearl is offering a free iPad when £5,000 is invested, running until 1 April.
New market entrant Loanpad enables investors to share property-backed loans with established property lenders to mitigate risk. It offers two types of account – a classic account, which gives investors daily access to their money and can be managed free of charge, with four per cent returns; and a premium account which offers a higher interest rate with a 60-day notice period for free withdrawals, or a small charge for early access, with five per cent returns. Both accounts can be held within Loanpad’s flexible IFISA, and the accounts can be opened with as little as £10.
CrowdProperty offers investors eight per cent returns by backing property development loans, which can be held within its IFISA. All loans are secured with a first charge against property and there is a minimum investment of £500. Earlier this month, CrowdProperty launched its first auto-invest product, allowing customers to spread their money across a diversified portfolio of secured property loans.
Read more: The IFISAs you can open with £100 or less