A BETTER understanding of peer-to-peer lending risks and regulations could help boost the use of the product within self-invested personal pensions (SIPPs), research claims.
A survey of 1,000 pension investors, by P2P property lender Blend Network, found 25 per cent of respondents were already invested or interested in investing in P2P loans through a SIPP.
But half cited a lack of Financial Services Compensation Scheme (FSCS) protection or their money being at risk as deterrents.
Another 31 per cent were concerned about regulation in the sector.
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Of those that do include P2P loans in their SIPP, 34 per cent said they favoured the fixed returns and 26 per cent liked the ability to secure higher interest rates.
A third said they would hold one to five per cent of their SIPP investments in P2P loans, a quarter said they would hold between six and 10 per cent, while 15 per cent said they would be happy holding more than 10 per cent.
“The findings of our research clearly reflects significant demand among private pension holders for access to P2P lending via SIPPs,” Yann Murciano, chief executive of Blend Network, said.
“It also indicates reservations on the part of investors around regulatory developments and understanding of the product, which if addressed could significantly increase investor commitment to the sector.
“The government, Financial Conduct Authority and organisations such as the Peer-to-Peer Finance Association have the opportunity to address the concerns the SIPP holders we surveyed expressed.
“This will help the growth of the P2P sector, which is helping to broaden the investment choices investors have as well as provide additional funding options for the UK’s growth businesses to help them scale and make an even greater contribution to the UK’s economic growth and performance.”