The Innovative Finance ISA (IFISA) market officially passed the £1bn milestone during the 2019/2020 tax year, government data shows.
HMRC ISA statistics for the 2019/2020 tax year have revealed that £438m was invested in IFISAs, up 33.5 per cent annually from £328m a year before.
This takes the cumulative amount put into IFISAs to £1.07bn.
HMRC has marked the data as provisional so the actual figure could be more.
The Investing and Saving Alliance has previously said the IFISA market hit £1bn in February 2020 but this is the first time it has been confirmed by HMRC.
The data shows the number of new accounts opened has fallen slightly from 38,000 in 2018/2019 to 34,000 in 2019/2020.
The total number of IFISA accounts is now 126,000, according to the HMRC data.
The average amount held in an IFISA has also increased from £8,632 in 2018/2019 to £12,882 in 2019/2020.
Read more: What’s next for the IFISA?
It is an improvement on the first year of the IFISA in 2016/2017 when £36m was invested across 5,000 accounts.
This figure rose to £277m the 2017/2018 tax year across 49,000 accounts.
The amount puts into cash and stocks and shares ISAs also rose during the 2019/2020 tax year to £48.7bn and £24.2bn respectively.
This took the total amount held across all types of ISAs to a record £620bn.
Some of the main IFISA providers such as Funding Circle, Zopa and RateSetter were missing from the most recent tax year, which could limit the size of the market for the 2020/2021 period.