The Peer 2 Peer Finance Association (P2PFA), an industry advocate group for UK P2P platforms, has jumped into the scrum regarding the forthcoming inclusion of P2P lending assets in Individual Savings Accounts (ISAs). Chancellor of the Exchequer George Osborne announced earlier this year that ISAs would be open to include P2P lending in the near future and last week a new consultation paper was published to field comments and feedback as to how to best accomplish this goal.
“We are delighted the Government has published its proposals to include peer to peer (P2P) lending in ISAs. Consumers who lend on p2p platforms will be able to earn tax free returns in future and the increased flow of funds will allow us to offer great value loans to more credit worthy borrowers. This is a vote of confidence from Government in our industry which is bringing much needed competition to the banking sector.”
The P2PFA estimates the industry has lent approximately £1.89 billion to consumers and businesses to date with expectations that £1 billion will be lent for all of 2014. Allowing savers to invest in P2P loans will fuel the young industry’s growth and some expect a fast jump to a £45 billion industry in just a few years.
The consultation paper explores the details of the integration and is part of a wider governmental objective to increase competition in the traditional UK banking industry.