Just like many other peer-to-peer lenders, ThinCats sees profound opportunity in the forthcoming Innovative Finance ISA (IFISA). And just like many P2P lenders, they are still waiting on full FCA regulation to offer the new savings vehicle.
ThinCats expects to receive FCA approval soon and, in preparation, the platform has revealed their approach to the IFISA.
According to ThinCats, they will be applying a “tax free ISA wrapper” to its existing offerings. ThinCats points out that, during the past five years, their offerings have delivered an average, net return of 9% per year. Investors will be able to transfer cash in their existing ISAs into the ThinCats ISA and retain their tax relief.
ThinCats states that other platforms will “move towards homogenised savings products”. They will continue to offer their “popular auction approach” where investors may select their own ISA investments from businesses raising capital on their site. The auction process allows the investor to bid on an interest rate they would like to earn. Internal polling indicates that 98% of existing users will take advantage of the ThinCats IFISA. Approximately 2/3s (68%) will be taking the full ISA allowance.
“2016 is going to be a landmark year for the peer to peer industry. The huge influx of ISA money will more than double the size of the market within a few months and make this unique asset class a must-have component of any well balanced investment portfolio,” said Kevin Caley, Founder and Chairman of ThinCats. “Growth at such a rate is a serious but welcome challenge for the peer to peer sector and will require careful management to maintain loan quality and platform stability. The ThinCats ISA will be available to all UK taxpayers, but existing ThinCats members will be given priority if demand is very high.”