Lending Works Launches Innovative Finance ISA

Lending Works has launched its Innovative Finance ISA (IFISA). The peer to peer lender says it is the “first: major UK platform to offer the IFISA.

The IFISA is a new category of ISA set up exclusively for peer to peer lending investment. The IFISA can only be offered by platforms who have attained both full authorisation from the Financial Conduct Authority (FCA), and subsequently ISA Manager approval from HMRC. Lending Works received confirmation of both permissions in late 2016, and the company has now become the first member of the industry representative agency the Peer-to-Peer Finance Association (P2PFA) to launch the new ISA product.

Nick Harding, founding CEO of Lending Works, said they were delighted with the launch.

“..giving investors the opportunity to earn higher rates of interest by using their ISA allowance to invest in peer-to-peer loans. This launch comes in response to unprecedented demand by investors, who are looking to new asset classes for income growth, at a time when other investments and bank savings accounts are often delivering mediocre returns, if at all. Our lenders tell us that they are crying out for yield generating products, such as our ISA. As the first major UK peer-to-peer platform to launch an IFISA, we are focused on developing a world-class customer experience and look forward to seeing our investors reap the benefits.”

Lending Works predicts significant investor demand. Consumers will be able to subscribe up to £15,240 each year across all three ISA types – cash, stocks & shares and IFISA. This allowance will increase to £20,000 in 2017/18. In addition, there will be no cap imposed on the transfer of funds accumulated over previous tax years within existing ISAs into an IFISA, meaning the benefits are likely to be substantial.

Lending Works says a recent survey of existing investors said that 88% plan to open an IFISA, with roughly a third (31%) expecting to invest between £10,000 and £15,240 of their annual ISA allowance to this wrapper before the tax year is complete.

“Given the extraordinary level of interest from both existing and prospective customers in the build-up to the launch of our ISA, we expect to see a large spike in the volume of funds coming to our platform over the next couple of months as savvy investors look to make the most of this year’s ISA season. But what excites us most is the prospect of delivering sustained, long-term benefits to our customers via the Lending Works ISA for many, many years to come,” says Harding.

 

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