Folk2Folk, a peer-to-peer lender serving smaller businesses, has written to the Chancellor of the Exchequer, Rachel Reeves, asking her to include IFISAs in the ISA discussion.
IFISAs, or innovative finance individual savings accounts, aim to allow alternative investments in retirement accounts. An IFISA can also be utilized to invest in peer-to-peer loans.
ISA reforms are said to be an area the Chancellor is reviewing in advance of next week’s Spring Statement.
The letter shared by Folk2Folk, signed by Chairman Tim Sawyer CBE, explains that they support the government’s policy to encourage more investment but asks that they do not overlook IFISAs.
The letter states:
“Although IFISAs may not be suitable for every investor, their steady adoption demonstrates strong demand for tax-free, fixed-income opportunities. With a range of providers offering IFISAs at different entry levels, these investments serve a broad spectrum of investors. Investment in IFISAs rose 46% year-on-year from £563m in 2022 to £821m in 2023, according to the latest HMRC data, reflecting growing investor appetite for alternative, tax-free investment options that offer fixed income rather than market-dependent returns.”
Sawyer urges policymakers to recognize IFISAs as a “vital part of the ISA landscape and ensure they are included alongside Cash ISAs and Stocks & Shares ISAs.”