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Lending Works ISA now live
We reported in October that Lending Works had become the first major peer-to-peer platform to receive full authorisation from the FCA. Following this, Lending Works have today announced they have launched their new Innovative Finance ISA. The platform expects a significant uptake after a survey showing that 88% of customers plan to open an IF ISA.
Here is the email sent to lenders:
We're delighted to confirm that we have today launched the new Lending Works ISA!
We've undergone immense scrutiny and assessment from the FCA to get to this point - not to mention left no stone unturned in creating a world-class user experience in the process - so to now be able to deliver this new product is something we're thrilled about. For you, it means many years of tax-free, lucrative returns from lending through our platform lie ahead*.
However, please note that in order to ensure we are able to match your money with borrowers quickly at all times, we will only be accepting ISA capital in fixed tranches, with a collective cap of £1 million at a time. Once this cap is reached, we will temporarily no longer take in any further ISA monies until further notice.
We expect this initial cap to be reached sometime this week, so we strongly suggest that, to avoid any disappointment, you should aim to set up your new ISA, transfer in funds, and make lending offers as soon as possible.
To set up your ISA, please:
- Sign in to your account and click 'Open your ISA'
- Complete the ISA application form
- Accept the declaration and click 'Open my ISA'
Once this has been validated, you will be able to transfer money into your ISA and make lending offers by following the usual procedure.
Should you require any further information relating to the rules/laws pertaining to ISAs, or on how to set up your Lending Works ISA, please do feel free to take a look at the ISA section of our Help Centre and/or our recently-prepared Ultimate Guide to IFISAs. Alternatively, our customer service team is at the ready to assist you via email or by phone.
We look forward to sharing this exciting new chapter of our journey with you!
Here is a copy of the press release:
Lending Works, the first peer-to-peer lending platform to have insurance protecting lenders against certain borrower default risks, today becomes the first major UK platform to launch an Individual Savings Account (ISA).
The new peer-to-peer lending ISA - which is better known as the Innovative Finance ISA or IFISA - is a new category of ISA set up exclusively for P2P lending. 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-body Peer-to-Peer Finance Association (P2PFA) to launch the new ISA product.
Nick Harding, founding CEO of Lending Works, commented:
“We are delighted to announce the launch of the Lending Works ISA, 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.”
Significant investor demand expected
Consumers will be able to subscribe up to £15,240 each year with Lending Works, although they have the option of splitting this across all three ISA types – cash, stocks & shares and IFISA. This allowance is set to 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 is anticipating a significant influx of new investors on the back of the launch, with a recent survey of existing investors confirming that 88 per cent plan to open an IFISA, with roughly a third (31 per cent) 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.”