|« eMoneyUnion launch secured personal loans||Zopa announce lending changes »|
RateSetter comment on ISAs
RateSetter, one of the leading peer-to-peer companies have provided an update on ISAs. RateSetter is involved in discussions with industry peers and the Treasury on how best to allow savers to include P2P in their ISAs, ahead of a government consultation in July.
It has already been agreed that the P2P platforms will be able to offer their own product direct and act as ISA managers. However, the particulars of how this would work in practice have yet to be confirmed.
The options currently on the table include:
- A straight swap - platforms simply offering a straight Stocks and Shares ISA option investing in P2P lending only. However this would severely limit savers’ choices as they can only open one Stocks and Shares ISA a year, and so would have to put 100% in P2P or 0%.
- A diversified portfolio - a ‘Third ISA’ category based purely on P2P. This would allow savers to diversify across Cash, P2P and Stocks and Shares. P2P would represent a middle ground, with lower associated risk than Stocks and Shares, and higher returns than Cash.
- A blended product - platforms ultimately developing Stocks and Shares ISAs that allow both P2P and other investments.
Rhydian Lewis, CEO and Founder of RateSetter, said:
“Allowing P2P companies to become ISA managers is a key milestone in the development of the sector that will change the savings industry in the UK for the better.”
“The practicalities of how this innovation will work have still to be ironed out. The creation of a ‘Third ISA’ category would open up a whole new alternative to polarised cash or investment options for savers – providing that missing link between low yields and high risk.”
“But we believe that providing ISA savers with our own blended product is also a valid way to breathe new life into the ISA industry. As we are a technologically advanced sector, the hurdles this presents will not be insurmountable. However, the sooner the finer points are resolved, the sooner investors will be able to benefit.”
“The absolutely critical point is to not restrict savers’ options.”