Lending Works, the first peer-to-peer (P2P) lending platform to have insurance protecting lenders against certain borrower default risks, today launched its Individual Savings Account (ISA).
Lending Works received its authorisation from the Financial Conduct Authority (FCA), and HMRC in late 2016 and has now become the first member of the P2P Finance Association (P2PFA) to launch the new product.
Nick Harding, CEO of Lending Works, said: “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 P2P 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.”
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.
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.
Harding added: “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.”