IFISAs make up 30% of Downing Crowd’s investments

Approaching ISA Season, firms are looking to scale up their IFISA propositions as investors turn to inflation beating strategies.

Approaching ISA Season, firms are looking to scale up their IFISA propositions as investors turn to inflation beating strategies. 

Crowdfunding platform Downing Crowd has seen a rapid rise in business from Innovative Finance ISA (IFISA) investors, just one year after the Treasury passed legislation to extend the IFISA remit to include crowd bonds in addition to P2P loans.

The IFISA was launched in April 2016 but was initially limited to holding P2P loans. Further legislation to extend this remit to Crowd Bonds was then introduced in November 2016, with Downing Crowd launching its own IFISA just over three months later in March 2017.

Since then, 30 per cent of Downing's investors have opened an IFISA already. There are also signs that those who have opened an IFISA on Downing Crowd are also contributing significantly to overall investment levels on the platform, with 30 per cent of Crowd Bond orders placed since March 2017 coming from IFISA investors.

Downing Partner and Head of Crowdfunding Julia Groves said: “We expect the popularity of our IFISA will continue not just with our existing members but with a potentially wider pool of investors too - particularly in light of the recent interest rate rise which many banks have refused to pass onto savers, despite the fact that overall rates are still dismally low."

Figures from trade body UK Finance show £1.5bn was pulled from cash ISAs in October this year following an uptick in inflation.

The Downing Crowd platform was launched in March 2016. As at October 2017, the platform had raised almost £40 million on behalf of small UK businesses, having successfully launched 19 Bonds and repaid more than £16m capital, according to the firm.