The peer-to-peer lender’s big day is finally here.
RateSetter is set to launch its Innovative Finance Individual Savings Account (IFISA) to existing customers on Thursday, with new customers to follow on 1st March.
The platform had previously said that the product would be available before the new tax year, and is to be distributed to investors in the order they opened their accounts. The IFISA is expected to offer investors annual returns of between 3 and 6 per cent, dependent on the level of access.
Founder Rhydian Lewis said in a statement: “RateSetter’s purpose is to give people the opportunity to earn more on their money. Our ISA makes that opportunity even more compelling because investing is now tax-free.
“Cash ISA savers are frustrated with low interest rates, while inflation is always nibbling away at their money. Stocks and shares ISA investors have enjoyed good returns recently but may be nervous of market falls, as demonstrated in the last few days.
“Lending is a third asset class in the middle, offering the potential for higher returns than cash without the volatility of shares.
“With RateSetter’s excellent track record and our focus on the retail investor, we believe our ISA will become an attractive home for people looking to put their money to work.”
The platform is the last of the big three peer-to-peer lenders to launch an IFISA, after Zopa and Funding Circle launched their products in June and November respectively.
Speaking at AltFi’s IFISA seminar last month, RateSetter’sJohn Battersby said while the firm is seeing strong demand from consumers for its product, selling the IFISA to IFAs is proving a harder task.
AltFi’s own IFISA report found that there is still large scale ignorance about the tax wrapper, despite launching two years ago.
In addition, the product is much more likely to be used by the younger generation. Those aged between 18-34 are three times more likely to take out an IFISA than those aged 34 and above.
