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Investing for your own special day


Wedding couple

Prince Harry and Meghan Markle are set to tie the knot on 19 May, but while the nation prepares to celebrate the latest royal wedding, fewer and fewer people are choosing to follow in their footsteps down the aisle.

Marriage rates for opposite-sex couples are now at their lowest level on record, according to the latest official numbers.

The Office for National Statistics (ONS) reported in February that there were 239,020 marriages between men and women in England and Wales in 2015 – a decrease of 3.4% on the previous year.

Despite the patriotic fervour surrounding the occasion, a royal wedding doesn’t necessarily herald a boost for the British economy either.

Official data for April 2011, the month of the Duke and Duchess of Cambridge’s marriage, shows that output from the UK’s all-important services sector fell 1.2%. Manufacturing output also fell, although retail sales were higher than the previous month.

The ONS stressed that other factors may have affected the economy while the nation watched William and Kate’s wedding.

An extra public holiday to mark the event came just a few days after Easter and close to the May Day Bank Holiday, so many people may have taken longer breaks from work. It was also the warmest April for more than a century.

For richer, for poorer

Royal weddings don’t come cheap – the security alone for the 2011 nuptials of Prince William and Kate Middleton cost more than £6 million, including almost £3 million in police overtime.

Harry and Meghan’s ceremony will be on a smaller scale, but the bill will still dwarf the average UK wedding budget, which stands at more than £27,000 according to wedding planning website Hitched.co.uk.

That’s a lot of money if you aren’t a member of the monarchy, so most people planning their big day will have to budget carefully and build up a wedding fund.

You could opt for a regular savings account or Cash ISA, but with interest rates failing to keep pace with inflation, your money would actually be falling in value over time.

Investing in shares has long been seen as a way of seeking higher returns than cash, but recent volatility sparked by Brexit and trade tensions between the United States and China has highlighted how quickly sentiment can change in the stock markets.

For those seeking an alternative to equities, peer-to-peer (P2P) lending could be the answer. By using an online P2P platform like LendingCrowd, you can lend directly to established businesses in return for regular repayments.

To have and to hold

Following the introduction of the Innovative Finance ISA (IFISA), you can invest up to £20,000 in P2P loans this tax year, with no tax* to pay on your returns.

Before investing, it’s important to understand the risks involved and minimise potential losses through diversification – in other words, don’t put all of your eggs in one basket. The longer an investor holds a LendingCrowd Growth ISA, the more diversified their portfolio will become, as the platform automatically invests in new loans on their behalf. Spreading investments across as many businesses as possible means the impact is reduced if a borrower can’t repay their loan.

LendingCrowd’s Growth ISA is designed for those who want a quick and simple way of creating a diversified portfolio of secured business loans. By automatically reinvesting their interest and capital repayments, the Growth ISA has delivered an average return for investors of 8.5% – well above its target rate of 6%**.

As investing legend Warren Buffett, one of the world’s richest people, once said: “Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.”

Marriage is a long-term commitment, so it makes sense to choose an investment that could make you richer, not poorer.

*As an investor, it’s important to remember you’re lending to businesses so your capital is at risk. Tax treatment depends on the individual circumstances of each investor and may be subject to change in future.

**Capital at risk. Target rate is variable, net of ongoing repayment fees and bad debt.

Article author

Gareth Mackie

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If you invest through LendingCrowd you should understand that your capital is at risk.

LendingCrowd is the trading name of Edinburgh Alternative Finance Limited, Company Number SC468392, authorised and regulated by the Financial Conduct Authority (Firm reference number 670991). LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

Read more about the risk involved when investing and borrowing.

The company's registered office is 23 Manor Place, Edinburgh, EH3 7DX.

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