The figure 2% is a cosy number. It’s good for company. It’s not a crowd. It’s manageable. It’s the accepted norm you might say.
How come then that millions of us blindly invest in stocks and shares or cash ISAs every year for miniscule 2% returns? According to figures from wealth manager, Nutmeg, savers have seen the value of their money fall by £4,218 in real terms for the past 15 years after inflation when using their full cash ISA allowance each year.
But now people are getting bored with the 2% club. ‘This is Money’ website is predicting that P2P Lending ISA returns could double or even triple current standard ISA returns; the latter in the region of 6%. Yet the half a dozen figure needs to be set in the context of peer-to-peer lenders receiving tax breaks to boost an already fast-growing industry, according to a Sunday Herald article on the growth potential of crowdlending.
Research published earlier this week by the Peer-to-Peer Finance Association (P2PFA) has shown wide support for a new Lending ISA.
LISA to you and I.
OK, our great expectations for the Budget may not have brought the news we wanted for initial inclusion of P2B ISAs; we have to wait until the summer for further clarity over a consultation.
LendingCrowd supports the P2P ISA consultation on how best to implement the changes
The government is currently reviewing responses to the P2P ISA consultation on how best to implement the changes. But there’s good news from the P2PFA. It discovered that 74% of peer-to-peer lending investors like the idea of keeping their peer-to-peer lending in a separate lending ISA.
Of the 4,500 members, the research found that:
- 81% agree that peer-to-peer lending has different characteristics to investments in a Stocks and Shares ISA.
- The same figure agree that a Lending ISA will introduce more choice across the investments market.
- If the Government introduces a Lending ISA, 62% will definitely invest in one.
Christine Farnish, Chair of the P2PFA, said that the survey results give a “clear message: “Consumers want to see greater choice across the ISA market and the creation of a Lending ISA is a positive and necessary step. Peer-to-peer lenders and consumers fully back the decisions that have already been made by the government. It is quite clear that they do not want to see peer-to-peer lending shoehorned into either the cash or the stocks and shares category of ISA because it is different in kind.”
What do you think? Bog standard ISAs will turn 16 years old on April 5.
But they won’t be Many Happy Returns…
Are you happy to wait for P2P Lending ISAs later in the year..?
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