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Innovative Finance ISA information hub

What is an ISA?

There are four main types of Individual Savings Account (ISA) – Cash, Stocks & Shares, Lifetime and Innovative Finance. Each tax year, you get an ISA allowance from the government – this is the maximum amount you can contribute to an ISA (or ISAs). For the current tax year, the ISA allowance is £20,000.  You can have more than one ISA but only contribute money to one of each kind during the same tax year.

Cash ISA

This is simply a savings account for your cash, where the interest earned isn’t taxed. It doesn’t count towards your personal savings allowance, which is the amount of savings income (currently £1,000 a year, or £500 if you’re a higher-rate taxpayer) you can earn without paying tax on your interest.

Stocks & Shares ISA

This lets you invest in bonds, funds and the shares of individual companies, with tax-free interest and capital gains.

Lifetime ISA

If you’re 18 or over, this lets you contribute up to £4,000 a year, until you’re aged 50, to save for later life or buy your first home. The government adds a further 25% each year. You must be under 40 to open a Lifetime ISA.

Innovative Finance ISAs

Also known as an IFISA, this category of ISA was launched in April 2016 and allows you to earn tax-free returns* on your peer-to-peer (P2P) loans. IFISAs can only be provided by P2P platforms that have been fully authorised by HM Revenue & Customs and the UK’s financial regulator, the Financial Conduct Authority. LendingCrowd was one of the first platforms to launch an IFISA and offers three different products, all of which can be held within the same tax-free* wrapper:

  • The Growth ISA is aimed at lenders who want a quick and simple method of creating a diversified portfolio of business loans. It automatically diversifies your funds across the loans available on our Loan Market and the minimum deposit is £1,000.
  • The Income ISA is designed for those seeking to generate a consistent level of income from a lump sum without eating into their capital. It lets you take an income from the interest earned on your loans while your capital repayments are automatically lent out. The minimum deposit is £1,000.
  • The Self Select ISA is for experienced P2P lenders who have the time to hand-pick which businesses they want to lend to, making sure borrowers match their appetite for risk. To achieve good returns, you’ll need to lend out your capital and interest repayments on a regular basis. The minimum deposit is £20.

PLEASE NOTE: we have temporarily stopped taking new lender registrations and also new cash deposits from existing lenders on our platform. Find out more.

Who can open an ISA?

To open a LendingCrowd Innovative Finance ISA, you must:

  • be 18 years old or over
  • hold a National Insurance number
  • be resident in the UK

If you’re interested in opening an IFISA with LendingCrowd, you’ll need to register first and complete a quick investor classification and appropriateness assessment – this is a requirement of P2P lending. You can lend up to £20,000 this tax year and transfer in any other ISAs you hold.

PLEASE NOTE: we have temporarily stopped taking new lender registrations and also new cash deposits from existing lenders on our platform. Find out more.

*Tax treatment depends on the individual circumstances of each lender and may be subject to change in future.

**When lending to businesses, it’s important to remember that your capital is at risk. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

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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