P2P Investors Are Getting Younger – Plus Loan Latest


Peer-to-peer (P2P) lending is a young and fast-expanding sector embedded within the wider alternative finance sector. It is, then, something of a surprise that the ‘average’ user is predominantly older (over 60 in the case of many platforms from what we hear in the industry) and male.

The theory is that in the prevailing low-interest-rate environment the search for income has led such investors to take a careful look at P2P as an asset class, evaluate the risks, and then to commit capital.

According to our friends at P2P Finance News, the age profile of the average P2P investor is about to get younger. We offer an excerpt from the article below. The full piece is available here.

  • At this point, it’s instructive to remind visitors that there is no profit without risk. We stress the importance of understanding risk, and suggest that potential investors look at the risk warnings on site (more detail at the foot of this article, on our Home Page, in FAQs and elsewhere on site).

THE YOUNGER generation is interested in peer-to-peer lending, which could be an untapped opportunity for the sector, claims a new report from data specialists CACI.

Using Fresco Segments, which parses population data by age, wealth, income, behaviour and attitudes, CACI found there were 16,000 web searches for the term “P2P lending” in the first three months of 2019.

36 per cent of these searches came from the four youngest Fresco segments, the report said.

This demographic typically has less money in savings, the report added, suggesting that they are less risk averse and tempted by the higher returns offered by the P2P sector.

“This as yet untapped age group could be a ripe opportunity for P2P players to make their mark,” CACI said.

Meanwhile, individuals in the wealthiest Fresco segment – high income professionals – were two-and-a-half times more likely than the average consumer to search for the term. However they are also 15 per cent less likely to visit a P2P platform compared to the average user.

Loan Latest And IFISA Process Guide

  • Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). New loans are expected to land on site soon.

That figure is the result of over £17 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.

  • Money&Co. has been lending for over 5 years and has only had one bad debt so far, representing a bad debt rate of 0.04 per cent per annum.

All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.

So here’s our guide to the process:

  • Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
  • Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
  • Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.

The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.

Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.

Risk: Security, Access, Yield

Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.


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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.