The Financial Services Bill, laid out in this week’s Queen’s Speech, aims to bring “certainty, stability and new opportunities” to the UK banking industry, report our friends at AltFi.
The Bill is geared to ensuring the UK’s financial rules continue after Brexit as well as the UK remaining open to international markets.
The Bill will be debated on and voted on by MPs…
… the arrival of the Financial Services Bill follows a previous Financial Services Bill which was pulled earlier this year, after ministers feared the government was likely to be defeated on an amendment requiring Jersey, Guernsey and the Isle of Man to stamp out on money laundering.
Our view at Money&Co. is that legislation needs to nurture and protect our young industry. As a lending platform, we like the attitude of the government so far, but the fear must be that too much legislation might stifle innovation in the FinTech sector.
New Loans Latest
Project Rhapsody is now 73 per cent funded. The loan offer has an A risk rating, and provides a fixed-rate return of 8 per cent over five years.
Fuller detail is excerpted from the borrower’s offering on site below. The whole pitch – vetted according to our credit committee’s best efforts, though we cannot warrant the accuracy of the statements – is available to logged in users.
Historical Performance And IFISA Process Guide
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.
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:
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.