Our friends at AltFi offer more detail, in so far as currently available, on the governmental FinTech review, as announced in the Budget. We welcome the government’s move – if it promotes a light touch and a principles-based approach to regulation.
The review will be headed by Ron Kalifa OBE who is a non-executive director of the Court of Directors at the Bank of England and the vice-chairman of WorldPay, where he has been for the last 18 years.
According to the Budget transcript, Kalifa will “lead a major review into the fintech sector.”
The main aim of the review is to “identify what more industry and government can do to support growth and competitiveness, to ensure that the UK maintains its global leadership in this vital sector”
“The government will also extend funding for the Fintech Delivery Panel, as well as touring the regions and nations of the UK to showcase its diverse range of fintech firms,” it went on.
The amount of funding the existing panel is set to receive was not disclosed in the Budget transcript.
The UK is currently one of the most desirable locations for fintech and despite not receiving some of the boosts they had perhaps wanted to, the creation of this panel could see the UK become even more attractive to international startups and scaleups, as well as giving a helping hand to homegrown talent.
There are more and more regional fintech bases springing up around the UK and the Chancellor appeared to be aware of the need to shift focus to outside of London to bolster growth across the country.
Sunak repeatedly mentioned the need to distribute opportunity across the country.
Historical Performance And IFISA Process Guide
That figure is the result of over £19 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.