On top of Covid issues, there are genuinely man-made threats to our financial environment – as investors in LCF bonds, as lenders who lost money in the collapse of the Lendy direct lending platform will doubtless agree. The FinTech Times looks at another major man-made problem, and the outlook for regulation in the wake of the Wirecard debacle.
Currently, the FCA is consulting on payment firms safeguarding and has confirmed in its latest business plan that making payments safe and accessible is one of its top priorities. An FCA spokesperson told The Fintech Times that “The FCA will continue to proactively supervise firms in this sector and will act swiftly where firms fail to meet safeguarding and other regulatory requirements.”
However, for some fintechs the FCA isn’t moving fast enough, especially when examples of best practice exist in other countries around the world.
Historical Performance And IFISA Process Guide
That figure is the result of over £21 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.