Cynics might file this one under: “Believe it when I see it.” This latest governmental initiative might work, but we expect more of the same – FinTech acquisitions by mainstream banks when they like the look of the asset prices.
Some of the UK’s biggest banks have signed a government-backed pledge to improve collaboration with fintech firms.
Launched by Tech Nation with support from HM Treasury, the Fintech Pledge is designed to boost the sector by helping to establish efficient and transparent commercial partnerships between banks and fintech firms.
Barclays, HSBC, Lloyds, NatWest and Santander have already signed the pledge, the key principles of which require them to provide clear guidance to technology firms on the onboarding process.
The banks will – within six months of signing the pledge – provide a dedicated landing page and a named contact, as well as guidance and feedback to firms looking for partnerships.
John Glen, Economic Secretary to the Treasury says: “The UK is already the best place in the world to start and grow a Fintech, and we’re committed to that remaining the case as our economy bounces back. So I welcome the Fintech Pledge from some of our leading banks and look forward to more firms becoming signatories.
Historical Performance And IFISA Process Guide
That figure is the result of over £23 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.