Amid all the dark prognostications surrounding Covid-19, the news surrounding the FinTech sector is relatively good. Certainly, for cloud-based businesses such as Money&Co., it’s been relatively easy to find a new way of working.
The “new normal” is a term that has been used with increasing regularity over recent months. It refers to the lasting changes COVID-19 will have on people’s day-to-day lives.
From social distancing to new health and safety measures, remote working to travel restrictions, exactly what the “new normal” is going to look like will only become clear over time. However, what is already becoming apparent is that demand for technology is going to rise.
With people cut adrift from the physical world, digital solutions have already become increasingly important for both consumers and businesses. Zoom stands as a testament to that; unable to meet in person, colleagues, friends, and family turned to technology to keep connected. On its quarterly earnings call webinar in June, the video conferencing tool reported a total revenue of $328.2 million in the three months to 30 April 2020, a 169% increase from the same period last year.
Not only have consumers relied on technology for everything from managing their financial affairs to ordering groceries online, but industry sectors that have hitherto not been the most forthcoming in their adoption of tech have suddenly looked to digitise many of their processes. Pubs are now reliant on taking online bookings, barber shops are using contactless payments instead of accepting cash, and cafés have replaced paper loyalty cards with rewards apps; examples can be seen all around us.
As a result, the technology sector as a whole – as broad and multifarious as it is – has been one of the few parts of the UK’s private sector to perform well during the immensely difficult coronavirus pandemic.
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.