Will the coming avalanche of high costs really affect you? Well, according to trade media outlet Altfi, a pay bump is reasonable to expect.
The fintech world took note yesterday after a leading investment bank warned inflation could spiral to above 18 per cent next year.
The gloomy prediction came from investment bank Citi and would mean UK inflation would be at nine times the Bank of England’s target and reach its highest point in more than 40 years.
The last time consumer price inflation was last above 18 per cent was 1976, official figures show.
Amid already spiralling inflation across Europe and the US, several fintechs have been forced to cut staff, citing inflation as a cause.
For example, Robinhood CEO Vlad Tenev cited “record inflation” as a reason the stock trading app was cutting 23 per cent of its staff earlier this month. Likewise, Klarna cited inflation when cutting 10 per cent of its employees in May.
But it remains to be seen if fintechs en masse will be offering staff a pay bump amid an even worsening economic environment.
Historical Performance And IFISA Process Guide
That figure is the result of over £24 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 2020/21 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.