Today, we explain how to get the benefit of the high yields available via cutting-edge technology investment – even if you don't bother much with modern technology. In fact, even if you haven't got so much as an email address.
There's much talk in the mainstream and digital media of the way financial technology (FinTech) is shaping the modern world. FinTech is certainly on the verge of revolutionising the income-investment market.
We recently surveyed 233 cash accounts eligible to be wrapped into a tax-free Individual Savings Account (ISA). The results proved to be a grave disappointment to income-hungry investors seeking to get a good return on capital in an environment where retail price inflation is running at the three per cent level.
The average gross return achieved by Money&Co. lenders in over three-and-half years is over 8 per cent.
So the income, if you understand the risks of lending (see below), is attractive. It's relatively easy to logon to our site and register to become a lender. But if that's all too new-fangled, you can call us on 020 3143 4004 or write to Money&Co., 58 Glentham Road, London SW13 9JJ. We'll then send you an ISA Brochure, an ISA Transfer Authority form (if you want to transfer monies from a Cash ISA) and a Freepost envelope. Then it's just a question of following your nose to get that income...
A Process Guide To Innovative Finance ISA Investment
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:
We currently have one offering on site - an A-rated loan with a fixed-rate yield of 8 per cent, 43 per cent filled. More loan offers are due on site soon.
The ISA allowance for 2018/19 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 an earlier article on security, access and yield.
If you haven't made a loan via Money&Co. before, please read the risk warnings and the FAQ section. You may also wish to consult a financial adviser before making an investment. Capital is at risk, once loaned.