Zopa

mickysaver · 16 January 2009 at 1:16PM

I have just found a website regarding an organisation called ZOPA with high returns on deposits. Does anyone know of this organisation? They don't appear to be regulated by the FSA.

jon3001 · 16 January 2009 at 1:53PM

It's not a deposit account. You lend money to other people.

ryandj · 16 January 2009 at 1:56PM

I am a member of Zopa. You loan money to other people (as opposed to banks in a savings account) and get a return from that.

Very different to a savings account, since it is not secured funds. You can, if borrowers default, lose your money. Saying that, you only lend £10 to each person so the risk is spread around.

I have been a member for a year, with average returns of ~8-9%. So far, no bad debt, but I suspect this is likely to change this year as more people struggle to meet their payments.

withnell · 16 January 2009 at 2:05PM

You get to chose the risk profile of the people you loan to, from A*, A, B, C down to the Youth market. Returns will of course vary with this risk due to increased risk of default by the lower end!

Any · 16 January 2009 at 2:30PM

Zopa users, how do you treat the income from Zopa tax wise? I am thinking about becoming a lender myself...
(Especially as saving interest is sooo low..).
I understand the risk. But it's always been like that in investments - the higher the rist, the higher the return...

withnell · 16 January 2009 at 3:16PM

Any wrote: »

how do you treat the income from Zopa tax wise?

You declare it as untaxed investment income on your self assessment form (so if you don't normally fill in a SA form, then you need to question whether its worth the effort!)

imported_jac · 16 January 2009 at 4:09PM

Hi

If you join up as a lender with Zopa do you have to stay in the system until your loans have been repaid, say 36 months, or can they be taken up by someone else if you want to come out of the scheme.

Jackie

CoogarUK · 16 January 2009 at 7:04PM

imported_jac wrote: »

If you join up as a lender with Zopa do you have to stay in the system until your loans have been repaid, say 36 months, or can they be taken up by someone else if you want to come out of the scheme.

At the moment you have to stick with it as although it has been discussed on numerous occasions there is no secondary loan market and I don't see Zopa introducing one in the near to mid term (regulatory issues among other things).

As a lender you do get a portion - albeit a small one - of your money returned each month, as long as your borrower(s) maintain their repayments. You can either withdraw those funds from the system or lend them out again, the choice is yours.

TechnoBadger · 18 January 2009 at 4:01PM

Here is a short piece from Channel Five news last week which may be of interest::

http://news.five.tv/news.php?news=1477

Click on "By-pass The Banks"

vivgriffin · 21 January 2009 at 10:04AM

Bearing in mind the lack of decent savings products at the moment, I wondered what the current views were on lending to ZOPA. I put in £500 2 months ago as a test. I have not earned a great deal yet but, more than if it had been with a bank and no late payments or bad debts. I like the idea of ZOPA (sidelining the banks who have not really proved themselves expert in these matters). I am interested to know if anyone else is considering Zopa and if not, why not, to help me decide whether to invest (loan) more. Perhaps Martin should make more people aware of this option?

Any · 21 January 2009 at 11:21AM

I am seriously considering Zopa. I also like the idea of lending people money and the return is higher then when leaving it with bank. Thinking of starting slowly though - like £50 a month for the first 6 months..
Just have to have a look how much paperwork it is tax wise, but as I am a trainee accountant that shouldn't be a problem..

Zopa

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