Peer-to-peer lending sites: MSE guide discussion

jase.2

jamesd wrote: »

You shouldn't use either, really. Why accept such low interest rates and high sale charges?

What would you use instead then?

Bazofts_Revenge

Saw in the Times Financial pages today that supposedly the first 'Innovative Finance ISA' by company called 'Lending Works' holding peer to peer lending has been launched. I've been researching Peer to Peer for a while but haven't heard of Lending works anybody out there have any thoughts on them?

jamesd

Bazofts_Revenge wrote: »

Saw in the Times Financial pages today that supposedly the first 'Innovative Finance ISA' by company called 'Lending Works' holding peer to peer lending has been launched. I've been researching Peer to Peer for a while but haven't heard of Lending works anybody out there have any thoughts on them?

It's not the first IF ISA launch by a small provider, it's the fourth, you can find a list here.

Their most unique feature is insurance that can repay loans where that's affected by unemployment, accident, sickness or death, combined with a protection fund. The insurance should help to keep things in good shape during a recession.

They have been very responsive to ISA corrections and clarifications and that's a good sign if their customer service is as excellent.

They look like an interesting choice for those who want safety first, at the cost of lower returns (though higher than the protected Zopa and RateSetter products).

jamesd

jase.2 wrote: »

What would you use instead then?

Ablrate, MoneyThing and perhaps Collateral. Lending Works might be interesting for those who want the protection of a protection fund and the insurance on top that neither RateSetter nor Zopa have in theirs. Maybe slightly higher rates as well, though not as high as the first three after deducting likely bad debt levels in those.

jamesd

MyOnlyPost wrote: »

At the moment James for the £100 bonus on sign up

That's a good use of a thousand Pounds for a year.

TheShape

The Lending Works IF ISA looks interesting if only to dip my toe into p2p. I'm close to filling all the usual 3%+ current accounts/regular savers and expect to fully utilise my PSA in 17/18.

I'm looking for other options but I'm slightly wary of the risks and unsure about the tax implications of p2p (how to calculate return/report to HMRC).

The IF ISA appears to remove the concern re tax.

jamesd

HMRC P2P tax return guidance says you can just tell them if you don't complete a tax return already. I did it by phone for the first three years. If you need to use a tax return:

"Peer to peer interest should be entered on form SA101 Additional Information under Other UK income, Interest from gilt-edged and other UK securities, deeply discounted securities and accrued income profits.

When completing the SA101 form enter the:

box 3 - interest received gross less any bad debt relief from all platforms
box 1 - interest received net less any bad debt relief from all platforms
box 2 - full amount of tax deducted from the interest"

Other than possible initial nervousness I've found dealing with HMRC about this pretty easy, no hassles from them. No need to worry if you didn't mention it for a few years either, so long as you tell them without prompting.

masonic

TheShape wrote: »

The Lending Works IF ISA looks interesting if only to dip my toe into p2p. I'm close to filling all the usual 3%+ current accounts/regular savers and expect to fully utilise my PSA in 17/18.

I'm looking for other options but I'm slightly wary of the risks and unsure about the tax implications of p2p (how to calculate return/report to HMRC).

The IF ISA appears to remove the concern re tax.

If you fully utilise your PSA, then as things stand you'll need to declare all of the savings interest you have earned anyway.

In most cases, you can get a tax statement from the P2P platform just as you do from a savings account. I just write HMRC a letter with a table showing the total interest I've earned from each account.

TheShape

Presumably I'll only need to make a declaration at the end of the tax year at which point I should be able to get a tax statement from all my savings/current accounts and p2p platforms.

I had been considering just diverting enough savings into my S&S ISA to keep me below the PSA. Declaring interest from a couple of dozen accounts looks like a bit of a hassle.

Empor

Why is it taking the more established p2p's (Zopa etc) such a long time to get their IFISAs sorted out?