Stocks & shares ISA vs Funding Circle ISA

FeathersForever

I'm finally at the point with savings where I think I should be investing a bit. I can open a new ISA in the new tax year in April.
I've been looking at stocks and shares ISAs, such as through Open Money. And then I also came across this: https://www.fundingcircle.com/uk/investors/
With a Funding Circle ISA, you're still getting tax free savings, with a better return than the banks seem to give, but you're giving loans to small businesses rather than investing in the stock market.
I'm weighing up the pros and cons of a Stocks & Shares ISA vs Funding Circle ISA:

• Both have some risk. I don't know which has higher risk?
• Both can be managed/not require investing knowledge (I'd always opt for something that requires no financial knowledge)
• With both, I could choose whether to go higher or lower risk
• Both have some costs, but neither seem to have high fees
• With both, I should be looking to only put in cash I can leave in for a while.
• I can't tell which is more likely to have higher returns. Funding Circle are pretty open, approx. 4%-6% return. With Stocks & Shares it's harder to figure out what my likely return would be.
• I like the idea of Funding Circle, because it feels like I'd be doing something a bit good with my money, rather than gambling (which is what Stocks & Shares feels like) But I want to make this decision with my head not my heart.
• Funding Circle feels simpler and more transparent.

A bit about me in case it's relevant:

• Mid-30s
• I have a safety net (12 months - I'm self-employed and paranoid!)
• I am already paying into a pension monthly
• I don't have any debt apart from my student loan.

Anyone got any info/advice?
Thanks in advance!

masonic

I have no direct experience of FC, but I know plenty who do and it would be an understatement to say opinions were not very positive. It's impossible to predict your likely return and approximate rates should be viewed as maximums, with minimums being the permanent loss of substantial amounts of your capital. Whereas S&S investments can be 5% +/- 30%, markets have historically always bounced back from crashes, and if they did not it would probably be a sign that you were about to experience some more significant problems in your life than loss of wealth.

I've been investing in P2P for over 5 years, and it's been hard work for little return (owing to substantial losses). I currently have money tied up in two P2P firms that went bust and I have a borrower threatening to get a court order to obtain my identity so he can sue me because I invested in a couple of his loans arranged by another P2P firm. It's shark infested waters beyond most people's wildest imaginings. If only I knew then what I knew now.

FeathersForever

Eep ok. Thanks for replying. Sounds like Stocks & Shares might be the way to go. Thank you.