Thoughts please on retaining Zopa as an investment .

TUVOK

I have held an account in Zopa for about 5 years, according to my statement, I am still earning about 4.50%.

I thought that after the covid lockdowns, the % profit might fall due to non payments etc, but although there are about 90 on my account, the profit margin seems to be holding.

Any thoughts, views on retaining this account would be welcomed. 

TheMilkmansDad

Hi Tuvok,

May be worth asking the question on the P2P forum, i used to find it helpful and informative.

https://p2pindependentforum.com/board/33/zopa

Personally, I left Zopa a couple of years ago as needed to liquidate some assets.

  

Nebulous2

Did you read their latest email? 

Problem loans have been lower than they expected, as they tightened their lending criteria. 

I've a modest sum with them, but I'm not currently reinvesting the repayments / interest - drawing it out once a month. 

tostaky

Nebulous2 said:

Did you read their latest email? 

Problem loans have been lower than they expected, as they tightened their lending criteria. 

So I thought that was a good thing that they were tightening up their lending criteria.
I have had some money since the beginning there in an ISA and happy about it. I dont reinvest in there as I prefer to have my eggs in different baskets  though.

moneysavinghero

Natwest also recently said that they have had much less defaults than expected. Furlough and the fact that people have been stuck at home with nothing to spend money on are probably big factors in this. What is going to happen when furlough ends and there is the double whammy of no money coming in and lots of places open where you could be spending what money you do have.

Ash_Pole

I've been getting out of P2P for a couple of years now (unfortunately not fast enough in some cases). I've got 16k in Zopa still and think I'll keep this one on

I'm also showing a good % return still but the last time I delved deeper about 2.7k was in arrears.

Aceace

TUVOK said:

I have held an account in Zopa for about 5 years, according to my statement, I am still earning about 4.50%.

I thought that after the covid lockdowns, the % profit might fall due to non payments etc, but although there are about 90 on my account, the profit margin seems to be holding.

Any thoughts, views on retaining this account would be welcomed. 

When you say you are "still earning 4.5%", is that the NAR calculated by Zopa? If it is, then as you've been with them for 5 years the current return could be far less, as it's an average annualised value over the lifetime of your investment. As a simplistic example: if you'd been receiving 5.625% for the first 4 years and zero for the last year, it would still show an NAR of about 4.5%.
Also, my own actual annualised return is lower than stated by Zopa. I suspect that this is, at least in part, due to them not taking the initial cash drag into account (I.e. the length of time it takes to get the funds invested, which is currently about 50 days without interest).
Like others have said, I'm concerned that defaults could see a significant rise when the various government Covid support schemes come to an end.
I've been withdrawing from Zopa for a long time now as I think there are several other P2P platforms with a better risk/return combination. I'm favoring the lower risk property secured platforms for my ex-Zopa funds.
I think that Zopa has done reasonably OK so far, but they're firmly in the bottom quartile for performance of the very many platforms that I've tried so far. 

TUVOK

Thanks for all replies.
I had about the same amount in Ratesetter and I started to withdraw money from them and from Zopa.
As you will now be aware, Ratesetter is closed for P2P, I've halted withdrawing from Zopa for a week now, but thanks to some of the informative replies I have had, I will start withdrawing again and run it down as quickly as I can.

Dogsblody

I was looking at P2P as an investment. The news that subprime lenders are being pursued for compensation due to lending to customers without fully checking affordability has me worried. Is it possible the P2P lenders may also find claims against them? 

Aceace

Dogsblody said:

I was looking at P2P as an investment. The news that subprime lenders are being pursued for compensation due to lending to customers without fully checking affordability has me worried. Is it possible the P2P lenders may also find claims against them? 

I'm aware of 2 cases where P2P borrowers have attempted to take P2P lenders to court. IMO they are both vexatious litigants who are well practiced at navigating the legal system to wear down their opponents in an attempt to avoid paying their dues. I expect both to ultimately fail, but it's always possible that some technicality will be found in their favour.
Then there's the case at MoneyThing where litigation by a borrower forced them into early administration, but they were already in wind-down anyway. 
I expect that these cases will have led to other platforms tightening their procedures to protect against similar actions where possible. As someone who uses P2P for roughly 50% of my investments across a large number of platforms, I don't lose any sleep worrying about being sued. I trust that the courts would ultimately conclude that individual lenders were not liable for any platform misdemeanours. It's possible, but it would also be possible that I could be sued for unknowingly infecting someone with Covid when visiting a coffee shop, and I don't worry about that either.