Lending Works seems to be gradually closing

roytom2

Not very long ago I had to transfer my cash ISA from RateSetter (which closed) to Lending Works - now it’s happening again as they are winding down, in stages. I’m not sure I’ve understood it correctly but I think it means that from now on money won’t be lent out again. Is this right?
Now I’d like to move my entire ISA to another provider when it’s possible to do this.
any suggestions?
thanks

eskbanker

roytom2 said:

Not very long ago I had to transfer my cash ISA from RateSetter (which closed) to Lending Works - now it’s happening again as they are winding down, in stages. I’m not sure I’ve understood it correctly but I think it means that from now on money won’t be lent out again. Is this right?
Now I’d like to move my entire ISA to another provider when it’s possible to do this.
any suggestions?
thanks

I thought those two were providers of IF ISAs rather than cash ones?  What are you looking to do next time round, invest in P2P or use a cash account?

Alexland

eskbanker said:

roytom2 said:

Not very long ago I had to transfer my cash ISA from RateSetter (which closed) to Lending Works

I thought those two were providers of IF ISAs rather than cash ones?

I assume they intended to say a cash transfer between IFISA providers.

roytom2 said:

Now I’d like to move my entire ISA to another provider when it’s possible to do this.
any suggestions?

Maybe talk to LendingWorks to see if there are any options to sell down your existing loans but otherwise you will need to wait until the account is back to cash if you want to do a whole ISA transfer. You could ask if they support partial transfers out of any cash you might have in the account.

Albermarle

Maybe talk to LendingWorks to see if there are any options to sell down your existing loans but otherwise you will need to wait until the account is back to cash if you want to do a whole ISA transfer. You could ask if they support partial transfers out of any cash you might have in the account.

You can sell the loans  to other lenders but there will be some penalties and of course someone has to be willing to buy them . AS LW are running down their operation , I think people are going to be reluctant to buy loans with years still to run .

Otherwise you just have to wait until your current loans are repaid into cash .

I think partial transfers are possible but would make sense to wait until a reasonable amount of cash was available, say £1000.

Now I’d like to move my entire ISA to another provider when it’s possible to do this.
any suggestions?

Without knowing any details about your financial situation , this is a difficult question to answer. Maybe if you could say why you got into P2P lending in the first place , that might help.

roytom2

Both RateSetter and Lending Works provided P2P cash lending as well as P2P IF ISAs. 

I am open to suggestions where this ISA can be moved to but it appears that P2P lending platforms are disappearing fast. Whatever happens I want to maintain the ISA status. I think inevitably this will mean a catastrophic drop in the interest rate.

eskbanker

roytom2 said:

Both RateSetter and Lending Works provided P2P cash lending as well as P2P IF ISAs. 

I am open to suggestions where this ISA can be moved to but it appears that P2P lending platforms are disappearing fast. Whatever happens I want to maintain the ISA status. I think inevitably this will mean a catastrophic drop in the interest rate.

Still not sure I understand exactly what type of ISA you currently have - HMRC makes a clear distinction between cash ISAs and IFISAs (which can have cash in them), but to a certain extent it doesn't really matter, and the key question remains what you actually want to do with the money in future,  i.e. the fundamental decision about what type of saving or investment you have in mind is more important than the wrapper used, but you would ultimately need to decide if you're looking to continue with P2P (in whatever form) within a IFISA or to use other types of ISA instead, such as a cash ISA or a S&S one?

Albermarle

Both of these companies operated a peer to peer lending business mainly to unsecured retail borrowers .

You could invest ( be the lender ) outside of an ISA ( and possibly pay tax on some income) or inside an ISA , where there would be no tax to pay. The type of ISA is known as a IFISA. Neither company ever offered a 'Cash ISA' 

I am open to suggestions where this ISA can be moved to
As Eskbanker has said , you can move it to another IFISA/P2P provider ( there are still some ; Loanpad and Assetz Capital are often mentioned ) a Stocks and shares ISA or a cash ISA .
Your money is only safe in the last one . The other two are risk based , so your fund could go up or down.

Aceace

roytom2 said:

Not very long ago I had to transfer my cash ISA from RateSetter (which closed) to Lending Works - now it’s happening again as they are winding down, in stages. I’m not sure I’ve understood it correctly but I think it means that from now on money won’t be lent out again. Is this right?

Yes, LW are running down their retail Lending, so you won't get any new loans. However, if you hadn't turned your autolend settings off you could still pick up loans that other lenders are selling off. There are instructions in their email as to how to turn Lending off.

roytom2 said:

Now I’d like to move my entire ISA to another provider when it’s possible to do this.
any suggestions?
thanks

LW allow partial transfers out. So you can transfer any cash in your holding account to another provider. It's not a good idea to leave this until all of your cash is returned to your holding account as this will probably take around 5 years, and any cash in your holding account won't be earning any interest during this time. 

There are many IFISAs that accept transfers in, so you need to research which one (or more) you want to go with in future. The obvious one that many seem to be choosing is Loanpad. They are a completely different proposition to LW, but are firmly at the lower risk end of the P2P spectrum. LW loans were largely unsecured, whereas Loanpad Loans are secured against property, so should be safer that LW loans were. There are many other possibilities available depending on your attitude to risk. One of the positives with Loanpad are that your cash won't suffer from cash drag as all your cash allocated to their investment accounts earn interest even if the cash in the account hasn't actually been allocated to loans. 

Guto

Once your money is in your holding account, you can arrange a transfer to any other cash ISA. It doesn't have to be an IFISA, as money in "holding" is deemed to be available as cash. I've been doing this regularly over the last few months, once there is a decent amount in holding. I opened an easy access cash ISA - so I can make repeated transfers in. 

Albermarle

Guto said:

Once your money is in your holding account, you can arrange a transfer to any other cash ISA. It doesn't have to be an IFISA, as money in "holding" is deemed to be available as cash. I've been doing this regularly over the last few months, once there is a decent amount in holding. I opened an easy access cash ISA - so I can make repeated transfers in. 

For most people , a cash ISA is unnecessary as a basic rate taxpayer can earn up to £1000 in interest without paying any tax.
So if you transfer the IFISA cash into a normal bank/savings account , it is much quicker and you will most likely get a better interest rate. Unless you already have a large amount of savings .