Where should you put your IFISA money this ISA season?
Several peer-to-peer lending brands may have left the Innovative Finance ISA (IFISA) market but there are still plenty of options for new investors looking to make the most of this year’s tax-free allowance before the April deadline.
Assetz Capital became the last of the £1bn lenders to exit the space earlier this year and claimed to have around £72m in its IFISA wrapper. For the same £1 minimum investment, you can still access its sister brand Assetz Exchange’s social-focused property developments in an IFISA for a rate of up to six per cent.
Returns are just one metric for assessing a P2P lending platform and it is important to do your research so you understand the type of loans being backed, the platform’s loan book performance and the risks you are taking.
According to the latest Peer2Peer Finance News data, several P2P lending platforms are currently targeting double-digit returns through their IFISA accounts. Share Credit is advertising returns of up to 16 per cent for IFISA investors, although its weighted average annualised return for 2022 was 8.27 per cent.
Meanwhile, consumer lender Fund Ourselves offers returns of between five and 15 per cent for a minimum investment of £1,000.
If you prefer to invest in secured loans, you can put money into property-backed finance through platforms such as Shojin, which offers rates of up to 15 per cent depending on the project, for a £5,000 minimum investment.
Read more: IFISA returns on the rise
LandlordInvest, Proplend and Sourced Capital all have interest rates of up to 12 per cent for a lower minimum investment of £1,000.
If you want to back small businesses, P2P lender Crowd2Fund offers rates ranging from eight to 15 per cent depending on the loan opportunity, for a £100 minimum investment.
Another business lender, Rebuildingsociety, has rates of up to 6.1 per cent and you can invest with as little as £10.
Read more: How liquid are IFISAs?
Looking at longevity in the market, the longest standing P2P lender since Assetz Capital’s exit is now Folk2Folk, which launched in 2013. Its target rates range from 7.5 per cent to 9.5 per cent per year secured against land or property but investors need a minimum investment of £20,000.
Meanwhile, residential development lender CrowdProperty, which launched in 2014, offers rates of up to 8.5 per cent for a minimum investment of £500.
These are all factors to consider as you weigh up where to put your IFISA money this ISA season.