£144m was put into Innovative Finance ISAs (IFISAs) in the 2021/22 tax year, up from £92m the previous year.
New HMRC data on ISA subscriptions revealed that total number of accounts subscribed this tax year was 17,000, compared to 16,000 in 2020/21.
The average amount invested per IFISA account also experienced growth in 2021/22, rising to £8,520 from £5,750 the previous year.
Read more: How liquid are IFISAs?
While the data shows growth in the IFISA market compared to the 2020/21 tax year, the volumes are still lower than previous years.
£438m was subscribed into IFISAs in 2019/20, across 34,000 accounts.
Total market IFISA values have fallen from £995m in 2019/20 to £781m in 2020/21 and £563m in 2021/22, the HMRC data showed.
However, the true figures may be higher, as HMRC noted that “data on IFISAs has low reliability based on not yet holding full information from providers.”
Read more: IFISA interest on the rise
Stricter regulations, including investor marketing restrictions, have caused a number of peer-to-peer lending platforms to pivot away from restricted retail investors towards sophisticated, high-net-worth and institutional money. As a result, some industry onlookers have suggested that this will lead to less interest in IFISAs, which are a retail-friendly product, with larger investors likely to put money into platforms’ standard accounts.
The HMRC data also showed that the cash ISA market shrunk in 2021/22, while the stocks and shares ISA market grew.
There were around 7.14 million subscriptions cash ISAs in 2021/22, a decrease from 8 million in 2021/20; and stocks and shares ISAs saw a slight increase from 3.59 million in 2020/21 to 3.9 million the following tax year.
The amount subscribed in the cash ISAs decreased to £30,908m from £36,815m, whilst stocks and shares rose to £34,187m from £33,853m.