Opening the IFISA floodgates
New rules for the Innovative Finance ISA (IFISA) will come into action in April 2024, with many predicting that the new-look IFISA will attract a raft of new investors to the tax wrapper.
The new rules will extend the remit of the existing IFISA, making long-term asset funds and open-ended property funds eligible for inclusion for the first time. In a reversal of an earlier rule, investors can now open multiple IFISA accounts per year, rather than being limited to just one.
As one of the most high-profile IFISA providers in the country, easyMoney is well placed to take advantage of this incoming IFISA boom.
Read more: Interest in IFISAs surges as new rules unveiled
Jason Ferrando, chief executive of the peer-to-peer lending platform, has welcomed the rules as a “positive for the industry”.
“The new rules can only be a positive for the industry as not only do they provide a greater degree of choice and accessibility to the consumer, but they will help put the spotlight on IFISAs and the often-superior returns they offer,” says Ferrando.
“We’ve already enjoyed strong and consistent growth since launch and so the latest rule changes will only help to boost this momentum going forward.”
Read more: easyMoney urges ISA savers to invest before rates fall
At the time of writing, easyMoney is the largest IFISA provider in the country, with more than £72m invested within its tax wrapper. The platform won the coveted IFISA Provider of the Year award at the Peer2Peer Finance Awards in December 2023 (pictured).
Ferrando believes that this success is due to a number of factors.
“Our zero default record* is a key part of this and we have been able to offer strong target interest rates,” he explains. “However, it’s just as important that we provide accessibility and support for our investors.
“In addition, there are no fees to investors, no lock-up periods and our interest is paid monthly.”
easyMoney’s IFISA accounts pay between 5.53 per cent and 10 per cent per annum, with all loans secured against UK property.
The platform keeps its zero default rate* thanks to the expertise of its team, as well as monthly site visits, constant updates, low loan-to-values (LTVs) and a diligent approach to underwriting.
Read more: The new IFISA rules explained
Ferrando believes that this prudent approach will make the platform more attractive to brokers and ultra-high-net-worth individuals (UHNWIs) who might be considering an IFISA for the first time in 2024.
“The introduction of new rules is always likely to lead to a heightened degree of interest for IFISAs and as one of the leaders in the sector, we expect this will only help strengthen our position in the market as we attract further investment from UHNWIs and our assets under management continue to grow,” he says.
“Of course, we’re unapologetically biased when it comes to our IFISA offering but there’s good reason for this. We have an experienced team and as a result of great underwriting, we offer a low LTV across the book.
“But most importantly, we continue to maintain our zero default record* which is one we are incredibly proud of.”
Recent research by easyMoney found that demand for ISAs is growing, and over the last decade the pre-deadline spike in ISA queries has grown by an average of two per cent per annum.
“Its clear that appetites for ISA investment are growing,” says Ferrando.
“It’s important to remember that the IFISA is just seven years old and while we’ve seen consistent growth, we believe that there is more to come, particularly with the additional exposure gained as a result of latest rule changes.”
* A default rate of zero means easyMoney has never made a loss to date, but past performance does not guarantee future results.
