P2P platforms report busy IFISA season

Peer-to-peer lending platforms and other alternative lenders have reported an uptick in Innovative Finance ISA (IFISA) inflows this year.

In the weeks leading up to the start of the new tax year on 5 April 2024, investors rushed to make the most of their annual tax-free investment allowance by topping up existing IFISAs and opening new accounts.

Rishi Zaveri, chief executive of consumer lending platform Lendwise, said that he saw almost double the number of subscriptions from the previous year.

Read more: Folk2Folk IFISA to remain P2P focused

Meanwhile Jacky Chan, head of investor relations at Shojin, confirmed that the property lender saw a rise in IFISA investments ahead of the tax year deadline.

Nattalie Weeks, head of portfolio at Kuflink, told Alternative Credit Investor that the platform was “very encouraged by the strong investment flow we have seen coming to us over the last few weeks.”

“An uplift just before the closure of one tax year is typical,” she added. “However at the start of the next, we would expect IFISAs transfers to level out.”

During the 2024/25 tax year, the IFISA market is expected to become more competitive as P2P lenders will be competing with open-ended property funds and long-term asset funds for IFISA money.

Read more: IFISA returns outperform cash and stocks

Many P2P platform chiefs believe that the new IFISA rules will help to bring P2P lending into the mainstream as an investment option for individuals.

“The new rules that came into effect in April could make the IFISA market more dynamic and investor friendly, giving more choice to diversify the allocated allowance of £20,000,” said Kuflink’s Weeks.

“However, there still needs to be more education around the alternative space to encourage investment as most people aren’t aware of the alternatives to cash ISAs, where rates are still low.”

Read more: British ISA could add £59bn to UK savings market