3rd March 2017
P2P, Peer to Peer Lending
In April 2016, the UK Government announced that for the first time, peer-to-peer lending (P2P) could take advantage of a tax-free wrapper, much like the Stocks and Shares ISA, known as the Innovative Finance ISA. 
The IFISA, as it’s known in the industry, allows for the same tax-free benefits of the Cash ISA and the Stocks and Shares ISA, but with the return gained via P2P investments or other sources of alternative finance.
However, as many P2P platforms weren’t actually authorised by the Financial Conduct Authority (FCA) at the time, there’s been a bit of a backlog, to the tune of nearly a year, with getting many platforms authorised and able to actually offer the IFISA.
This change happened slowly over the course of the last 12 months with many platforms now offering the new ISA class to their customers.
Before we go on and list them however, here’s a brief once over of just what the IFISA is, in case you’ve had your head in the sand.
What is the IFISA?
As you probably already know, UK savers are entitled to a tax-free ISA allowance of up to £15,240 per year, set to increase to £20,000 as of the new tax year 2017. Your ISA allowance may be spread across all types of ISA, though you can only open one ISA of each class per year.
Word to the wise: We have written extensively about ISAs, including the IFISA. So, if you want to really brush up, check those pages out.
Why choose an IFISA?
There are a number of potential reasons why one may want to invest in an IFISA, not least due to potentially higher yields than a simple Cash ISA, though with greater potential reward comes greater potential risk.
And, of course you have to remember that with a P2P investment, you won’t be covered by the Financial Services Compensation Scheme (FSCS) if the platform goes belly up.
It’ may not be all risk however, as some platforms do offer safeguards against defaults, just in case, which we’ve listed in this handy guide here
This sounds great, where can I get one?
The million dollar question for P2P investors for nearly a year, here’s where you can get hold of an IFISA as of February 2017.
Abundance – the ethical investment platform which allows people to invest in renewable energy projects. Typical returns sit between 6 – 9% which could save you money, and save a bit of the planet at the same time. 
Crowd2Fund – the platform which enables lending to businesses allows you to quickly transfer your old ISA and boasts estimated earnings of 8.7%.
Crowdstacker – one of the first platforms to introduce the IFISA, Crowdstacker is now attracting £1m worth of investment in its ISA product per month. The platform boasts a ‘typical’ investment return of between 5 – 7%.
LandBay – As one of the latest to announce their IFISA product, LandBay allows investors to invest with as little as £100 in loans backed-up by British property. Expect returns of around 3.75%.
Lending Crowd – the Scottish firm has just (literally, just) announced that their IFISA is now open for business. Boasting potential returns of 6%.
LandlordInvest – the platform enabling property-backed investing allows residential buy-to-let mortgages and bridging loans. Currently touting up to 12% per annum returns.
Lending Works – Having beaten LendingCrowd to the punch by just over a week, Lending Works is the first platform that allows investors to invest in individuals. The platform is now offering investors the chance to earn up to 4.7% in returns.
CapitalRise – As the first property-based P2P platform to offer the IFISA, CapitalRise launched its version of the product in early March. The platform boasts a speedy sign up process, and immediate investment on property investment.
Goji – Released in late March, Goji has now released the IFISA on their flagship bond. The bond invests in several platforms and offers rates of around 5%.
As you can no doubt see from the above, of all the P2P and crowdfunding platforms out there, only six actually offer the IFISA at this current time. That said, there are many that have been given FCA authorisation, and are now in the midst of setting up their ISAs, some sooner than others.
In the very near future, Money & Co are set to launch their IFISA which should hit the shelves, so to speak, in March.
After that, time will tell when FCA authorised platforms, CapitalStackers, Folk2Folk, Peer Funding Limited, Crowd for Angels, Peer Funding Limited, British Pearl, and Octopus Choice, decide to open their ISA.
And, in the long-term, the big guns may all be joining the party too. So, expect to see RateSetter, Zopa, and Wellesley in the very near future also.
So there we have it, we’ll keep updating this list as the new ISA classes get released, but for now – if you’d like to keep in the know, just head to the news section of our site, or sign up to our newsletter.
As with all investments, no returns are guaranteed with P2P, even if you’re lending to businesses. Please also be aware that your tax treatment is dependent on your personal circumstances and may be subject to change in the future.P2P is not covered by the Financial Services Compensation Scheme and your capital is at risk.
Our straightforward guide to peer to peer investing
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