P2P Investing

I'm invested in my Unions credit union. Rate of return has been reasonable - comparable to high street banks. That not the main reason why I'm invested though.
 
I'm in with Zopa. If I need it urgently I think there is a 1% or 2% hit. Still worked out better than putting it in for say 3 years and taking the same penalty.
 
Next year (ie tax year) the P2P ISA should be launched

i think the whole marketplace will potentially change at that point.

Details still seem sketchy but I think its likely to give the P2P market the kick it needs to go more mainstream.

Could be a serious challenge to the banks. Eg mortgages, people investing for the long term would probably be happy to lend against mortgages, although atm i think the interest rates are fixed so probably needs a new entrant to come along to mix it up a bit more
 
beh said:
From next year it'll be included in the £1000 (tax free) personal savings allowance. So unless you've got £20k+ most people won't need to bother with a P2P ISA.
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Thats true.

However most people with savings of any decent amount are more likely to be higher rate taxpayers, so its £500 not £1000. Thats not a lot really, especially when you factor in that interest rates will revert to a more sensible level at some point.

Eg a higher rate taxpayer would only need £12,500 invested at 4% to earn the £500 interest. Thats less than one years ISA allowance.

Also an ISA is literally just a tax free wrapper, with allowances that do not rollover. If you have the ability to put money into an ISA that will function exactly the same as outside then you would be daft not to. Tax policies come and go so its just as likely that the tax free savings allowance could be dropped by a new chancellor. It less likely that some kind of tax benefit would be removed completely such as TESSA/ISA because successive governments have been trying to encourage us to save. The £1000 allowance is IMO just to cut down on paperwork, otherwise why cap at such a low insignificant amount.
 
Mercenary Keyboard Warrior said:
Also an ISA is literally just a tax free wrapper, with allowances that do not rollover.
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ISAs are a complete for most people. They are OK if you are a high rate taxpayer. But more often than not when I shop around for savings I find that the best deals are better than ISAs even after deducting tax.

On rare occasions ISAs are the best deal - but rare.
 
Golf1.6 said:
has there ever been defaults with zopa? Im sure somebody must default and then you lose your investment i presume?
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Yes, I've had a handful of defaults. But you never lend more than £10 to any single individual and so your risk exposure is limited.
 
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