Looking after your money

The Lending Works Shield goes the extra mile to help protect your returns from the impact of missed loan repayments and defaults, using a combination of our reserve fund and insurance against some of the common reasons for delinquent loans. The purpose of the Shield is to mitigate the impact of losses on your individual portfolio by spreading the risk across our entire loan book.

The shield in details

The Lending Works Shield does not provide a guarantee against investment losses and does not remove the repayment obligations of borrowers, which remain due and recoverable by Lending Works.

Please note, the Shield only covers loans by individual investors, not institutions.

As with all investments, your capital is at risk. Peer-to-peer investments are not covered by the Financial Services Compensation Scheme (FSCS).

The Shield in detail


We've taken out a series of insurance policies to help cover some of the leading causes of delinquent loans - loss of employment, accident and sickness, and death.

Loss of employment 

Our loss of employment cover helps protect against both small numbers of borrowers defaulting due to isolated unemployment issues, and large numbers defaulting due to systemic economic problems such as a recession.

Accident and sickness 

Our accident and sickness cover helps protect against missed payments arising from unforeseen ill health, providing welcome support to the borrower and mitigating risk for the investor.


Whilst unfortunate, these things can happen. Our life cover helps protect against defaults arising from deceased borrowers.

Reserve fund

Our reserve fund is held in cash within a segregated trust bank account with National Westminster Bank plc, and is operated and administered by Lending Works Trustee Limited in accordance with the Lending Works Shield Trust Deed. Its primary purpose is to help protect your returns from missed payments and defaults.

The reserve fund is topped up by Lending Works using a risk-weighted portion of the fees and interest payable by borrowers, and is targeted to remain at a level sufficient to cover our expected losses.


We work extremely hard to ensure that the Shield is always able to protect you from losses on your loans, resulting in every payment of capital and interest being paid to lenders on time since we launched in 2014.

However, in the unlikely event that the Shield becomes depleted and is unable to continue to cover losses, the fact that your investment is diversified across many loans means the impact of any individual borrower not paying is greatly reduced. Furthermore, with Lending Works you'll be diversified to the maximum possible extent, as Lending Works Trustee Limited has the option to declare a “pooling event”, allowing future losses to be shared on a pro-rata basis between lenders participating in the pooling event. This is discussed further in section 19 of the Lender Platform Terms & Conditions.

Remember, past performance is not a reliable indicator of future performance, and your capital is at risk.

Other ways we protect you

Our Shield is underpinned by the following:

Our team of financial services experts make sure that only the most creditworthy borrowers are approved, utilising the most effective underwriting techniques including:

  • Credit checks - we perform multi-bureau credit assessments
  • Affordability checks – we assess income, outgoings and levels of debt
  • Identity checks - we use sophisticated software to verify borrower identity
  • Fraud checks – we use fraud prevention software and techniques, and are also a member of Cifas (leaders in fraud prevention)
We are required to hold all client money in a segregated client bank account with a credit institution. Your funds are held with NatWest Bank Plc. These funds are ring-fenced from Lending Works’ own funds and cannot be used for any other purpose.

In the unlikely event that the Lending Works platform were to fail or cease operating for any reason, including Lending Works becoming insolvent as a firm, responsibility for the management, servicing and collection of outstanding loans would be undertaken by a third-party back-up service provider with whom we have in place a back-up servicing arrangement.

Lending Works has appointed Target Servicing Limited as its back-up service provider. Further details of this arrangement can be found in section 28 of our Lender Platform Terms & Conditions.