When it comes to investing, there are numerous questions that need to be asked, and lots of things which need to be properly understood before committing your hard-earned money
Case Study: Meet Pamela, one of our lenders
Pamela is 59-years old, married, and lives in Woking, Surrey. She has enjoyed a long and successful career as a Human Resources Manager, although is very much looking forward to her retirement years. At this stage, Pamela plans to retire at the age of 60, and, as a keen traveler, she’s most excited about realising her dream of touring the world.
Pamela’s views on money, risk and the online platform
Pamela has been with Lending Works since January 2015, and has lent out a total of £21,000 through the company thus far. Although she’s had no prior experience with peer-to-peer lending (P2P), she has always been comfortable with using online platforms to manage her money.
“I find managing my money online to be the easiest way as I can access my accounts at a time that is convenient for me,” she commented. “Some sites are easier to use than others, but this is still my preferred option.”
Retirement has always been the end goal of her savings plan, and Pamela believes she has consistently been willing to take on a degree of risk in order to maximise her retirement income.
“I take calculated risks by ensuring I research before committing. I’m prepared to accept a small risk in order to get a better return for my money. Only very occasionally does money keep me awake at night, and usually only if large amounts are concerned. In general though, my view is that there are more important things in life.”
Pamela the peer-to-peer lender
It is in the last 18 months that P2P lending has really made its presence felt in the UK, with the industry now valued at around £3 billion. Like many, Pamela was previously unfamiliar with the concept, but having seen the returns her husband (a P2P lender of 3 years) had earned, her curiosity was piqued.
“My partner has been investing in P2P for some time, so he explained everything to me and advised me how to get started. I was happy to take his advice and learn from his first hand-experiences,” she said.
“I wanted to do something worthwhile with my money. It has been less beneficial to save with the banks for some time and I already have a number of other investments, so trying a new opportunity that offered attractive rates was a big pull for me.
“I haven’t encountered any drawbacks so far. I actually found the process incredibly easy, and would recommend anyone to look into trying it for themselves,” Pamela added.
Pamela’s other investment
While age is perceived as an important element in the profile of an early adopter, Pamela has always been keen to look at new ways of diversifying her portfolio.
“I have savings and investments across various different options in order to both spread any risk and maximise the return,” she noted. “I also have some that are accessible if needed and others that are invested with a longer-term view. P2P is unique so cannot really be compared to other types of savings and investments, but for me it was an exciting new venture.”
Pamela’s views on the pension reforms
Like many soon-to-be pensioners, Pamela kept a close eye on developments concerning April's pension reforms. It’s a matter that has polarised opinion in some quarters, but the 59-year old believes the increased degree of control she now has will give her a wonderful chance to make her money go further during her golden years.
“To me, pension freedoms mean being able to manage my finances to achieve maximum return on my investments, and I’m delighted that this new set of rules has come into effect in time for my retirement,” Pamela explained. “I believe that annuities still have their place, but I think it’s great that pensioners will now have a whole new set of choices at their disposal.
“P2P and investments will be an important source of income for me when I retire,” she continued. “I intend to use the flexible options regarding taking my pension, and continue to manage my investments so that I can maximise my retirement income.
“I just hope it will be enough so that I can visit all those places in the world that I’ve always wanted to see!”
Get email updates for future blogs:
Our website offers information about saving, investing, tax and other financial matters, but not personal advice. If you're not sure whether peer-to-peer lending is right for you, please seek independent financial advice, and if you decide to invest with Lending Works, please read our Key Lender Information PDF first.
For all the resilience the UK economy has shown, there is no doubt that this year's ISA season is set against a backdrop of uncertainty. Whatever the pros and cons, Brexit, and a lack of clarity on what our future economic relationship with the EU will look like, has left us at a crossroads.
The Lifetime ISA (LISA), announced in 2016, would prove to be one of George Osborne’s last flagship gestures to UK savers and investors as Chancellor, eventually launching against a backdrop of anti-climax a year later in April 2017.
As the tax year end approaches, the financial services industry readies itself for a flurry of activity. That's in large part because, with just a couple of months to go, the so-called 'ISA season' is upon us.
Over the last decade, there can be little dispute that the reputation of mainstream banks – and particularly the so-called ‘Big Four’ (HSBC, Barclays, Lloyds and RBS) – is at its lowest ebb.
The peer-to-peer (P2P) lending industry is now regulated by the Financial Conduct Authority (FCA). The regulatory framework has been designed to protect customers and promote effective competition.
Loan underwriting is the process that we undertake to analyse all of the information provided by each loan applicant and their credit file to assess whether or not that applicant meets our minimum loan criteria. As part of that process all data is verified, analysed and summarised to paint a picture of each applicant.
When you earn interest from a regular bank savings account, for example, the bank automatically deducts basic rate tax (currently 20%) before paying your interest. With interest earned from peer-to-peer lending, tax is not deducted automatically so lenders will need to declare their income to HMRC.
The starting gun has been fired to seek out Mark Carney's successor as Governor of the Bank of England (BoE), but he will nevertheless remain in his post until January 2020.
The vexing issue of social care, set against a backdrop of an ageing population trying to sustain itself, refuses to go away, and policy ideas invariably prove divisive.
On a daily basis, diligent readers of financial publications consume a wide range of economic data, which act as key performance indicators regarding the state of the UK economy.