Summary of a post.
P2P lending hits the £10 billion mark
Despite launching over 12 years ago, it’s fair to say that peer-to-peer lending isn’t on the radar of all British consumers.
“If you did an opinion poll, you’d still find the majority of people have never heard of P2P lending, so there’s still a big job to do,” said P2PFA chair Christine Farnish in a recent interview with P2P Finance News.
Yet while that may be true, it hasn’t stopped the sector powering ahead, and a significant milestone was reached last week, as the 10 billionth pound was lent via peer-to-peer lending in the UK. Such is the exponential upward curve of the industry’s growth that over £2bn was invested through P2P in H1 2017 alone, and all signs suggest that this trend is set to continue.
Intriguingly, it comes on the back of a challenging year in 2016, in which peer-to-peer lending had to contend with its share of negative press from some high-profile figures. In the same interview, Farnish suggested that this may have been at the behest of some incumbent, big-hitting institutions within the wider financial services sector in the UK, who were looking to “slow the whole thing down”.
The only way is up
Either way, it’s clear that such dissenting voices have been subdued since, and the industry’s positive momentum and thrust towards the mainstream have been underpinned by an increasing number of platforms receiving full FCA approval (Lending Works was the first among P2PFA members to gain this approval in October 2016), and, subsequently launching Innovative Finance ISAs.
It is this new type of ISA which is likely to have the greatest impact. Whether prospective investors have heard of P2P lending or not, all and sundry have become frustrated with the derisory rates of return on savings offered by high-street banks and building societies. And as inflation continues to rise, the need to look elsewhere for real returns will grow.
Although money invested via peer-to-peer lending platforms is not covered by the Financial Services Compensation Scheme if losses are incurred, there are significant safeguards in place, so it thus offers a midpoint in terms of risk and return between savings and stocks & shares. The fact that these returns can now be shielded from tax via the ISA will only strengthen P2P’s hand further, and draw many more consumers into the mix.
“Smashing the £10bn barrier represents tremendous progress for our sector, which is still relatively new,” commented Lending Works founder and CEO Nick Harding. “Performance both at company and industry level this year in particular has been very impressive, and the indications are that volumes will continue to soar as more and more people look to better their finances via the efficiencies and benefits peer-to-peer lending has to offer.
"We can’t afford to be complacent, as many people will need to see P2P function through a complete credit cycle before being completely convinced. It is thus up to us to continue to uphold the highest standards of loan underwriting and transparency, and rely on innovation to drive us forward.
"But certainly, this is an exciting time to be involved with the sector, and, as the IFISA era launches in earnest, we predict with a high degree of confidence that the best days very much lie ahead.”
Related articles:
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.
As with all investments, your capital is at risk.
- Summary of a post.
- Summary of a post.
- Summary of a post.
In line with our risk management framework, today we published our Q4 2019 performance update.
As a platform, we take great pride in all that we've achieved since opening our doors for business nearly six years ago. We’ve
Featured
Wednesday’s Budget speech, coupled with the cut to Bank of England rates, represented a decisive response to the coronavirus. Here we analyse the impact it will have on mitigating disruption from Covid-19, along with the long-term implications of this significant fiscal stimulus.
Rumblings from the Treasury ahead of next week's Budget suggest tax grabs will be needed to fund increased spending, and it appears UK enterprise could be in the firing line. Here we articulate why targeting entrepreneurs and small business is ill advised.
In a difficult climate, customer acquisition and lead generation present stern challenges for UK retailers, and a great deal of marketing spend invariably gets directed towards getting feet through the door.
There is a variety of literature and research illustrating the importance of building brand loyalty, albeit with some degree of variance.
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 idea of peer-to-peer (P2P) lending is a simple one; you lend money to those who wish to borrow, with a view to receiving a great return for doing so.
Most popular
- Summary of a post.
The 2019-20 ISA season has been a damp squib, with banks disinterested in attracting savers’ cash, rates cut, and the stock market in freefall. However, the emergence of the IFISA means alternatives beckon for those seeking a stable middle ground in terms of risk and reward.
In a decade of slow recovery, the rapid rise in asset prices has been the standout. But how sustainable has price growth been, and could we be in the midst of a bubble?
- Summary of a post.
Most people consider income tax to be a given, but in the UK it is barely two centuries old. In this article, we look at how this tax has developed over the years, and also why it is set to remain at the core of our tax system for many decades to come.
Open banking celebrated its second birthday last month, but has the ‘revolution for financial services’ that was promised actually come to pass? In this article, we look at the progress the initiative has made so far, and what the future holds in the face of high levels of scepticism.
Recent
The Lending Works Shield does not give you a right to a payment so you may not receive a pay-out even if you suffer loss. The Lending Works Trustee has absolute discretion as to the amount that may be paid, including making no payment at all. Therefore, investors should not rely on possible pay-outs from the Lending Works Shield when considering whether or how much to invest. For more information click here.