Peer to peer

Quick guide to the Lending Works Shield

Leading lending protection

Our number one priority at Lending Works is earning and maintaining the trust and confidence of our customers and, within that, protecting your money. Lending Works offers extra protection to our lenders which includes the Lending Works Shield

What does the Lending Works Shield protect lenders against?

We protect our lenders from both the specific and systemic risks posed by borrowers including missed repayments and defaults. Specifically, we protect against the following risks:

Missed payments and borrower defaults

Our lenders are protected from the risk of missed payments and borrower defaults, whatever the reason. Whether small numbers of borrowers default because of isolated unemployment or illness, or large numbers of borrowers default because of systemic economic issues such as a recession or financial market crash, our lenders are protected.

Fraudulent applications

Our fraud prevention systems combine the knowledge of a broad group of industry experts, including identity verification consultants who advise the government, credit reference agency experts and CIFAS who are the UK’s leading fraud prevention agency. 


Our system has been designed and built by technology experts who work with both the government and private sector. Our technology and security systems have been designed and tested to protect our customers’ data and to protect against breaches of our internal systems. 

How does it work?

The level of protection we provide to our lenders is threefold. The first is a set of heavily scrutinised processes and policies that we use every single day: the underwriting process. The second is a company structure that is specifically designed to protect our lenders: the Ring-Fenced Trust. The third, and most significant, is our Lending Works Shield, consisting of a contingency fund which protects against risks including missed payments and borrower defaults.

1. Meticulous underwriting

Our team is comprised of financial services industry experts who ensure that only the most eligible borrowers are approved, utilising the most effective underwriting techniques including:

Equifax credit check - to check credit files
Affordability check - we check income, outgoings, bank accounts and debt
Identity check – we use sophisticated software to verify identities
CIFAS check - we check each borrower against the national CIFAS register to help prevent fraud

2. Ring-fenced Trust

Lenders’ money is held within a Trust which is administered by a not-for-profit company. All funds held within this Trust are ring-fenced from the day-to-day operations of Lending Works in a segregated client bank account. The Trust has an agreement with a back-up services provider who, irrespective of the status of Lending Works, will manage the Trust, collect the debts due and return all money due to our lenders.

3. The Lending Works Shield

The Shield is a feature designed to provide protection to our lenders. It consists of a contingency fund which is held within the ring-fenced Trust. This protects against missed and late payments and ensures lenders receive their expected returns. The contingency fund is constantly growing as a portion of the arrangement fee and interest payable by each of our borrowers. Our expected loss rate determines the amount of money reserved in the Shield, and we build in a healthy degree of prudence in our models. However, please note that the interest rates retail investors receive on loans from the Shield are variable, to account for variations in the performance of the loan portfolio.

Lending Works is authorised and regulated by the Financial Conduct Authority but is not a bank, and so the Lending Works Shield is not part of the Financial Services Compensation Scheme (FSCS). The Lending Works Shield is also not an insurance product offered directly to lenders.


In summary, we understand that earning and maintaining the trust and confidence of our customers is fundamental, which is why we have gone to such great lengths to protect our customers. We believe that we should do all of the hard work, so you don’t have to. Instead, you can benefit from our great returns with protection.

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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.