In line with our risk management framework, today we published our Q4 2019 performance update.
Record-breaking first half for Lending Works!
As we reach the halfway point of a frenetic 2015 we’ve found a bit of time to reflect on our progress, and indulged in the occasional smile between us as a result! It’s almost 18 months ago to the day that Lending Works officially launched, and just under £5 million in loans over the first year provided an excellent launchpad.
However, we were confident that the first half of 2015 would see us kick on from there, especially in light of the pension freedoms which came into effect on 6 April. Liberating the retirement pots of those aged 55 or older was always likely to expose peer-to-peer lending to a new realm of investment capital, and in early April we thus launched a four-pronged strategy to attract these later-life lenders – including a special cash bonus, dedicated and named customer advisors, our Retirement Income Calculator and the Auto Income tool. The results that followed exceeded even our expectations!
Cracking the pensions market
The total amount lent to borrowers doubled to over £10 million in the first half of this year, and it was the significant increase in lender funds from over 55s which played a major role. Prior to 6 April, around 35% of lending capital came from this age group. However, more than 70% of new funds since this date have come from these ‘silver lenders’.
That’s not to say that younger lenders have been crowded out. In fact, total lending capital from those aged 18-55 has increased steadily month on month. But it is the upward trend of lending capital from retirees (or those nearing retirement) that backs up what many had suspected: the pension reforms are a significant boost for peer-to-peer lending.
A flexible alternative to annuities
Aside from declining returns, the inflexibility of annuities made them increasingly unappealing. This is partly what inspired the development of our Auto Income tool, which allows lenders to take their repayments from borrowers (be that interest and capital, or interest only) as an income direct to their bank account.
Since its launch in the second week of April, 76% of new lenders over the age of 55 are making use of this income device, while more than a quarter of pre-existing lenders in this age bracket have adopted it. Such statistics underline the attractiveness of a more-flexible investment that allows lenders to enjoy great returns without having to wholly lock their capital away, and is an important reason for P2P’s emergence as an alternative to an annuity.
As it stands, more than 53% of our lenders are of a pensionable age, with the oldest being a remarkable 90-years old. That said, we continue to be encouraged by the growth in the number of younger lenders joining the platform too, and are currently developing further initiatives for these markets.
Furthermore, we have seen strong and sustained growth in the number of creditworthy borrowers coming to our platform. Intriguingly, less than a quarter cite debt consolidation as the reason for taking a loan with us. Instead, capital from our lenders is funding new cars, dream family holidays, value-adding home improvements, weddings and once-in-a-lifetime gifts for loved ones.
On the up and up!
It all leaves us in a position of strength going into the second half of 2015, and puts us well on course to achieve our target of facilitating £25 million in loans by the end of the year.
Reflecting on Lending Works’ continued success, our co-founder and CEO Nick had this to say:
“We are now lending up to £150,000 a day to borrowers – a figure that exceeds all expectations for this stage in our development, and one that only looks set to grow. This tells us that our customers like what we’re doing; but more than that, it proves how peer-to-peer lending is moving into the mainstream more than ever. The ‘alternative’ in ‘alternative finance’ is starting to look redundant.
“The sheer diversity of both our lender and borrower groups never fails to astonish me. Our lenders span an incredible 73-year age bracket, and our borrowers aren’t just taking loans to consolidate their debts, but to make life-changing purchases or pay for those once-in-a-lifetime opportunities.
“As we grow we will continue to invest in our team – the engine behind everything that Lending Works is – and I look forward to welcoming new colleagues, advisors, directors and investors over the coming months.”
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.
Since opening our doors back in 2014, we’ve always prided ourselves on living and breathing two key principles at Lending Works: innovation, and putting the customer first in everything we do.
With the retail sector enduring its fair share of challenges, companies are looking at new ways to attract customers, and drive conversion. In an overcrowded, dog-eat-dog marketplace, with behemoths such as Amazon flexing their muscle, it’s easier said than done.
On 4 June 2019, the Financial Conduct Authority (FCA) released its new regulatory framework for peer-to-peer lending (P2P); a Policy Statement known as PS19/14. As you might imagine, it's a document which, following a three-month consultation, is a hefty read of no fewer than 102 pages.
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.
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 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?
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.
On the face of it, a 'broken' energy market needed fixing, and the price caps introduced in early 2019 were heralded as the solution. But, one year later, have they actually helped consumers save?