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
Why our lender rates are increasing
We’re thrilled to announce that, as of Monday, our five-year lender rate is increasing to 5.5 per cent – the highest level it has reached since August 2016. So why are our rates on the rise? We have more lenders on our platform than ever, and our lenders are, on average, funding more into their Lending Works accounts than ever before too. However, the change has actually come on the other side of the equation - we are rapidly growing our loan origination volumes; or, simply put, more high-quality loan customers want to take out a loan with us.
Unlocking new channels of loan origination
For the past 24 months, we have focused intensively on two things: making our software better so customers are more likely to use Lending Works, and integrating with more partners through which customers can access our platform. As a result, we are approving vastly greater volumes of loans for creditworthy customers each day.
The nature of a platform like ours is such that the challenge of balancing the supply of lender capital with demand for loans from borrowers is an ongoing one, and fluctuations in rates tend to be indicative of the status quo of this equilibrium. We expect to issue over £5 million in loans this month for the first time ever. And, with a number of new partnerships set to launch in the coming months, we expect that figure to double to £10 million per month by mid-2018.
Smashing records; mitigating risks
However, in order for us to break new ground in this manner, we need a little bit of help from investors like you. Fortunately, the gains are mutually beneficial. Not only will you reap the rewards of our tremendous five-year returns, but your money will also be matched with creditworthy borrowers in just a few days (given the current shorter lending queue), so your money will start working for you almost immediately – and enable you to stay one step ahead of inflation (currently 2.9 per cent).
Of course, it's important to remember that peer-to-peer lending is not a savings product. Capital is at risk, and not protected by the Financial Services Compensation Scheme. In order to help mitigate these risks, we developed the Lending Works Shield; a threefold lender protection model which includes a unique insurance that covers some of the key reasons for borrowers defaulting, and a reserve fund to cover missed loan repayments.
Seize the day - grow your money with us
In short, there really has never been a better time to lend your money through our platform. At a time when savers are seeing their rainy-day funds eroded (in real terms), and investors are navigating stock market volatility, P2P offers a credible alternative which strikes a sweetspot between risk and reward that is hard to beat. The latest uptick in returns only underscores this further. Now is the time to get more bang for your buck, and Lending Works is the place to do it.
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.
With political parties jostling for position amid a series of Elections, and the ongoing spectre of a snap General Election looming large, the Labour Party put forward a policy last week which has proved to be a talking point: increasing the minimum wage to £10 per hour, and extending this to workers under the age of 18.
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.