Looking after your money

The Lending Works Shield goes the extra mile to help protect you from missed loan repayments and defaults using a combination of our unique insurance and our reserve fund.

The shield in details

The Lending Works Shield does not provide a guarantee against investment losses and does not remove the repayment obligations of borrowers, which remain due and recoverable by Lending Works.

Please note, the Shield only covers loans by individual investors, not institutions.

As with all forms of investment, your capital is at risk. We are not covered by the Financial Services Compensation Scheme (FSCS).

The Shield in detail


At the core of our Shield is our unique insurance. We’ve gone to great lengths to find the best possible partners to help safeguard your money. Our insurance - the first of its kind in peer-to-peer lending - is backed by three of the largest UK insurers, each with a balance sheet of more than £2bn. These insurers are classified as A and B-rated and are regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

Loss of employment 

Covering both small numbers of borrowers defaulting because of isolated unemployment issues, and large numbers defaulting due to systemic economic problems such as a recession.

Accident and sickness 

Covering missed payments arising from unforeseen circumstances such as accidents or long-term sickness, where the borrower may be unable to meet their ongoing loan repayments.


Whilst unfortunate, these things can happen. Our insurance ensures our lenders are covered.

Reserve fund

Our reserve fund, the second layer of our Shield, is held in cash within a segregated trust bank account with NatWest Bank, and is operated and administered by Lending Works Trustee Limited in accordance with the Lending Works Shield Trust Deed. Its primary purpose is to help ensure that you receive exactly what you’re expecting - on time.

The reserve fund is topped up by Lending Works using a risk-weighted portion of the fees and interest payable by borrowers, and is maintained at a level sufficient to cover our expected rate of arrears and defaults.


We work extremely hard to ensure that the Shield is always able to protect you from losses on your loans, resulting in every payment of capital and interest being paid to lenders on time since we launched in 2014.

However, in the unlikely event that the Shield becomes depleted and is unable to continue to cover losses, the fact that your investment is diversified across many loans means the impact of any individual borrower not paying is greatly reduced. Furthermore, with Lending Works you'll be diversified to the maximum possible extent, as Lending Works Trustee Limited has the option to declare a “pooling event”, allowing future losses to be shared on a pro-rata basis between lenders participating in the pooling event. This is discussed further in section 19 of the Lender Platform Terms & Conditions.

Remember, past performance is not a reliable indicator of future performance, and your capital is at risk.

Other ways we protect you

Our Shield is underpinned by the following:

Our team of financial services experts make sure that only the most creditworthy borrowers are approved, utilising the most effective underwriting techniques including:

  • Credit checks - we perform multi-bureau credit assessments
  • Affordability checks – we assess income, outgoings and levels of debt
  • Identity checks - we use sophisticated software to verify borrower identity
  • Fraud checks – we use fraud prevention software and techniques, and are also a member of Cifas (leaders in fraud prevention)
We are required to hold all client money in a segregated client bank account with a credit institution. Your funds are held with NatWest Bank Plc. These funds are ring-fenced from Lending Works’ own funds and cannot be used for any other purpose.

In the unlikely event that the Lending Works platform were to fail or cease operating for any reason, including Lending Works becoming insolvent as a firm, responsibility for the management, servicing and collection of outstanding loans would be undertaken by a third-party back-up service provider with whom we have in place a back-up servicing arrangement.

Lending Works has appointed Link Financial Outsourcing Limited as its back-up service provider. Further details of this arrangement can be found in section 27 of our Lender Platform Terms & Conditions.