What is peer to peer lending
Peer to peer lending (P2P) is a way in which savers can lend their capital to the borrowers; by doing this they are effectively removing the middle man (a bank) as well as potentially receiving a higher return on their investment.
Typically, the interest offered with P2P lending is higher than those found in the high street. Some companies that offer P2P lending and borrower services provide the choice to lend for a single year or a number of years; the longer the term of lending, the higher the potential return.
It should be noted that the return of the capital that you invested will depend heavily on the borrower, and, in some cases, it is possible to lose some or all of the capital initially provided.
Why use peer to peer lending ISA
Any returns that you receive on a regular investment will be subject to tax, which could significantly reduce your overall return.
An ISA gives you the chance to earn up to £20,000 tax-free interest, which means it could lend itself perfectly to an investment such as peer to peer lending.
Peer to peer lending ISAs allow savers to put their peer to peer investments in a tax-efficient wrapper so they can achieve tax-free returns on the interest earned from their investment.
Peer to peer lending ISAs are their own type of ISA. Therefore, savers can subscribe to another kind of ISA as well. However, if you decide to open multiple ISAs, it is important to remember to break up your allowance between the accounts so you do not exceed it.
Eligibility
In order to be eligible for a peer to peer lending ISA you need to be:
- Aged 18 years or over
- A UK resident and tax payer
Our peer to peer lending ISA services
Unless you have a deep understanding of the financial services market, you may need some assistance when choosing a peer to peer lending ISA.
Call us on 0845 308 2525 or fill in our contact form.
Important Risk Information:
This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.
Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.
Lifetime ISAs
Save for your first home and retirement
Compare Lifetime ISAs
Junior ISAs
Invest for your child’s future
Compare Junior ISAs:
Stocks & Shares ISAs
Invest tax-free in stocks and shares
Compare Stocks and Shares ISAs:
Latest News
5 Considerations for Your Next Investment ISA
15th March 2021
You've decided to invest your savings into a Stocks and Shares ISA. You'll be using your tax-free ISA allowance for this year before the deadline, while also investing your money for your future. But what do you need to consider before opening an account? We've put together a list of our top five considerations for you to think about before you click "apply".
Newsletter Signup
Sign up to our Newsletter to get exclusive news and offers direct to your inbox.
About us
ISA.co.uk is a trading style of Fair Investment Company.
We've been comparing and recommending ISAs for many years so you can trust you're in good hands.
About usI found the way the different options are presented very clear - much more useful than some other comparison sites. I sent it to my daughter as well.
Very informative, find myself a good ISA account with best return in terms of interest.
Easy to use website and up to date. Saved the link on my tablet.
The website was very useful and informative.
ISA can be confusing at first and this site includes a useful and helpful introduction into the world of ISAs