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​Peer to Peer ISAs

Find out more about Innovative Finance ISAs

Investment ISAs put your capital at risk & you may get back less than you originally invested

Classic Innovative Finance ISA (IFISA)

from easyMoney

ISA Option
Allows ISA Transfers
Interest Rate 3.08% annualised target return
  • Term: No Fixed Term
  • Invest From: £100
  • TAX-FREE Innovative Finance ISA
  • Minimum investment of £100
  • Secured by UK property
  • Maximum 75% loan to value
  • Buffer of 25% should the value of a property fall
  • Invest over £1,000 and you will automatically become an easyMoney plus card member, offering savings at over 1.000 of Britain’s biggest retailers
  • Also accepts ISA transfers from previous year's ISA's
  • Interest paid monthly
  • No fixed term, hold for as long as you wish
  • Can also be held outside of an ISA
  • As with all investing your capital is at risk when you lend to businesses. easyMoney reduces this risk by taking security over property
  • Returns are not guaranteed and your actual returns may vary
  • Capital is at risk
  • Must be aged 18 or older
  • Peer to peer lending is not covered by the FSCS

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

Premium Innovative Finance ISA (IFISA)

from easyMoney

ISA Option
Allows ISA Transfers
Interest Rate 4.03% annualised target return
  • Term: No Fixed Term
  • Invest From: £10,000
  • TAX-FREE Innovative Finance ISA
  • Minimum investment of £10,000
  • Secured by UK property
  • Maximum 75% loan to value
  • Significant buffer of 25% should the value of a property fall
  • Invest over £1,000 and you will automatically become an easyMoney plus card member, offering savings at over 1.000 of Britain’s biggest retailers
  • Also accepts ISA transfers from previous year's ISA's
  • Interest paid monthly
  • No fixed term, hold for as long as you wish
  • Can also be held outside of an ISA
  • As with all investing your capital is at risk when you lend to businesses. easyMoney reduces this risk by taking security over property
  • Returns are not guaranteed and your actual returns may vary
  • Capital is at risk
  • Must be aged 18 or older
  • Peer to peer lending is not covered by the FSCS

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

Premium Plus Innovative Finance ISA (IFISA)

from easyMoney

ISA Option
Allows ISA Transfers
Interest Rate 5.02% annualised target return
  • Term: No Fixed Term
  • Invest From: £20,000
  • TAX-FREE Innovative Finance ISA
  • Minimum investment of £20,000
  • Secured by UK property
  • Maximum 75% loan to value
  • Significant buffer of 25% should the value of a property fall
  • Invest over £1,000 and you will automatically become an easyMoney plus card member, offering savings at over 1.000 of Britain’s biggest retailers
  • Also accepts ISA transfers from previous year's ISA's
  • Interest paid monthly
  • No fixed term, hold for as long as you wish
  • Can also be held outside of an ISA
  • As with all investing your capital is at risk when you lend to businesses. easyMoney reduces this risk by taking security over property
  • Returns are not guaranteed and your actual returns may vary
  • Capital is at risk
  • Must be aged 18 or older
  • Peer to peer lending is not covered by the FSCS

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

High Net Worth Innovative Finance ISA (IFISA)

from easyMoney

ISA Option
Allows ISA Transfers
Interest Rate 6.01% annualised target return
  • Term: No Fixed Term
  • Invest From: £100,000
  • TAX-FREE Innovative Finance ISA
  • Minimum investment of £100,000
  • Secured by UK property
  • Maximum 75% loan to value
  • Significant buffer of 25% should the value of a property fall
  • Invest over £1,000 and you will automatically become an easyMoney plus card member, offering savings at over 1.000 of Britain’s biggest retailers
  • Also accepts ISA transfers from previous year's ISA's
  • Interest paid monthly
  • No fixed term, hold for as long as you wish
  • Can also be held outside of an ISA
  • As with all investing your capital is at risk when you lend to businesses. easyMoney reduces this risk by taking security over property
  • Returns are not guaranteed and your actual returns may vary
  • Capital is at risk
  • Must be aged 18 or older
  • Peer to peer lending is not covered by the FSCS

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

CROWD2FUND ISA

from CROWD2FUND

Allows ISA Transfers
Interest Rate Earn an estimated 8.70% APR
  • Term: 1-5 years
  • Protection Scheme: Own Scheme
  • Invest From: £10
  • Currently 0% platform default rate
  • Access to your capital
  • Balance your level of risk
  • Capital at risk

What is a Peer to Peer ISA?

A Peer to Peer (P2P) ISA is an ISA account you can hold Peer to Peer loan investments in.

They are also known as Innovative Finance ISAs or IFISAs.

The ISA wrapper protects you from paying tax on the interest that your P2P investments return, and your Peer to Peer investments have the potential to outperform standard Cash ISAs and savings accounts.

However, they come at an additional risk due to how Peer to Peer loan investments work.

How do Peer to Peer ISAs work?

Peer to Peer ISAs work in the same way as any other Peer to Peer investments, just with the added tax benefits of an ISA.

P2P investments lend your money to borrowers who pay it back with interest.

They are just like normal loans but without a bank acting as a middle man. This means you get more of the profits, but also accept more of the risk.

Peer to Peer investment products quote a target interest rate, which is the return rate they aim to meet over a specified time period.

The interest rate is not guaranteed like with a Cash ISA, but it will likely be considerably higher.

You could also lose your money if the borrowers of your P2P loan fail to repay their debts. Or, your money could be tied up for longer than you expect.

Here are some examples of the types of borrowers that your money will be lent to:

  • Individuals taking out personal loans for home improvements, medical costs or car purchases
  • Companies taking out business loans
  • Charities

What are the benefits of a Peer to Peer ISA?

  • Better interest rates than Cash ISAs and general savings accounts
  • 100% tax-free savings
  • No limit on how much you can withdraw
  • Invest up to £20,000 for the 2021/22 tax year

Can you lose money with Peer to Peer lending ISAs?

Yes, you can lose money investing in Peer to Peer lending products. Your money is loaned to different borrowers who may default on their repayments or take longer than expected to pay back their debts.

Although your P2P investment provider will aim to mitigate these risks, there is no guarantee you will get back at least what you invest.

Can you make money with Peer to Peer lending?

One of the main benefits of a Peer to Peer ISA is the potential returns on offer via the interest rates.

Compared to a Cash ISA, the interest rates available are much more attractive as long as you are comfortable with the higher risks involved.

What is the best Peer to Peer ISA?

The best P2P ISA for you will depend on some of the following factors:

  • The target interest rate
  • The length of investment term
  • The risk level associated
  • The provider’s customer service ratings
  • The minimum investment amount

Are Peer to Peer ISAs Safe?

Although your underlying Peer to Peer investments can lose money, the products are regulated and authorised by the Financial Conduct Authority (FCA).

This means that Peer to Peer ISAs must abide by rules and regulations set out by the FCA and treat customers fairly.

That being said, Peer to Peer lending ISAs are not covered by the Financial Services Compensation Scheme (FSCS), like other ISAs are.

The FSCS covers investors for up to £85,000 in the event that their investment provider goes into liquidation. It doesn’t cover the underlying ISA investments, but it does cover the ISA provider should it get into trouble. This is an added level of security that Peer to Peer ISAs don’t have.

What are some alternatives to Peer to Peer ISAs?

The main alternatives to P2P lending ISAs are the other types of ISAs available, as you get the same tax benefits with all these accounts:

Cash ISAs

  • Guaranteed or variable interest rates
  • Your money cannot go down
  • Interest rates are much lower

Stocks and Shares ISAs

  • Invest in the stock market via funds, shares and other investment vehicles
  • Value can go up as well as down
  • Suits long term investments

Junior ISAs (JISAs)

  • Opened in the name of a child
  • Can be held as a Cash JISA or Stocks and Shares JISA
  • Invest up to £4,000 per child in the current tax year

Lifetime ISAs (LISAs)

  • 25% free government bonus (kept if used for a first house deposit or at age 60)
  • 25% charge for withdrawals outside of these rules
  • Can be held as a Cash LISA or Stocks and Shares LISA
  • Invest up to £4,000 per tax year

How do I open a Peer to Peer ISA account?

The easiest way to open a P2P ISA is online or via the mobile app for your P2P ISA provider. You can also open an account over the telephone or by post, and you will need to make a contribution via debit card or Direct Debit.

FAQs

Do Peer to Peer ISAs provide guaranteed interest rates?

P2P loan investments provide a target interest rate and don’t guarantee a specific rate of return.

Your investment comes with the risk that the interest rates could be lower, and you could even get back less than you originally invest.

Are P2P ISAs high risk?

Peer to Peer lending ISAs are classed as high-risk investments as you could lose 100% of your money if your loan performs very badly. If the borrowers on the other side of your loan miss their repayments, then it will affect your investment.

Can I withdraw from a Peer to Peer ISA?

Yes, you can withdraw from a P2P ISA at any time but you will need to liquidate your P2P investments before you do so.

How long do withdrawals from P2P lending ISAs take?

Most withdrawals take no longer than 30 days assuming your loan is doing well. However, you should prepare for the possibility that a withdrawal could take longer than this.

How much money can I put into a P2P ISA?

You can add up to £20,000 to a Peer to Peer ISA in the 2021/22 tax year, up until the deadline of 5th April 2022. At this point, your allowance refreshes for the new tax year.

Do I pay tax when I withdraw from a Peer to Peer ISA?

No, your withdrawals are completely tax-free from a P2P ISA.

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Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

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