Tag: IFISA

ArchOver launches Innovative Finance ISA to UK investors

Author
Angus Dent
Date

The ArchOver IFISA provides tax-free P2P lending service to increase investor ROI

London, UK – 25 May 2018 – ArchOver, the peer-to-peer (P2P) business lending platform, is helping British investors make the most of their annual tax-free allowance with the launch of its Innovative Finance ISA (IFISA). ArchOver’s IFISA service offers investors premium credit control and security, proven by ArchOver’s no-loss rate. It allows investors to invest directly in successful businesses, earning tax-free interest of up to 10% p.a. – far more than the average return on a cash ISA.

“We are excited to be launching our IFISA, a significant new string to our bow which will help our Lenders to really make the most of the attractive rates we have on offer”, said Ian Anderson, COO of ArchOver. “Our goal is always to work to our lenders’ and borrowers’ needs and provide them with the best service possible. Existing lenders will be able to plug straight into the IFISA without needing to re-register, and new lenders will find the platform simple and easy to use.

“This launch is an important part of the ArchOver story, as we continue to build an industry-leading investment platform that combines the best security with highly competitive interest rates.”

The UK government introduced the IFISA in April 2016. It allows investors to earn interest on peer-to-peer investments without having to pay tax on their earnings. According to recent research by ArchOver, the service is proving popular: over half (54%) of UK investors would put their cash into an IFISA if they had the money available, with nearly two thirds (63%) recognising that it would offer a higher return on their savings.

CEO Angus Dent commented: “There’s a strong market out there for the IFISA, and we’re excited to get stuck in. Potential investors do need to be aware that the IFISA doesn’t work like a cash ISA, – investment capital is always at risk – so it is essential that you work with a trusted and established partner.

“With our proven history of strong credit analysis and managing loans with extremely low default rates, we’re well placed to help people invest wisely and get the yield that they want on their cash.”

The ArchOver IFISA is now available to all existing and new lenders. Users will be able to invest their ISA allowance in all of the projects on the ArchOver platform, earning tax-free interest with a minimum investment of £1,000. Investors can choose from a range of security types depending on their needs, including investment models that provide protection measures like credit insurance, dispute resolution, controlled accounts and all-assets charges with Companies House.

The launch of the ArchOver IFISA comes after a strong twelve months for the company, including the launch of the P2P industry’s first R&D Advance loan for claims greater than £100,000. ArchOver is backed by the Hampden Group, and recently celebrated the milestone of £65 million total funding facilitated. The new service broadens its lender offering, cementing its position as the leading choice for investor security and control.

Majority of savers misunderstand benefits of IFISAs

Author
Angus Dent
Date

61% of UK savers acknowledge possibility of higher returns and better interest rates with Innovative Finance ISAs (“IFISA”), but majority still don’t understand the service

London, UK – 2 May 2018 – Over a third (36%) of UK savers would place their money in an IFISA if they had the money available. The question is, what does the industry need to do to gain the trust of the undecided two thirds?

While a large proportion acknowledge the prospect of higher returns (61%) alongside the allure of the tax-free wrapper and greater diversification, the IFISA is still a hard sell, according to research undertaken by P2P lending service ArchOver. In truth, the majority of UK savers (57%) still don’t fully understand the service. Unlike cash ISAs, money invested in an IFISA is not protected under the Financial Services Compensation Scheme. As such, savers need to be confident in the strength and stability of the underlying businesses they are investing in. They must seek out lending schemes that provide deep insight into borrowers as well as all robust processes and security.

IFISAs present a greater risk when compared to a standard cash ISA, but the potential reward is exponentially higher. ArchOver CEO Angus Dent explains, “IFISAs are fundamentally different to cash ISAs in the way they operate. Meeting investors’ expectations and making them feel secure at the same time will require ongoing education. Our research shows that nearly half (48%) of savers are nervous about losing their money, so the industry needs to communicate the benefits and safeguards clearly”.

“The IFISA gives you the freedom and flexibility to choose your own investment. Investors must use that power to choose an option which combines the best elements of P2P lending: thorough due diligence, rigorous lender security and favourable returns. They must do their research to gain insight into the companies they’re investing in and should not ignore the job of diversifying their portfolio to balance out their risk.”

Over a quarter (26%) of savers say they are reassured by regulatory oversight such as the Financial Conduct Authority’s (FCA) recent approval of a number of P2P providers, including ArchOver. Dent reassures concerned savers, saying that “although IFISAs have an associated risk like all investments, investors and savers can get a greater level comfort by choosing a P2P platform that carries out stringent due diligence and credit analysis of all potential borrowers”.

“Now is a crucial time for the sector to raise awareness around IFISAs and how they work. We must make sure that investors and savers have all the information they need when looking at IFISA options. Ultimately, we need to remember why P2P was created in the first place – to offer more choice and transparency when participating in project-by-project lending”, concludes Dent.