The government has just published its ‘Ways to Save in 2017’ infographic. Despite being designed to inform consumers about ISA’s and other savings options, there is no mention of the Innovative Finance ISA (IF ISA).
The infographic highlights several ISA products, including the cash ISA and the arguably riskier Stock and Shares ISA, and yet the IF ISA is notably absent. Sitting alongside these two products, the IF ISA protects savers’ returns from income tax and capital gains tax in the same way. It is for this reason its omission is so baffling; perhaps signalling that there is still a significant lack of understanding from the treasury about the potential benefits peer-to-peer lending could deliver to savers.
Government has yet to understand the savings potential P2P lending could provide
Stephen Findlay, CEO of direct lending platform BondMason notes; “Whilst I appreciate the government’s effort in communicating different savings options to consumers, the notable omission of the IF ISA indicates that the powers-that-be at the Treasury haven't fully embraced, or yet understood, the savings potential that can be delivered from carefully managed P2P Lending portfolios.”
The government launched the IF ISA in April 2016, enabling savers using direct lending platforms to receive tax free interest on their returns. The IF ISA has a higher risk profile and is not currently protected by the Financial Services Compensation Scheme however, it potentially offers savers significantly higher returns than available through the Cash ISA’s provided by traditional banks or building societies.
As Cash ISA rates continue to fall, by omitting the IF ISA from its ‘Ways to save in 2017’ the government has both missed an opportunity and fallen short in its objective to provide UK consumers with a complete picture of all the savings options open to them.
BondMason is the UK's number one direct lending platform exclusively for investors, sourcing and filtering the very best lending opportunities from across the entire UK direct lending and P2P market.BondMason is in the process of refining the structure of its own Innovative Finance ISA. For further information and to pre-register your interest simply click on the link below to email your details.
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