Since the cash ISA limit increased to £15,000 in June 2014, the government has confirmed of its plans to drastically change ISAs yet again to include peer-to-peer loans and increase the limit once again to £15,240.
From April 2016, peer-to-peer loans can be held in an “Innovative Finance Isa”, where firms such as Zopa, Rate Setter and Funding Circle allow savers to lend money to businesses and people at rates they choose. This peer-to-peer lending cuts out the middle man, therefore allowing higher returns.
The chair of the P2PFA, Christine Farnish, stated “the creation of the innovative finance Isa will encourage more people to benefit from the fair deal that P2P lenders offer without getting confused between stocks and shares, P2P lending or cash savings”.
For Rhydian Lewis, the founder borrowing and peer-to-peer saving website RateSetter has said that allowing peer-to-peer investments to be put into an Isa, will “offer a much needed middle ground between low-yield cash and high-risk stocks and shares investments.”
Hargreaves Lansdown has already confirmed that it plans to offer an Isa with peer-to-peer loans.
For more information on ISAs and the offers currently held at different brokers, click here.