Over the last 20 years, the FTSE 100 index has barely moved. It is true that UK equities have a relatively high yield compared to other markets, but when one takes into account fund management fees and inflation, investors' capital has not appreciated at all. Older investors are generally looking for income and those UK stocks that yielded the most at the beginning of the millennium tended to perform poorly. The banks were hit by the banking crisis and the oil sector saw a collapse in profits when the oil price declined sharply.Many investors responded to the weakness in the equity market by investing in Cash ISAs, but the average yield is only 1per cent and many of the high street banks are only offering rates of 0.5 per cent. With inflation running at 2.1 per cent, clients are losing money in real terms. For those looking for yield, P2P business loans, responsibly originated with proper security, offer a very attractive investment opportunity.
It is no surprise that lenders may be feeling cautious about the P2P sector following the recent failure of the Lendy platform, but we would urge risk-aware inevstors to look at two products that could be of particular interest: the Money&Co. Managed Innovative Finance ISA and the Money&Co. Inheritance Tax Service. The latter takes advantage of Business Relief and allows investors to create an IHT shelter ahead of downsizing residential property or selling a business.