If FinTech is the future of finance – we would argue it’s already the vivid present – then projects like the one reported below are to be welcomed. Private-sector and government partnerships have a somewhat patchy history (bounceback loans (a good idea), for example, are set to bring chaos over the coming months and years). It would be great if this environmental project, reported by our friends at Finextra, can be made to work.
Revolut, Starling and Wise are among a host of UK fintechs to join a new ‘Tech Zero’ taskforce to tackle climate change.
Led by green energy supplier Bulb, the taskforce has set itself the aim of accelerating the UK government’s plan to reach net zero emissions by 2050.
Fintechs GoCardless, Moneysupermarket Group and Onfido have joined as founding members of the taskforce, which is backed by Tech Nation and the UK’s Net Zero business champion, Andrew Griffith MP.
The group says it plans to set “ambitious, but achievable” emission targets and to help the UK become the top destination for green investment while also helping consumers make greener choices.
While the taskforce has only 15 founder members, it has set itself a target of bringing at least 1000 British tech firms onboard ahead of the COP26 UN Climate Conference later this year.
Historical Performance And IFISA Process Guide
That figure is the result of over £20 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.