Consider this, from P2P Finance News:ISA SAVERS will have to earn a minimum annual return of 1.84 per cent in order to ensure that their savings can keep up with the rate of inflation, according to a new study by Assetz Capital.On the one hand, we like the sentiment: we're keen to promote benefits of P2P investing – providing lenders are mindful of risk (see warnings on our Home page, in FAQs, the foot of this page and in almost every News article published here in the last four-and-a-half years). On the other, we worry about characterising a statement of the blatantly obvious as "research".Here's our "research" based on the quickest of internet scrapes of the Office for National Statistics website.
The Consumer Prices Index including owner occupiers' housing costs (CPIH) 12-month inflation rate was 1.8% in January 2019, down from 2.0% in December 2018.
The arithmetic isn't difficult. Money&Co. lenders have achieved an average return of over 8 per cent before our charge of one per cent in the nearly five years of loan facilitation on the platform. There have been some restructurings and a small incidence of bad debt (well below the one per cent bottom-line provision in pre-launch planning). The upshot is simple enough: inflation is just under two per cent, and most lenders, especially those who spread their investment and diversified risk (See Lend and FAQs for text and video on this), have seen the return on capital handsomely outperform inflation.Again, we should point out that lenders should look at and absorb our narratives on risk before committing capital.
A Process Guide To Innovative Finance ISA InvestmentMoney&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). That figure is the result of almost £15 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:
Risk: Security, Access, YieldDo 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