This piece on our CEO in The Mail on Sunday needs little further explanation from us. We run a couple of short extracts below.
Former fund manager Nicola Horlick stopped investing in shares just before the credit crunch hit in 2007 and has not put a penny into the stock market since.
Horlick, 58, currently standing for Parliament as the Liberal Democrat candidate for Chelsea and Fulham in London, credits her entrepreneurial father with giving her the drive and self belief to succeed in life.
She lives in London with second husband Martin and has five children. As well as running her own money-lending business, Money&Co, she is a big supporter of cancer charities and Great Ormond Street Hospital in memory of her daughter Georgina, who died of leukaemia aged just 12.
The best money decision you have made?
Setting up Money&Co. I have personally invested large amounts of money in it and it is doing well. It allows individuals to lend money to good quality British companies, offering a better yield than cash to individuals and enabling companies that need money to grow and employ more people.
On average, since we started lending in 2013, investors have received an annual income of 7.3 per cent – tax-free if wrapped in an Isa. We’ve got a low bad debt rate and I expect it will be the most successful business I have ever built.
Platform lending of the kind we facilitate here at Money&Co. can be a lucrative activity. The average yield achieved by our registered lenders over more than five years of loan facilitation on this platform is more than 8 per cent, before we deduct our one per cent charge. That return has handsomely outperformed retail price inflation, which has averaged around two per cent over this time.
Historical Performance And IFISA Process Guide
That figure is the result of over £19 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.