Charles Rendell, chair of the Financial Conduct Authority, recently made an online presentation to retail bankers and others on the “front line” of the financial services industry. Mondovisione carries the text of the speech. We offer bullet-point highlights and the introduction. The full text is available here:
Since the start of the coronavirus pandemic I’ve discussed with a number of those present how financial services firms, regulators, the government and the voluntary sector have been working together to keep the financial system operating, get businesses through the lockdown, and consumers through the crisis.
We don’t agree about everything, but we agree on a lot. And we agree first and foremost that we all owe our gratitude to tens of thousands of people who work in financial services up and down the country and who have been on the front line. The people who have kept bank branches and ATMs open, cash circulating and payments flowing. The people who have manned the phones under enormous pressure to help hundreds of thousands of people manage their debt burdens and keep their businesses afloat. The people who have kept key systems resilient.
Historical Performance And IFISA Process Guide
That figure is the result of over £21 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.