We fear there may be quite a few stories like today’s in the news pipeline. Citing Brexit and Covid complications, the Finnish fintech says all Holvi accounts in the UK will expire on 31 October 2020.
“The UK is a challenging market – and at the beginning of the year we were ready to meet this challenge head on,” says the firm in a statement. “But the world has changed a lot in 2020, and with change come shifting priorities. Coronavirus has disrupted market conditions and added a new layer of complexity. When you factor in the UK’s uncertain regulatory landscape, the waters become even less clear.”
While the Coronavirus pandemic disrupts business as usual, the prospect of facing a no-deal Brexit – and the added burden of getting a UK banking licence – forced the issue to the fore as Holvi weighed its options.
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.