Question: When is saving not really saving? Answer: When it's an investment.
We have long been mindful of the need to highlight the difference between savings and investments. The differentiation of the two is something that the Financial Conduct Authority has stressed in various guidance notes. Our care to highlight the risks inherent in peer-to-peer (P2P) lending – which we strive to make as safe as possible, of course – is, we believe, part of the reason that Money&Co. was among the first to receive its authorisation to market Innovative Finance ISAs, early last year.
Our friends at P2P Finance News reprise a Moneywise report that comparison sites are not always as scrupulous in observing the demarcation between savings and investments as the P2P players they monitor.
TWO comparison websites are revamping how they display peer-to-peer investments, in response to a Moneywise investigation that criticised the inclusion of P2P in their savings product pages.
The personal finance magazine reported before Christmas that it had found issues with the four sites that offer P2P comparisons – Go Compare, Love Money, Money.co.uk and MoneySuperMarket.
It argues that by including P2P in savings product listings, consumers may not fully understand that they are investment products with risks involved.
In contrast to the comparison websites, P2P platforms themselves tend to be clear about describing the products as investments rather than savings, in line with Financial Conduct Authority guidance.
The first new loan offering of 2108 has got off to a flying start. It is more than 67 per cent funded in two days. The offering has an indicative yield of 9 per cent, and an A rating from our credit-analysis committee.
Money&Co. Podcast: We asked David Buik of London investment bank, Panmure Gordon, Baroness Susan Kramer, who holds the Treasury brief for the Liberal Democrats in the House of Lords, and Money&Co. CEO, Nicola Horlick, for their views of the financial highlights of 2017 and their predictions for 2018. This podcast of over 25 minutes also focuses on the outlook for the UK's small and medium-sized companies, the lifeblood of the UK economy - and of course the borrowers who find funding for growth via our platform.
Peer-to-peer (P2P) lending is about bringing individuals seeking a good return on capital together with businesses seeking funds to grow. The average gross return achieved by lenders is 8.6 per cent (7.6 per cent net). This compares with 1.3 per cent, which is the best return currently available on cash deposit with a bank or building society, according to comparison sites such as Moneyfacts. See also risk factors, at the foot of this page.
In addition to new loan offerings, our secondary loan market, offering existing loans for sale by lenders, is available to registered Money&Co. users.
All loans can be held, tax-free, in an Innovative Finance Individual Savings Account, or Innovative Finance ISA.
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 an earlier article on security, access and yield.
If you haven't made a loan via Money&Co. before, please read the risk warnings and the FAQ section. You may also wish to consult a financial adviser before making an investment. Capital is at risk, once loaned.