12 Feb 2019 Peer-to-peer lending platform RateSetter’s ISA has exceeded expectations in its first year, having attracted £175m of subscriptions, and currently accounts for one-fifth of the platform’s £830m funds under management.
Almost one-quarter of RateSetter investors have opened an ISA with 16,500 people currently enjoying their returns tax-free within the ISA wrapper.
In contrast to all other mainstream investments which fell in value last year, investments with RateSetter continued to generate steady returns averaging an annualised 4.5% throughout 2018.
Mario Lupori, Chief Investments Officer at RateSetter, said:
“We have always been confident that investing with RateSetter delivers excellent value and that the tax-free ISA wrapper makes investing more attractive still – but we have been blown away by the popularity of the RateSetter ISA in its first year!
With even the best Cash ISAs barely matching inflation and the volatility of Stocks & Shares testing investors’ nerves, the healthy and steady performance of the RateSetter ISA makes it stand out. 2019 could be the year that we see the Innovative Finance ISA really take off.”
RateSetter launched its ISA in February 2018. The Innovative Finance ISA allows investments in peer-to-peer loans to be included in a tax-free ISA wrapper up to an investor’s £20,000 annual ISA allowance.
To date, every individual investor has received all the capital and interest that they expected thanks to the Provision Fund which spreads each investor’s risk across the whole loan portfolio and provides a buffer against poorly performing loans. The track record over the last eight years is impressive, but it is not a guarantee for the future and capital is at risk.
In total, more than 600,000 customers have used RateSetter to invest or borrow, making it the UK’s most popular peer-to-peer lender. RateSetter recently announced it had passed the milestone of originating more than £3 billion of loans since launch.
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