The three largest Innovative Finance ISA (IFISA) providers in the peer-to-peer lending space that are currently open to new investors are EasyMoney, Folk2Folk and Abundance, exclusive Peer2Peer Finance News research can reveal.
P2P property lender EasyMoney tops the list with more than £60m in IFISA capital. It is expecting “a huge amount” of IFISA money to be transferred from providers that wound down their offering such as Assetz Capital, a spokesperson said.
“We have continued to attract an impressive volume of IFISA transfers, new deposits and top ups,” the spokesperson added. “Investor rates were increased at the start of the year and remain at those levels for now. We are always reviewing the industry and assessing where we are in relation to traditional accounts and competitors. We are making improvements to our website and hope to roll these out soon.”
Read more: Everything you need to know about property-backed IFISAs
Second of the ‘big three’ is the UK’s largest P2P lender in terms of cumulative lending volumes, Folk2Folk.
The business lender, which won Business Lender of the Year and P2P Lender of the Year at December’s Peer2Peer Finance Awards, has reported cumulative lending of £650m, of which £53.5m has been invested via IFISA accounts.
The third largest IFISA portfolio belongs to Abundance, the green crowd bonds platform founded by Bruce Davis, who also helped launch Zopa and is a director of the UK Crowdfunding Association.
Abundance has around £50m in its IFISA, Davis said, who could not give a more specific figure as the platform had not done its year-end numbers yet.
“We have seen £500,000 of inflows this week alone [w/c 13 March] into our Green Municipal investment launch from Westminster council that pays a low-risk return of 4.2 per cent per annum,” he said.
“There is still strong demand for the IFISA especially from those investors seeking diversification from the ups and downs of listed markets.”
Read more: Five IFISA mistakes to avoid
However he added that the FCA’s prohibition of financial incentives, which was recently introduced as part of its stricter rules around promotions of high-risk investments, had an impact on IFISA inflows this year.
The next largest IFISA portfolios belong to property lenders CrowdProperty and Kuflink, at £38.82m and £38.027m respectively.
They are followed by fellow property lenders Loanpad and Proplend who have both reported IFISA volumes of around £30m.
“We currently have over £30m invested in our ISA products and are hoping to see this grow considerably over the next two years,” said Loanpad chief executive Louis Schwartz.
It should be noted that several active IFISA providers declined to disclose data. However, Peer2Peer Finance News’ statistics represent the majority of peer-to-peer lending platforms with IFISAs.
Read more: IFISA returns on the rise
A number of P2P platforms have reported significant growth in their IFISAs over the past year, in an encouraging sign for the industry.
Shojin Property Partners reported a 187 per cent increase in IFISA inflows this tax year, although it declined to reveal exact numbers.
It also noticed a slight drop in the size of the average IFISA investment on its platform, which it attributed to its growing customer base.
“ISA eligibility remains a key benefit of the projects we approve for funding, shown by 83 per cent of our projects currently available for investment being ISA eligible,” a spokesperson said. “With the UK remaining our core market for investors amid a high-inflation environment, the importance of tax efficient products will continue in the foreseeable future. We believe the option for investors to diversify beyond cash ISAs and stocks and shares ISAs with an IFISA is hugely valuable.”
