Innovative Finance ISA’s

Innovative Finance ISA’s – This is a new style of ISA, that was supposed to be available from April this year. It is similar to a Stocks and Share ISA except that you can include Peer to Peer loans within it.

The first problem is that the FCA has yet to formally approve any of the Peer to Peer firms, so currently you can do nothing. Despite the lack of regulatory approval, many Peer to peer firms continue to advertise the Innovative finance ISA’s.

Another problem is that if you hold existing P2P loans, then you would have to sell them and buy again inside an ISA (should regulatory approval be given).

Although of course it is possible to invest in specialised investment trusts that hold P2P investments.

Unless you are fairly committed to P2P investing, we would advise caution as P2P loans are not covered by the Financial Services Compensation Scheme, that means that if things go wrong you could lose money.

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