Ten Inflation-Beating IFISAs
Its getting harder and harder for savers to find a way to beat the rates of inflation – especially when that rate seems to be rising all the time!
Most recently, it was revealed that the consumer price index rose to 2.5 per cent in July, up from 2.4 per cent in June. The rising price of goods effectively cancels out any gains which savers may have made from the recent base rate hike, and leaves consumers in that all-too familiar situation where they are searching for inflation-beating returns.
Luckily, the vast majority of Innovative Finance ISAs (IFISAs) are comfortably beating the current rate of inflation, by offering tax-free returns of at least 3.54 per cent.
Read on for ten of the best inflation-beating IFISAs (in alphabetical order), and where to find them…
1. Assetz Capital Property Secured Account IFISA
- Target returns: 5.5 per cent
Assetz Capital offers IFISA wrappers on all of its P2P lending accounts.
The Property Secured Account is one of the platform’s most popular offerings, allowing investors to access returns of up to 5.5 per cent by funding business loans backed by property assets which “substantially exceed the loan value”.
This means that if the loans default, Assetz should be able to recoup investors’ capital through the sale or re-mortgaging of the properties.
2. Funding Circle Conservative IFISA
- Target returns: 5-5.5 per cent
Funding Circle offers two IFISA-eligible accounts – a ‘Conservative’ account which only lends to low-risk businesses; and a slightly higher-risk ‘Balanced’ account which offers 6-7 per cent in returns. Both accounts have been created as flexible IFISAs, so investors can make withdrawals and re-investments without affecting their annual ISA allowance.
3. HNW Lending IFISA
- Target returns: 7 per cent
HNW Lending is a P2P platform for the very wealthy, with a minimum investment is £10,000. Every loan on the platform is backed by assets, which may help explain why the platform has had no losses to date.
4. Landbay IFISA
- Target returns: 3.54 per cent
Landbay only invests in property-backed loans, and every investment is automatically diversified across multiple buy-to-let mortgages.
Investors can open an account with as little as £100, and these investments can be sold on via the platform’s secondary market, making it one of the most accessible IFISAs out there.
5. LendingCrowd IFISA
- Target returns: 6 per cent
This IFISA allows investors to fund British businesses and offers instant diversification by spreading each investment across a minimum of 20 different loans, thus reducing the risk from defaults. There is a minimum investment of £1,000.
6. Lending Works 5-Year Lending IFISA
- Target returns: 6 per cent
Lending Works invests in a variety of consumer loans, with every lender going through a rigorous credit check.
As the name suggests, this IFISA locks investors in for a five-year period, although a three-year version of the IFISA is also available, paying 4.5 per cent.
7. Proplend IFISA
- Target returns: 5-12 per cent
Proplend offers a variety of IFISA options, depending on the risk profile of the investor. Conservative investors can target returns of five per cent by investing in lower-risk property-backed loans.
8. RateSetter IFISA
- Target returns: 5.4 per cent
One of the largest P2P platforms in the UK, RateSetter offers tax-free returns of up to 5.4 per cent by investing in consumer loans. Investors can choose from a one-year, five-year or ‘rolling’ investment option.
The platform maintains a well-stocked ‘provision fund’ which is used to refund investors in the event of loan defaults.
9. UK Bond Network IFISA
- Target returns: 7-12 per cent
This P2P platform allows investors to place their money in a series of corporate ‘mini-bonds’. This money is then allocated to British-based businesses who can prove that they are creditworthy.
Investors are repaid interest of between seven and 12 per cent each month, and when the bond matures the capital is returned.
10. Zopa Core Account IFISA
- Target returns: 4 per cent
Zopa was the first P2P platform to launch in the UK, and it still stands by its ethos of matching personal loans with personal investors.
There are two types of account – Zopa Core and Zopa Plus.
Both offer inflation-beating returns of four per cent and 4.6 per cent, respectively, but the Core account is aimed particularly at conservative investors who don’t like to take on too much risk in their search for returns.
Updated: Tuesday, September 11th, 2018