IFISA Statistics

The year in IFISAs, so far…

It’s hard to believe that Innovative Finance ISAs (IFISAs) have only been around for two years.

Ever since the tax-free investment wrapper was launched in April 2016, they have rarely been out of the news. And it’s hardly surprising – in a chronically low-interest rate environment, IFISAs were among the only tax-free financial products that could offer inflation-beating returns without the volatility of a Stocks and Shares ISA.

In fact, savvy Brits have already poured at least £300m into IFISA accounts since the first IFISAs were launched in April 2016.

Back then, only a handful of P2P lenders were authorised to offer the product.In late April 2016, the P2P sector was surprised to learn that relative newcomers Crowdstacker and Crowd2Fund had been granted the first IFISA licenses.

It would be another 14 months before the first of the ‘Big Three’ platforms would win ISA authorisation and launch their own IFISA products.

In January 2017, the first property-backed IFISA was launched by LandlordInvest, and in April 2017 the IFISA allowance increased from £15,240 to £20,000, allowing investors to shelter even more money in the tax-free wrappers.

But it wasn’t until mid-2017 that the IFISA market started to heat up.

In June 2017, Zopa – the UK’s first P2P lender – finally won its IFISA license, offering initial returns of either 3.9 per cent or 6.1 per cent, depending on the type of product chosen. Then in November 2017, Funding Circle – one of the largest P2P platforms in the UK – finally began to roll out its IFISA product to existing customers with proposed returns of 7.2 per cent per year.

This year, the last of the ‘Big Three’ – RateSetter – finally unveiled its IFISA, and the P2P sector at large began to reflect on two years of ISA authorisations.

Here are just a few of the highlights of 2018 – the year of the IFISA.

RateSetter becomes the last of the ‘Big Three’ P2P platforms to launch its IFISA, first to existing customers only, then to new customers. Expected annual returns were set at between three and six per cent.

Zopa claims that it has made more than £100m through IFISA subscriptions alone in the 2017/18 tax year – up from just £17m in the previous tax year.

The Office of Tax Simplification proposed allowing investors to open multiple IFISAs in a tax year, in line with other ISA structures. Under current legislation, only one IFISA account can be opened per tax year.

Just four months after launching its first IFISA products, RateSetter announced that it had received £100m in IFISA subscriptions.

Research by Oaksmore ISA found that just six per cent of Brits knew what an IFISA was, while 16 per cent were not familiar with any type of ISA. However, the same report found that 76 per cent of savers would be open to investing in IFISAs once they had been made aware of the benefits.

Data from the Peer-to-Peer Finance Association found that the UK’s largest P2P platforms had taken in more than £300m from IFISA investments, via 28,000 IFISA accounts.

Research from P2P platform Assetz Capital showed that 52 per cent of investors put money into cash ISAs in the first quarter of 2018, but only 37 per cent continued to do so at the end of last year’s ISA season. Meanwhile, 61 per cent of investors were using stocks and shares ISAs, and 60 per cent had an IFISA.

The Financial Conduct Authority (FCA) released a consultation paper in which it proposed expanding the remit of P2P lenders to include home finance loans among other products. This could mean that IFISA holders may soon be able to invest in mortgage products and longer-term i

Originally Published: Tuesday, September 11th, 2018
Updated: Tuesday, September 11th, 2018

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