Changes to ISA rules

Changes to ISA rules – The recent market weakness has meant that shares in P2P Global Investments (P2P), (the specialist investment trust that provides exposure to a portfolio of peer-to-peer loans) have fallen from more than £11.50 in February to around £10 and now trade at a small discount to NAV with a prospective yield of 6%.

We mentioned in a previous blog that ISA rules have been amended so that now you can include investments into Peer-to-Peer within an ISA. Peer to Peer loans allow people with spare cash to lend directly to people or businesses who want a short-term loan. By cutting out the middleman they are able to offer ‘savers’ a higher return on their money, while allowing borrowers to obtain funds at a cheaper rate.

The peer-to-peer industry has grown dramatically since the financial crisis and is now well established in most of the developed economies around the world.

P2P Global Investments raised £200m when it floated on the London Stock Exchange in May 2014 and has since had two further share issues including separately listed C shares that came to the market in June.

The fund invests in a portfolio of peer-to-peer loans with targeted annualised returns of 5% to 15% spread across multiple platforms, countries and credit risks, with the aim of generating an attractive level of income and capital growth. It hopes to pay an annual yield of 6% to 8% with quarterly distributions, and if held in an ISA there would be no tax to pay on the income.

If you are unaware of this savings proposition, seek advice from a good IFA.

Ray Best is a resilient Financial Planner with a unique approach to investment planning, his work ethic has propelled him from humble beginnings to be voted as a top UK Financial Planner by Vouched For (as published in the Sunday Times). These days he works with families with large investment portfolios or big inheritance tax liabilities, the first step, is to book a Discovery Meeting HERE.

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