Here is a graph displaying the returns available from 10 of the top Fixed Rate ISAs* on the market currently, compared with three Innovative Finance ISA providers.
*10 Fixed Rate ISA providers taken from ‘Top ISA Rates’ on 25/01/17: https://top-isa-rates.co.uk/
The annual ISA allowance for 2016-17 is £15,240. It was the same the year before, but has been gradually increasing for some time.
ISA subscription rules
£15,240 for 2015-16 (two months remaining) rising to £20,000 for tax year 2016-17
Subscription allowance cannot be exceeded in the tax-year
Allowance can be spread between ISAs however the investor wishes:
£10,000 to IFISA, £3,000 to Stocks & Shares and £2,240 to Cash ISA for example.
An investor cannot subscribe to another ISA of the same type in that tax year:
transfer rules allow ISA plan managers who offer the IFISA to make their own decision when it comes to an investor holding multiple IFISAs in a single tax year (explained in ‘Adapted IFISA rules’).
- all of the current year’s ISA subscriptions, the investments bought with those subscriptions, and any income arising on those investments (current year account),
- some or all of the previous years’ ISA subscriptions, the investments bought with those subscriptions, and any income arising on those investments (prior years account).
Adapted IFISA rules
Because P2P lending is not a liquid asset class, an investor’s investment must be sold to a new investor on the platform, thus turning the asset into cash so that it can then be transferred.
An investor could subscribe their tax-year ISA allowance to an Innovative Finance ISA with one ISA plan manager (P2P platform or other provider) and then open another IF ISA in the same tax year with a different plan manager and transfer old ISA money into it, therefore holding two IF ISAs in the tax year*
IF ISA Providers
- Full FCA authorisation
- HMRC approval as an ISA manager
- IF ISA launched
*Statistics correct at time of publication – rates in per annum.
IFISA launched (click name to visit platform’s website)
- Crowdstacker: 6.39% or 7%
- Crowd2Fund: 8.7% APR (estimated)
- LandlordInvest: 5% to 12% (loan dependent)
HMRC ISA approved
Full FCA authorisation
- Capital Stackers: 5% to 20% (loan dependent)
Want to keep informed about platforms offering the Innovative Finance ISA? Visit our IFISA Tracker page