Innovative Finance ISA
The Innovative Finance ISA (IFISA) was launched in April 2016, allowing peer to peer investments (P2P) to be held within a tax-efficient ISA wrapper. To offer the Innovate Finance ISA, P2P providers must be fully authorised by the the FCA and approved by the HMRC as ISA plan managers. You can track who is offering the Innovative Finance ISA and at which regulatory stage other P2P providers who haven't launched ISAs are at by viewing the Orca Innovative Finance ISA tracker tables below.
Frequently Asked Questions
Introduced April 6th 2016, the Innovative Finance ISA (IFISA) is a tax-efficient ISA wrapper which allows peer to peer investments to be held in an Individual Savings Account (ISA). This means investors are not required to pay tax on the income generated from their investments.
Open an IFISA online with one of the eligible P2P providers (also ISA plan manager) and invest in P2P loans.
The ISA subscription limit for tax year 2017-18 is £20k. This can be subscribed entirely or proportionally to an IFISA, with the remaining allowance held in the other ISA types, typically Cash and Stocks & Shares. You cannot subscribe more than the annual allowance in a given tax year.
Innovative Finance ISA Features
Innovative Finance ISA Available (P2P Providers)
Platform | Interest Rate(%) | Amount Lent(£) | Investment | |
RateSetter | 3.1% - 5.0% | £2.35 billion | P2P Business, Consumer, Property | Open an Account |
Crowdstacker | 4.32% - 7% | £37.80 million | P2P Business | Open an Account |
Lending Works | 3.3% - 6% | £92.28 million | P2P Consumer | Open an Account |
Landbay | 3.03% - 4.5% | £94.45 million | P2P Property | Open an Account |
Zopa | 2.9% - 6.7% | £3.06 billion | P2P Consumer | Open an Account |
Crowd2Fund | 8.7% | £10 million | P2P Business | Open an Account |
LandlordInvest | 5% - 12% | £1 million | P2P Property | Open an Account |
LendingCrowd | 6% | £26.8 million | P2P Business | Open an Account |
Money&Co | 6-10% | £7.73 million | P2P Business | Open an Account |
Relendex | 8.5% - 10% | £19.16 million | P2P Property | Open an Account |
Proplend | 6.28% - 11.05% | £31.53 million | P2P Property | Open an Account |
Octopus Choice | 4% - 4.3% | £169.55 million | P2P Property | Open an Account |
Folk2Folk | 5.5% - 6.5% | £197.93 million | P2P Business | Open an Account |
Funding Secure | 10% - 15% | £220.36 million | P2P Consumer, Property, Pawn | Open an Account |
HNW Lending | 6% - 15% | - | P2P Consumer, Business, Pawn | Open an Account |
Kuflink | 3.99% - 5.35% | - | P2P Property | Open an Account |
Simple Backing | 6% - 18% | - | P2P Property | Open an Account |
Ablrate | 10%-16% | £32.62 million | P2P Business | Open an Account |
Funding Circle | 6.7% - 7.5% | £3.29 billion | P2P Business | Open an Account |
JustUs | 1.2% - 9.6% | £2.4 million | P2P Consumer | Open an Account |
Rebuilding Society | 13.9% - 18.2% | £12.2 million | P2P Business | Open an Account |
Assetz Capital | 3.75% - 15.5% | £433.5 million | P2P Business and Property | Open an Account |
easyMoney | 4.05% - 7.28% | - | P2P Property | Open an Account |
CrowdProperty | 8% | £14.4 million | P2P Property | Open an Account |
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IFISA Avaliable (Bonds & Debentures)
Platform | Interest Rate(%) | Amount Lent(£) | Investment | |
Goji Investments | 5% | - | Crowd Bond (Diversified Lending) | Open an Account |
Downing Crowd | 4% - 7% | £48.22 million | Crowd Bond (Business) | Open an Account |
UK Bond Network | 11% | £12.28 million | Bond (Business) | Open an Account |
Abundance Generation | 4% - 12% | £66.76 million | Debenture (Energy Projects) | Open an Account |
Property Crowd | 10% - 12% | - | Crowd Bond (Property) | Open an Account |
Advancr (Triple Point) | 5.1% - 6.2% | - | Crowd Bond (Business) | Open an Account |
Crowd For Angels | 12% | - | Crowd Bond (Business) | Open an Account |
Basset Gold | 6% | - | Bond (Diversified Lending) | Open an Account |
CapitalRise | 10% - 14% | - | Property | Open an Account |
Mongoose Crowd | 4.5% - 5% | - | Crowd Bond (Energy) | Open an Account |
Full FCA Authorisation
Platform | Interest Rate(%) | Amount Lent(£) | Loan Type | |
CapitalStackers | 5% - 15% | - | P2P Property | Open an Account |
ArchOver | 7.23% - 9% | £60.44 million | P2P Business | Open an Account |
Linked Finance | 8.5% - 15% | - | P2P Business | Open an Account |
Unbolted | 8% - 10.5% | - | P2P Pawn | Open an Account |
Funding Knight | 8.96% | £31.48 million | Business | Open an Account |
ThinCats | 9% - 11.24% | £274.58 million | P2P Business | Open an Account |
Flender | 8% - 11% | - | P2P Business | Open an Account |
FCA Interim Permissions
Platform | Interest Rate(%) | Amount Lent(£) | Loan Type | |
Lendy | 12% | £366.9 million | P2P Property | Open an Account |
Innovative Finance ISA: How it Works
By holding your peer to peer investments (P2P) in an Innovative Finance ISA (IFISA) you can earn competitive interest rates and shield any returns from tax. Providing the P2P provider meets the necessary regulatory requirements you will be able to Open an Account, invest in P2P investments and earn tax-free returns.
Steps to investing
- Research the P2P providers offering the Innovative Finance ISA
- Select the IFISA provider and open an account
- Choose the P2P product you wish to invest in. These will be held within your Innovative Finance ISA
- Start earning interest, tax-free
Peer to peer lending is not covered by the FSCS. Your capital is at risk.
General ISA Rules
Annual allowance tax-year 2017-18
£20k subscription limit
Allowance spread
ISA allocation is flexible, e.g: £10,000 IFISA, £5k Cash, £5k Stocks & Shares
One ISA of each type per year
You cannot subscribe your annual ISA allowance to more than one of the same ISA type in the tax year
Transfers
You can transfer any amount of “old ISA money” to an ISA of the same or diferent type, e.g: £25,000 old Cash ISA subscriptions to a new IFISA
Transfers and Withdrawals
ISA Guidelines state that an investor can transfer current and past years’ ISA subscriptions to a new ISA, including an Innovative Finance ISA:
- You can transfer all of the current year’s ISA subscriptions to a new IFISA
- You can transfer unlimited old tax-year ISA subscriptions, from any ISA type, to an IFISA
- You can transfer old ISA money to multiple IFISAs in the tax-year (ISA plan manager holds discretion over this)
You cannot subscribe your annual tax-year ISA allowance to more than one IFISA.
It is between you and the P2P provider how withdrawals take place. Most providers can facilitate early access through selling your investment to other investors, but the time it takes will depend on the liquidity of the provider.
Peer to Peer Lending
Industry established
2005
Cumulative total lent
£12 billion
Total lent 2017
£4 billion
No. of UK P2P investors
200,000+ (estimate)
Peer to Peer Lending
Peer to peer lending has been around for more than a decade having been established in 2005. The industry became regulated in 2014, and most providers have now received full FCA permissions.
To be able to offer an IFISA a provider (including 3rd party provider) must have the following:
- Full FCA authorisation
- HMRC ISA plan manager approval
Most major P2P providers received their full FCA permissions over the course of 2017. Some have still not received full permissions and several, who have received full permissions, are yet to launch their IFISAs onto the market.

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Frequently Asked Questions
Introduced April 6th 2016, the Innovative Finance ISA (IFISA) is a tax-efficient ISA wrapper which allows peer to peer investments to be held in an Individual Savings Account (ISA). This means investors are not required to pay tax on the income generated from their investments.
Open an IFISA online with one of the eligible P2P providers (also ISA plan manager) and invest in P2P loans.
The ISA subscription limit for tax year 2017-18 is £20k. This can be subscribed entirely or proportionally to an IFISA, with the remaining allowance held in the other ISA types, typically Cash and Stocks & Shares. You cannot subscribe more than the annual allowance in a given tax year.
There are three main ISA types: Cash, Stocks and Shares and Innovative Finance ISA. You can spread your annual tax year allowance of £20k (2017-2018 allowance) between these ISAs however you wish.
Fully FCA authorised and HMRC ISA plan manager approved providers can offer IFISAs. Most peer to peer lending providers operate under full FCA permissions. Some still require approval as an ISA plan manager before they can offer their Innovative Finance ISA. Review the Orca IFISA tracker tables for clarification on a P2P provider’s status.
To be eligible to invest in an IFISA you must: - be aged 18 or over; - be resident in the United Kingdom, or if not a resident be performing duties as a Crown employee serving overseas and paid by public revenue of the United Kingdom (typically a serving member of the armed forces, or a diplomat), or be married to, or in a civil partnership with, such a person; - not have exceeded the overall subscription limit which is £20k for 2017/18. You will need your bank account details and National Insurance number to activate your IFISA, before depositing funds and investing in the peer to peer investment(s) via the P2P lending provider; - not have subscribed to another ISA of the same type in that tax year, otherwise than by way of additional permitted subscriptions, flexible ISA replacement subscriptions, defaulted cash account subscriptions to a cash ISA, and Help to Buy ISA reinstatement subscriptions.
ISA Guidelines stipulate that you may only subscribe annual allowance subscriptions to one Innovative Finance ISA per tax year. This means some, or all, of your annual allowance of £20k (2017/ 2018) can be subscribed to only one IFISA within the 2017/ 2018 tax year. The same rule applies to a Cash ISA and a Stocks and Shares ISA.
You can transfer current tax year ISA subscriptions from any ISA type to an Innovative Finance ISA. These subscriptions must be within the tax year allowance of £20k. If you are transferring out of a current IFISA, you will need to liquidate your P2P investment in order to withdraw and transfer. You can transfer unlimited ISA subscriptions from any previous years’ ISAs. Again, any ISA type qualifies.
You will only be able to transfer from your IFISA providing you can liquidate your P2P investments into cash. Some P2P providers can facilitate the sale of your P2P investment to another investor, however some P2P providers do not offer this service. This process will be determined between you and the P2P provider acting as your ISA plan manager.
Peer to peer lending is not considered a liquid asset class. Some P2P providers offer early access features where you can liquidate your assets by selling your investment to other investors. Liquidating your investment to cash is important so you can withdraw from your IFISA or to transfer subscriptions to a new IFISA. This process will be determined between you and the P2P provider acting as your ISA plan manager (unless a 3rd party provider is your plan manager, where you are still required to coordinate the sale of the investment).
Peer to peer lending became regulated by the UK Financial Conduct Authority (FCA) in 2014. Most major platforms operate under full FCA permissions.
No. Peer to peer lending is not covered by the FSCS. P2P providers employ strict security measures, so should a borrower default on their loan, the P2P provider will attempt to recover your capital (and interest if possible). There are no guarantees, however. Your capital is at risk.