With just forty five days until the start of the new tax year, there are concerns that some of the biggest P2P providers may not have the necessary FCA permissions granted in time for the launch of the Innovative Finance ISA (IFISA).
Even though the government confirmed in the budget last July that P2P lending would be eligible as part of ISAs, some seven months on it appears there’s more than just dotting the i’s and crossing the t’s still to do be done.
The P2P sector has flourished in recent years, but the IFISA was seen by many in the industry as a real game changer anticipating that fed up savers may be tempted to switch their poor paying cash ISAs in their droves for something far more rewarding.
The likes of Funding Circle, RateSetter and Zopa no doubt have their highly polished IFISA marketing promotions all signed off and ready to go but the uncertainty of whether the regulator will give them the green light or not come the 6th April will be hugely frustrating.
Whilst the big guns may be collectively gnashing their teeth waiting for the FCA thumbs up, there are a handful of less well known P2P providers that already have full authorisation from the FCA enabling them to offer products that can be held in a tax free wrapper from day one of the 2016/17 tax year.
For example Crowdstacker which has just launched 12, 18 and 36 month P2P products paying 4.32% pa, 5.43% pa and 6.39% pa is one of the fortunate few knowing that it is ready to accept new IFISA business right from the off.
Karteek Patel, CEO of Crowdstacker, said: “We have heard rumblings that, as yet unauthorised platforms, are in a race against time to secure their direct FCA permissions before the new Innovative Finance ISA launches in April this year.” “As one of the first platforms to secure direct authorisation in June last year, we know that the process is thorough and comprehensive, as it should be in order to protect consumers.”
“It’s very hard to predict when the final authorisation will be forthcoming because there are so many criteria to fulfil to clearly demonstrate your platform is fit for purpose, but ultimately taking the necessary time to obtain authorisation will be in the best interest of the consumer.”
With news that RateSetter intends to offer easy access lending as part of its IFISA range once authorised, hopefully the FCA will give this matter the priority it deserves and the chance for savers to consider a more rewarding alternative when it comes to their tax free savings choices.
Here’s a useful short YouTube video explaining how an IFISA works