P2P lending in 2021

With Ratesetter sold to Metro and no longer lending and Funding Circle lending frozen for the foreseeable future, who do folks use for P2P lending? I have noticed a P2P service app called October and on called Octopus Investments. Any feedback on them, or any other P2P lending providers worth looking at?

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Ratesetter is lending. I know this as I just got a loan from them a few weeks ago. They just no longer need the general public to fund the loans as Metro is underwriting the loans.

Sorry, I see the confusion. What I meant was Lending from my persective, where I and the Lender.

I have accounts with Zopa, Assetz Capital, Funding Circle, and Lending Crowd.

Both Zopa and Assetz Capital are currently open to retail investors. The other two are not.

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That’s interesting. If you don’t mind me asking, do you have IFISAs with several of them?
If so, how do you choose which one to put money in for a given finacial year?

Yeah, I have IFISAs with all of them.

I opened all of them in either 2017 or 2018 when IFISAs were just taking off. So I think decision back then would have just been based on which of these platforms released IFISAs first. Also, at least two of them would have been opened (and perhaps only ever funded) through ISA transfers of prior tax year funds rather than subscribing. So there were times when I was adding money to more than one IFISA in the same tax year.

I haven’t added any new money to my P2P lending since 2019 and no near term plans to do so, so not currently thinking about which one to subscribe to in 2021.

I’m new to all this, I thought you could only add money to one ISA type per tax year?

The below is based on my understanding and what I’ve done in the past. Make sure you do your own checks as well.

There’s a distinction between subscribing and transferring.

Subscribing is adding money to an ISA from a non-ISA account. You can subscribe up to £20K in one tax year. This subscription can be spread across several ISAs but only allowed to subscribe to one of each type of ISA. So you could for example subscribe to a cash ISA, a S&S ISA, and an IFISA in same tax year as long as total subscription does not exceed £20K. But you’re not allowed to subscribe to two IFISAs in same tax year.

Totally separate from that is transferring money between ISAs. When transferring money that was subscribed to an ISA in a previous tax year there’s no restriction on the amount you can transfer, the types of ISAs you can transfer between, or the amount of platforms of the same type you can transfer to. So transfers of previous year funds is a mechanism that can be used to move money onto several IFISA platforms in the same tax year. If I want to get new money into several ISAs of same type what I have done in the past is to subscribe that money to a cash ISA at the end of a tax year and then transfer it to several other ISAs at the start of next tax year.

Couple of important points about transfers

  1. The above is possible only with money that has been subscribed to an ISA in a previous tax year. There are other rules relating to transferring money between ISAs that was subscribed in current tax year. I can’t remember the details of those rules but it definitely would not enable spreading money across several ISAs of same type in the same tax year.

  2. When doing a transfer it’s crucial you get the ISA platform you are transferring money to to do the transfer for you using their official paperwork/mechanism. If you remove the money and move to another platform via a non-ISA account you would be subscribing new money and it wouldn’t be a transfer.

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Aha, I didn’t know about transferring. I’ll do some research.

So I could subscribe £20k into a cash ISA and then in April transfer it to multiple IFISA, and my subsciption allowence to be rest to 20k in April right?

Who do we know anyone that offers a Cash ISA that will allow me to transfer to multiple S&S ISAs or IFISAs on the 7th of April 2021?

Long list here apparently https://lynk.icu/ern0y

I don’t recognise any of the Cash ISA providers as being modern fintech. Any fintech you could recommend for this?

Yes. And actually I didn’t mention it in previous post but the account doesn’t necessarily need to be a cash ISA. It could any ISA. So you could for example open a single IFISA by 5th April, keep some of the cash uninvested and then transfer that cash to multiple other IFISAs in 21/22 tax year.

I think any will do. ISA providers are not obliged to allow you to transfer IN (although most do) but I’m pretty sure all have to allow you to transfer OUT.

In terms of cash ISAs I’ve never had one with a fintech. The only suggestion I’d make with cash ISAs is to get one that’s classed as a flexible cash ISA. Flexible ISAs allow you to withdraw money to non-ISA account and put the same amount back in without affecting your subscription allowance that tax year. This can sometimes be useful. There’s a list of major banks that offer flexible cash ISAs here:

Thank you that’s very helpful.

Interestingly Monzo are listed as a provider of all ISA types.

I suspect that’s because of ambition to integrate products from different providers. If they for example partner with a S&S ISA provider Monzo probably need S&S ISA manager status to administer it and integrate it in the app.

I don’t think it suggests anything is imminent though. I think the wide range of permissions was already in place back when Monzo used to offer a cash ISA.