The Government has moved one step closer to including the proceeds of peer-to-peer (P2P) lending within ISAs as it launched a consultation on how best to implement the change. The move would allow people to lend to small businesses and receive tax-free returns of up to 6 per cent on savings.
‘We want to support savers at all stages of their life and make sure they have greater flexibility and choice over how they invest and access their savings,’ said David Gauke, the financial secretary to the Treasury.
The bank, Britain’s biggest lender to small businesses, said that it now expects to direct thousands of businesses towards Funding Circle, which began a similar scheme with Santander UK last year, and Assetz Capital.
The government is thought to be determined to make similar programmes compulsory for banks, after some of Britain’s biggest lenders came under scrutiny for failing a sector that it considers of paramount importance in boosting the UK’s economic recovery.
Payoff is one of the latest entrants in the growing peer-to-peer lending market. The marketplace lender has set up shop in Costa Mesa, California, and according to the Financial Times, is already “poking fun at the traditional architecture of America’s financial system.”
By Emmanuel Marot:Investing in Peer Lending loans is becoming increasingly popular. Lending Club, the US market leader, has issued more than $3B in consumer credit, and there is now a frenzied competition amongst investors to snatch up the best loans.