Innovative Finance ISA Explained (IFISA) | Peer to Peer Lending
Channel: Financial Madness
Date: 2021-03-08

Launched in April 2016, an Innovative Finance ISA is an ISA that allows you and several other individuals to lend your money to other individuals and businesses. This is known as  peer-to-peer lending. So this is very different to holding your money as Cash in a Cash ISA, or investing it like a Stocks and Shares ISA, or holding them as cash/investments for your first property or retirement like the Lifetime ISA. 

As mentioned, IFISAs (Innovative Finance ISAs) are account where you can lend your money to other individuals or businesses. You as the lender, will receive interest plus you get your money back once the loan has been repaid. And for the borrower, it is a way for them to them to get funding without having to go the bank, (Which is typically the normal route)
Because, the bank is cut out of the process, by investing your money in P2P  (peer to peer lending) you typically earn higher rates of interest than a regular savings account. And because your getting this interest through an ISA which is a tax free wrapper, you will not have to worry about paying taxes on any interest earned.
And because it is part of the ISA family, any money that you put into this account, does contribute to your £20,000 ISA tax year allowance. 

Chapter Information:
0:00 Introduction
0:19 What is the Innovative Finance ISA?
2:04 What are some of the risks?
4:17 What are the expected returns?
5:26 How to apply for the Innovative Finance ISA?

▶Check the IFISA provider is regulated by the FCA: https://register.fca.org.uk/s/

▶Financial Madness - ISAs Explained: https://youtu.be/PMRA8Q7IMNw

▶Financial Madness - Lifetime ISA Explained: https://youtu.be/5--SQck-zzg

DISCLAIMER - Any advice or (statements perceived to be advice) given in this video and any other videos on my channel are for information purposes only, and does not act as financial advice.  Your  are fully responsible for your financial decisions. If you are in need of Financial Advice, please seek out a professional advisor. If your are unsure on how to do this, feel free to reach out to me and I am more than happy to guide you.

#IFISA #InnovativeFinanceISA #ISA