In the Spotlight with Giles Andrews, CEO and co-founder of Zopa

We spoke to Giles Andrews, CEO and co-founder of Zopa, about the future of the peer-to-peer industry and how tax free lending will attract new consumers.

Related topics:  In The Spotlight
Rozi Jones
4th April 2015
Giles Andrews Zopa

FR: Why do you think the peer-to-peer industry is growing at such a rapid rate?

The industry is growing at its fastest pace since Zopa pioneered peer-to-peer lending back in 2005. The growth is fuelled by an increased level of trust in what we do. Most consumers are still unaware of P2P lending and its rewards as they continue to receive a poor deal from their banks. We are now seeing people being more proactive in looking for alternatives that provide better rates on loans and for investing for your life goals. I expect that consumer P2P lending platforms will increase their share of the personal loans market as traditional lenders lose ground over the next five years. Also, you’ll see money move away from bank savings accounts to P2P lending platforms once tax free lending is in place from 2016 as P2P becomes part of the ISA framework. This will help millions of people.

FR: Do you see peer-to-peer lending becoming mainstream in the near future?

Very much so. I see Zopa becoming the norm in money terms in the same way eBay has for consumer goods. At Zopa we’re building a service that we believe will be here for generations to come. We’re providing better value to everyone looking to lend or borrow by making money simple, fair and transparent.

FR: The Treasury recently confirmed the new savings tax break will also apply to interest earned from P2P lending – do you think this will attract new consumers?

The confirmation from The Treasury about being included in the personal savings tax allowance is very exciting and will make a huge positive difference to the majority of our lenders. This means that they will be able to lend tax free from April 2016. I expect this will be a huge boost to the industry and will attract a large number of new consumers to peer-to-peer lending. The ability to offer tax free returns of 5%+ will be very attractive to many people, especially those who have been suffering from very low interest returns.

FR: How will regulatory changes continue to influence the market?

I think we have a positive regulatory environment in the UK for peer-to-peer lending. As an industry we have secured regulation for P2P lending and so far it has helped provide a stamp of approval and has aided trust and growth in the sector. Members of the P2PFA have worked hard to ensure that there is not over regulation of the sector to avoid stifling growth or innovation. I hope that platforms in the industry continue to grow in a sustainable way and ensure that standards are maintained. This will continue to build trust with consumers and allow the market to be competitive and provide value to UK customers.

FR: How will next month’s pension freedoms affect the peer-to-peer industry?

The change to pensions is a positive improvement for consumers and for the P2P industry. We think platforms like Zopa offer pensioners a reliable and predictable income at a good rate of 5%+ for relatively low risk. We see P2P as an income alternative to annuities and one that has the advantage of being able to pass on the capital to your estate unlike an annuity. We expect a large number of consumers to move some of their retirement funds to Zopa from April and we offer specific income drawdown products to provide increased flexibility and control to meet the needs of this specific type of customer. We see the changes as an additional opportunity to provide better value to consumers with improved transparency and control over their money. P2P lending will offer pensioners the ability to drawdown or grow their money. Ultimately, it allows people to do more interesting things with their time than worry about how their money is performing.

FR: Have you got any big plans or exciting news coming up that you can tell us about?

You will see a lot more of Zopa in the coming months. We have some exciting partnerships we are working on which we can’t discuss right now and some interesting product developments in the pipeline for our lending and borrowing customers. I have no doubt that 2015 is set to be an exciting year for Zopa and the P2P industry.

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