Around 405,000 ISA savers are expected to invest in peer-to-peer lending when it becomes part of the tax-free ISA scheme next year.
The research also showed that the new rules will encourage ISA savers to look at putting their money into more traditional types of investment, with 1.1m planning to invest directly into the stock market and 1.5m considering bond investments.
More people are likely to save, with one in five (19%) of those who do not already save in an ISA expecting to open one, and almost one in four (23%) of those who already have an ISA planning to increase their deposit amounts. Just one in ten (11%) of those questioned said they definitely will not take advantage of the changes.
New investors and people increasing their investments expect on average to contribute £95 a month – more than £1,100 a year – with the majority planning to save into cash ISAs and bank and building society saving accounts.
Research among financial advisers shows 45% believe the increased ISA flexibility will generate more awareness of P2P, with 6% of advisers predicting a considerable rise consideration from consumers.
Earlier research showed a lack of understanding of P2P among consumers. Just 42% claimed to be familiar with the term and, of those, 60% were unaware that they had no protection under the FSCS.
The UK P2P lending investment now totals about £3.5bn, around 0.2% of the total £1.7tr savings market.
Andy Caton, Executive Director at Yorkshire Building Society, said:
“We welcome the new ISA flexibilities, which are likely to prove popular, with many savers recognising the benefits of the new freedoms and looking forward to use them to their advantage.
“A key measure of the success of the reforms will be whether they encourage more people to save and our research indicates that the changes will result in encouraging new savers to begin a tax-free nest egg, as well as incentivising existing ISA savers to put away more.
“However, while it is important savers are ensuring they are not missing out on tax breaks from the Government, it is equally vital that they are fully aware of the risks associated with different types of investment.
“All investments are a balance between risk and return and investors should consider these carefully when planning where to put their money. Areas such as P2P and individual share investments can offer higher returns but are not covered by safeguards such as the FSCS. Education is vital if the savings revolution is to deliver as promised.”
