Abundance said it wants to see more providers offering the IFISA very soon, but that "you can never underestimate the challenges of becoming authorised and the high level of scrutiny with which the regulator treats each application". So far, only a handful of peer-to-peer lenders have received full authorisation.
The Abundance ISA will initially pay investors a return of 2% p.a. on money paid in from April 6th, through to October. Then, the customer will choose which renewable energy project(s) available on the platform they would like to invest in, and receive an effective rate of return of between 6% and 9%, depending on the project. The October date is controlled by Government legislation and is subject to confirmation.
All returns paid to Abundance ISA investors will be free of any personal liability to income or capital gains tax.
Earlier today Goji, which enables P2P platforms to gain access to new investment products and markets, announced its launch with initial clients including Landbay, ArchOver and Assetz Capital.
Goji hopes to be among the first to offer the IFISA to investors by managing the "administrative complexity" for P2P platforms.
Bruce Davis, cofounder and joint MD of Abundance, said:
“The Innovative Finance ISA is a very exciting product, offering ISA buyers a much-needed risk/return middle ground between the very low returns paid by Cash ISAs and the wild volatility of global markets offered in Stocks and Shares ISAs. More than this, our product is the ‘Nicer ISA’, offering unique ‘win win’ investments that pay attractive returns every six months at relatively low risk, while creating something good for the environment and society.
“The new ISA wrapper means that Abundance investors will enjoy even better returns in their pockets because of the tax breaks, encouraging them to invest even more in the better future that our projects contribute towards.
“Given that previous years’ Cash ISAs and Stocks & Shares ISAs can also be transferred into an Abundance ISA, this new product could do wonders for the thousands of investors needing a more diversified portfolio whilst unleashing a massive movement of money from holdings doing little or nothing for the UK, into projects vital for growth in our real economy and for the future of our environment.
“Being first into the IFISA market has been a five year journey that started back in 2009 before we launched, when we chose to pursue a regulated route to market. A costly two year process with the regulator followed to gain authorisation and made Abundance the very first regulated P2P platform in the UK."
