RateSetter ISA subscriptions reach £250m

UK peer-to-peer (P2P) lender RateSetter have revealed that at the end of June its ISA had attracted more than £250m in subscriptions, since being launched in February 2018.

The Innovative Finance ISA (IF ISA) is understood to be the most popular product of its type, recording £50m of ISA inflows received in the last three months alone.

Around 22,000 investors hold a RateSetter ISA, with the average account balance sitting at £11,500, which is higher than the average balance for cash ISAs (£5,114) and stocks and shares ISAs (£10,124), with RateSetter investors also enjoying an interest rate of 4.5 per cent per annum on average.

Recent data collected by the Tax Incentivised Savings Association (TISA) suggested that the IF ISA market recently reached £1bn in subscriptions. During ‘ISA season’, RateSetter accounted for over 50 per cent of IF ISAs opened with TISA members in the month to 5 April 2019.

Commenting, RateSetter chief investments officer Mario Lupori said: “Only 18 months ago the RateSetter ISA was an unknown quantity, but now the numbers speak for themselves. Our ISA has quickly attracted £250m and with a combination of steady, tax-free returns and well-managed risk it is becoming a real alternative to Cash ISAs. It’s clear that peer-to-peer investing is becoming a mainstream investment option.”

More than 600,000 customers have used RateSetter to invest or borrow, making it the UK’s most popular P2P platform. The firm has originated £3.3bn of loans, generating more than £135m in returns for investors since launching.

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