Reply to: Zopa ISA (finally)

[MarillionFan]

If they become a bank does that mean we get to bail you out when it goes tits up?

I asked that. The answer was no on P2P, but they're all pushing for it.

[barrydidit]

If they become a bank does that mean we get to bail you out when it goes tits up?

[MarillionFan]

Well, happy with my Zopa ISA, nicely ticking along at just over 6% at the moment. Today was the day they were supposed to start taking ISA transfers from previous years, but alas they have told me that they are slipping that by at least 3 months. They've also applied to be a bank, which is nice.

[MarillionFan]

So they offer to invest into Zopa Core without critical safeguards...

I'll give it a miss and not just because what Zopa means in Russian...

Yeah, my arse.

[AtW]

So they offer to invest into Zopa Core without critical safeguards...

I'll give it a miss and not just because what Zopa means in Russian...

[MarillionFan]

Fill your boots

Introducing the Zopa Innovative Finance ISA and Zopa Core

Dear MF,

I wanted to write to you and update you on our ISA Manager application, and to inform you of some changes we're making at Zopa.

Introducing our Innovative Finance ISA

Pending final approval from HMRC, I’m delighted to let you know that we intend to launch our flexible IFISA – with target returns of up to 6.1% – on 15th June. At first, to manage demand, the IFISA will only be available for existing investors, like you.

Read more

Introducing Zopa Core

In addition to our IFISA, on 15th June we’re excited to also launch our newest peer-to-peer investment product: Zopa Core (3.9% target return). Core will lend in risk markets A*-C without Safeguard coverage and will, by December 2017, replace Access and Classic.

Read more

Retiring Access and Classic

We are retiring Access and Classic from 1st December 2017, which means we will no longer be originating loans with Safeguard coverage after this date. All existing Safeguarded loans will continue to receive coverage (subject to there being sufficient funds in the trust) until December 1st, 2022, by which time all Safeguarded loans will have matured.

The fund was designed to ensure that investors only paid taxes on the net income they received from Zopa borrowers. In 2015 the tax laws were updated: enabling investors to claim for relief on losses from bad debt. As a result, the primary reason for Safeguard was removed, and we have taken the decision to retire the fund.

Read more

You can find more details of our IFISA, Core, and Safeguard’s retirement on our blog. If you have any questions, please don’t hesitate to contact our Investor Services team.

Best,

Andrew Lawson

Chief Product Officer

[d000hg]

Exactly. Risking money you need is foolishness.

[diseasex]

Historically 7% you mean? I bought some kind of bond with a guaranteed 4% return in my S&S ISA. S&S tend to do best but only on average. You might find the time you need the case, there ain't any. 3-4% at very low risk seems quite attractive to me - with some more risky investment topping it up once you have a buffer at that level.

All down to risk appetite and what you understand...

[d000hg]

4.5%?
meanwhile bond market is making 7%
Capital Group Global High Income Opps (Class Z) Income Fund Price & Information

Historically 7% you mean? I bought some kind of bond with a guaranteed 4% return in my S&S ISA. S&S tend to do best but only on average. You might find the time you need the case, there ain't any. 3-4% at very low risk seems quite attractive to me - with some more risky investment topping it up once you have a buffer at that level.

[diseasex]

4.5%?
meanwhile bond market is making 7%
Capital Group Global High Income Opps (Class Z) Income Fund Price & Information

[d000hg]

Oh I hadn't twigged that detail, I thought they sliced it the same regardless. Good to know.

I also think their default account for new deposits implementation is incredibly clunky. Why can't I deposit then allocate, or have a different BACS reference for each account?

[MarillionFan]

They do split your money when you put it in. But they split your deposit in 1/100 of what you put in.

So if you put in £2000, then 100 people get £20 which is a small amount.

When I put it in £20000, then 100 people got £200 each. I'd rather it was 1000 people with £20 each just to spread the risk.

Anyway, the trick is, is to deposit in small chunks 1/2 k at a time

[d000hg]

Transferring existing loans was probably impossible, though I don't know the mechanics. It was one of the reasons I put in a paltry £2k last autumn - to get a feel for the platform at a level I could afford to lose, in advance of hoping to utilise their ISA once it became available.

Splitting the money is their main way to minimise risk... what would you want to do differently and why? My main issue with their system is the 3 products cover a huge number of options. I'd rather like to be able to fine-tune this.

[MarillionFan]

Most of our cash ISAs have been moved into S&S as interest rates collapsed, if they allow transferring of existing ISAs that would be extremely handy.
That said with the ever increasing ISA allowance, and two people's to use up, taking money out of a small cash ISA to put in something like this probably won't be an issue.

When I spoke to them they said that they would be taking transfers.

If you have existing loans, those cannot be transferred into ISAs, you'd have to sell them and then move your yearly limit over.

Would be interesting to see how they will split it though. Normally deposits are split 100 times, so when I put 20k in once I landed up lending people £200 each which is not what I wanted to do.

[d000hg]

Most of our cash ISAs have been moved into S&S as interest rates collapsed, if they allow transferring of existing ISAs that would be extremely handy.
That said with the ever increasing ISA allowance, and two people's to use up, taking money out of a small cash ISA to put in something like this probably won't be an issue.