Savers will be able to earn tax-free returns on peer-to-peer lending websites, it was announced in today’s Budget.
Peer-to-peer lending – which link savers and borrowers directly – will be allowed inside an Individual Savings Account (ISA) for the first time. It is unclear when the reforms will be introduced.
The inclusion of peer-to-peer loans within Isas is a major victory for The Telegraph which at the start of the year launched a major campaign to fix Britain’s Isa system. One of the five key areas we asked to be reformed was to allow savers to invest in peer-to-peer lending within an Isa.
Christine Farnish, who heads up the Peer-to-Peer Finance Association, said: “This is a great day for consumers who want a better deal from the financial services market. It shows that peer-to-peer lending is moving into the mainstream and is here to stay.”
Peer-to-peer websites cut out the banks and link savers and borrowers directly. This is how the loan can be “matched” at better rates for both parties.