" class="no-js "lang="en-US"> Stuart Law, CEO at Assetz Capital - Fintech Finance
Thursday, March 28, 2024

Stuart Law, CEO at Assetz Capital

While there has been a 2% fall in the number of ISAs, this drop has been driven solely by those ditching Cash ISAs – confirming our longstanding belief that this is a dying investment type. Crucially there is growth in other areas, with Innovative Finance ISAs starting to make their mark on the ISA landscape. While the amount invested and the number of accounts are still low in comparison to older forms of ISA, the growth rate is promising. The government deserves credit for introducing this ‘third-way’ and seeing the gap in the market it could occupy, all while contributing to the democratisation of finance.

We’ve seen first-hand how attractive IFISAs can be, with people keen to benefit from the target rates of interest, coupled with the potential for less volatile returns than the stock market. Our average IFISA balance as of the end of the 2017/18 tax year was £11,500, more than the industry average of any ISA class.

There is still a long way for the IFISA to go, and its continued success will depend on a number of factors. While the government is keen to see strong IFISA take-up, this clashes with the FCA’s suggestion to restrict retail access to peer-to-peer lending – demonstrated in its recent proposals regarding greater regulation.

Restriction of retail cash coming into the peer-to-peer market could have a knock-on effect on the wider economy. As a business peer-to-peer lender who funds housebuilding as part of our support for businesses, we can foresee a significant negative impact on the country’s housing ambitions if retail funding is suppressed.”

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