It’s time to enjoy life in the middle

Zopa Innovative Finance

Zopa Innovative Finance ISA - a modern approach to saving

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We are the sandwich generation.  We are in the middle.  The middle of life, the middle of our families and the middle of our careers, heading towards retirement.

When it comes to investing, we’ve seen it all.  The highs - great interest rates, and the lows - financial crashes.  We’ve spent most of our lives preparing and saving for the future.  The rainy day, the running away fund, daughter’s wedding, bigger house, new car, romantic holiday, that racing bike we’ve always wanted.  We’ve been careful, keen not to take too many risks but recently we’ve realised it’s not enough.

What we are looking for now is a new way to invest.  Not one that is without risk, we’ve lived long enough to know that investments that offer a higher reward come with some risk.  We want an investment that offers a higher return than a cash ISA and a lower risk of a potentially volatile stocks and shares ISA.  We want to be somewhere in the middle.  Good things happen in the middle. 

And that’s exactly where Zopa want you to be.  Zopa has tailored their Innovative Finance ISA (IFISA) to meet you in the middle. 

An Individual Savings Account (ISA) allows a person to earn tax free interest on cash, stocks and shares or other investments.  Each year, you can save up to the tax-free allowance limit, and you can also build up your ISA balance over the years.  Zopa introduced their Innovative Finance ISA in 2017.  It is an ISA where your money is invested in Zopa peer-to-peer loans, and potentially offers higher rates of return.

Zopa the FeelGood Money™ Company

Founded in 2005, Zopa, the FeelGood Money™ company, has been built on offering peer-to-peer (P2P) lending.  They offer simple better value loans, directly matching people looking for a low rate loan with investors looking for a higher rate of return – makes sense, right?  Their service is offered online which cuts down overheads, so they can pass on rewards and everyone benefits.  Over the past 14 years Zopa has helped thousands of customers take the stress out of handling money.  Their service has been built on honesty, transparency, and trust.  In December 2018, Zopa were the first peer-to-peer lender to be granted a UK banking licence. 

If like me, you have been a little lax over the years and have failed to switch ISAs due to disappointing interest rates, you’ll want to know how Zopa are shaking up the market and offering alternative services to High Street financial providers.

Zopa ISA Core and ISA Plus

Zopa has two separate Innovative Finance ISA accounts, the ISA Core and Isa Plus, both offering potentially great interest rates with different levels of risk.

The Zopa IFISA means that potentially you could be earning their current target return of 4.5% for money invested in the ISA-Core, where you invest in loans across core risk markets.  And the target return of 5.2% if investing in the ISA Plus, where you invest in higher risk markets for a higher return. 

The UK tax year ends 5th April 2019

You have one ISA allowance each year and can invest up to £20,000 and depending on your individual circumstances, you could enjoy tax free interest.  The allowance can be split between different ISAs, and did you know you can transfer your existing ISA to Zopa.  By the way, ISA transfers do not affect your annual allowance, so you could start earning their current target rate straight away.  If you haven’t invested in an ISA during the current tax year, there may still be time to open one, funding to benefit from this year’s allowance.  Fees may apply.

The Zopa IFISA offers that feel good factor, taking you back to a time when it was worth investing for the future.  To me, it looks like a good way to balance risk with reward.  It’s now time to enjoy life in the middle, to invest in the middle, because good things happen in the middle. 

Remember your capital is at risk and is not protected by the Financial Services Compensation Scheme (FSCS).  Tax treatment depends on your individual circumstances and may be subject to change in the future. 

Visit Zopa for full details of IFISA, ISA Core and ISA Plus