Just 12% of advisers would invest in IFISAs

MetLife research found that just 12% of retirement specialists would put their own cash into the ISAs which allow P2P loans to be included tax-free.

A major concern of advisers is that the launch of Innovative Finance ISAs will encourage people to use P2P for retirement saving – nearly one in three (31%) of advisers questioned are worried about IFISAs being used for retirement income.

The P2P sector doubled cumulative lending to £4.4 billion in the year to December with more than 128,300 lenders – and analysts believe the launch of IFISAs will provide a further boost.

MetLife’s own research shows that nearly one in six (16%) of over-55s said they would consider investing in P2P ISAs when they are launched, attracted by the potentially higher returns.

Simon Massey, Wealth Management Director, MetLife UK, said:

“The P2P sector is growing strongly and offering attractive returns particularly when interest rates are at an all-time low and likely to remain there which could put pressure on cash ISA savers to find alternative investments.

“However it is striking that financial advisers are not joining the rush to invest in P2P and are generally cautious about investing their own cash in P2P which does carry risks.  

“People need to be fully aware of the possible risks and costs involved in Innovative Finance ISAs and weigh up the risks particularly when they are looking for more certainty over retirement income and investments.”